How the IRA's Price Controls Could Backfire on Patients

For millions of Americans, health insurance offers a false promise. Despite paying premiums, deductibles, and copays, many still find themselves struggling to afford essential healthcare. In fact, a recent survey found that a staggering 43% of adults with employer-sponsored insurance—often considered the gold standard of coverage—find healthcare difficult to afford. This affordability crisis is poised to worsen, as the latest National Health Expenditure projections from the Centers for Medicare & Medicaid Services (CMS) reveal a troubling trend: while government spending on prescription drugs is projected to decrease, patient out-of-pocket costs are expected to rise. The projections forecast an 8.9% increase in hospital expenditures, coupled with a 1.4% decrease in retail prescription drug spending. This shift, driven in part by the Inflation Reduction Act's (IRA) price control provisions, threatens to undermine the law's intended goal of affordable healthcare and exacerbate existing health inequities. While the IRA aims to lower drug costs, its focus on price controls, rather than comprehensive patient protection mechanisms, is creating misaligned incentives that could backfire on the very people it aims to help.

The IRA's Price Controls: A Double-Edged Sword

The IRA's approach to lowering drug costs centers on empowering the government to directly negotiate prices with pharmaceutical companies. This change tackles a provision in the Medicare Part D program known as the "non-interference" clause, which previously prevented the government from directly negotiating drug prices. As a Kaiser Family Foundation (KFF) issue brief explains, "The Part D non-interference clause has been a longstanding target for some policymakers because it has limited the ability of the federal government to leverage lower prices, particularly for high-priced drugs without competitors." While this "non-interference" clause has long been a target for reform, the IRA's implementation creates a ripple effect that extends beyond simply lowering the sticker price of medications. The Congressional Budget Office (CBO) estimates that these drug pricing provisions will reduce the federal deficit by $237 billion over 10 years, suggesting a significant shift in spending away from the government. However, this shift comes at a cost. The IRA's emphasis on price controls, rather than comprehensive patient protection mechanisms, disrupts existing rebate structures that have been crucial in expanding access to medications, particularly for low-income patients and those with chronic conditions.

Programs like 340B and Medicaid rely on a system of manufacturer rebates to make medications more affordable. In essence, drug companies provide rebates to these programs in exchange for having their drugs included on formularies and made available to a large pool of patients. These rebates help offset the cost of medications, allowing safety-net providers to stretch their limited resources and serve more patients. However, the IRA's price controls could disrupt this delicate balance. By directly negotiating lower prices with manufacturers, the government might inadvertently reduce the incentive for companies to offer substantial rebates to programs like 340B and Medicaid. This could lead to higher costs for these programs and ultimately limit access to medications for vulnerable populations.

This means that programs like 340B and Medicaid, which rely on manufacturer rebates to offset costs and provide affordable medications to vulnerable populations, could be significantly undermined by the IRA's price control measures.

Further complicating the issue is the potential for pharmaceutical companies to adapt to the IRA's price controls by strategically setting higher launch prices for new drugs. This tactic allows them to recoup potential losses from negotiated prices in the future, effectively shifting the cost burden onto other payers, including patients. The CBO projects that this trend of higher launch prices would disproportionately impact Medicaid spending, placing a greater strain on a program already facing significant enrollment fluctuations and budgetary pressures. The KFF brief warns that, "Drug manufacturers may respond to the inflation rebates by increasing launch prices for drugs that come to market in the future." This means that while the IRA might appear to lower drug costs in the short term, it could inadvertently fuel a long-term trend of rising prices for new medications, ultimately impacting patient affordability and access to innovative therapies.

Hospitals: Benefiting from the System While Patients Pay the Price

The CMS projections forecast an alarming 8.9% increase in hospital expenditures, raising questions about the drivers of this unsustainable growth. A closer look reveals a troubling connection between this trend and the 340B Drug Pricing Program, a federal initiative designed to help safety-net hospitals provide affordable medications to low-income patients. The CBO's analysis of 340B spending reveals an explosive 19% average annual growth from 2010 to 2021, significantly outpacing overall healthcare spending growth. This dramatic increase is largely attributed to hospitals, particularly those specializing in oncology, which are increasingly purchasing high-priced specialty drugs through the program. As the CBO presentation states, "340B facilities benefit from the program because the difference between the acquisition cost and the amount they are paid (often called the 'spread') is larger for drugs acquired through the 340B program." This suggests that hospitals are capitalizing on the 340B program's discounts to acquire expensive medications, potentially driving up their overall spending. But are these savings being passed on to patients? Evidence suggests otherwise.

This suspicion of hospitals leveraging the 340B program for profit is further reinforced by a UC Berkeley School of Public Health study which found that hospitals are charging insurers exorbitant markups for infused specialty drugs, many of which are likely acquired through 340B. The study reveals that hospitals eligible for 340B discounts charge insurers a staggering 300% more for these drugs than their acquisition costs, effectively pocketing a substantial profit margin. This practice raises serious concerns about whether the 340B program, designed to help vulnerable patients access affordable medications, is instead being exploited by hospitals to boost their bottom line. As Christopher Whaley, a co-author of the UC Berkeley study, aptly points out, "It is ironic that some hospitals earn more from administering drugs than do drug firms for developing and manufacturing those drugs. At least drug firms invest part of their revenues in innovation; hospitals invest nothing." This highlights a perverse incentive structure where hospitals benefit financially from a program intended to help patients, while those same patients are often left facing inflated prices for essential medications and crippling medical debt.

The Affordability Crisis: A Broken Promise for Patients

This concerning trend of rising healthcare costs and shifting burdens is not limited to those reliant on safety-net programs. The Commonwealth Fund's 2023 Health Care Affordability Survey paints a bleak picture of the widespread affordability crisis facing Americans across all insurance types. The survey found that 43% of adults with employer coverage find healthcare difficult to afford, shattering the illusion that employer-sponsored insurance guarantees financial protection. These findings challenge the fundamental assumption that health insurance in the United States equates to affordable access to care. As the survey report states, "While having health insurance is always better than not having it, the survey findings challenge the implicit assumption that health insurance in the United States buys affordable access to care." This sentiment is echoed by millions of Americans who, despite having insurance, are forced to make difficult choices between their health and their financial well-being.

Even the IRA's lauded out-of-pocket (OOP) cap on Part D drug costs, while offering some relief, fails to address the root causes of this affordability crisis. An analysis by Avalere reveals that even with the cap in place, a significant number of Medicare beneficiaries will continue to face high healthcare costs, particularly those with lower incomes or specific health conditions. The analysis projects that 182,000 beneficiaries will spend over 10% of their income on Part D drug costs in 2025, despite the OOP cap. This sobering statistic underscores the limitations of focusing solely on OOP costs without addressing the underlying drivers of high drug prices and healthcare spending. As the Avalere analysis cautions, "High OOP costs are expected to result in many enrollees still facing affordability challenges in 2025." The findings from both the Avalere analysis and the Commonwealth Fund survey highlight a critical gap in the IRA's approach: it fails to adequately protect the most vulnerable patients from the financial burden of healthcare.

A Call for Patient-Centered Solutions

The CMS projections, alongside independent analyses of the pharmaceutical market and patient affordability, paint a clear picture: the current trajectory of US healthcare spending is unsustainable and inequitable. The IRA's price control provisions, while well-intentioned, risk exacerbating the affordability crisis by disrupting existing rebate structures, incentivizing higher launch prices for new drugs, and shifting costs onto patients. This shift is further compounded by unchecked hospital spending, particularly on high-priced specialty medications acquired through the 340B program. The result is a system where hospitals and pharmaceutical companies benefit, while patients—especially those with lower incomes or chronic conditions—are left struggling to afford essential care.

To be sure, the IRA includes provisions aimed at directly helping patients, such as the out-of-pocket cap on Part D drug costs and the expansion of subsidies for marketplace plans. These are positive steps towards easing the financial burden of healthcare for many Americans. However, the law's broader focus on price controls, without sufficient attention to patient protection mechanisms and the potential for unintended consequences, threatens to undermine these gains and create new challenges for those who rely on safety-net programs like 340B and Medicaid.

It's time for a fundamental shift in our approach to healthcare reform. Policymakers must move beyond a narrow focus on price controls and embrace a patient-centered approach that prioritizes affordability, access, and equity. This requires a multi-pronged strategy that includes:

• Reassessing the IRA's reliance on price controls: Instead of simply dictating prices, policymakers should explore alternative approaches that strengthen patient protections, preserve rebate structures that support broader access, and address the potential for cost-shifting onto patients.

• Tackling hospital pricing practices: Increased transparency and accountability in hospital pricing, particularly for inpatient medications, is necessary to ensure that safety-net programs like 340B are truly benefiting patients and not being exploited for profit.

• Investing in alternative care models: Promoting value-based care and investing in primary and preventive care can reduce reliance on expensive hospital stays, improve health outcomes, and make healthcare more affordable for everyone.

The promise of affordable, accessible healthcare for all Americans remains unfulfilled. We must demand a healthcare system that puts patients first, not profits. Only then can we ensure that everyone has the opportunity to live a healthy and fulfilling life, regardless of their income or health status.

Equitable and Data-Driven Viral Hepatitis Quality Measures

Viral hepatitis remains a significant public health threat in the United States, affecting approximately 3.3 million people with chronic hepatitis B and C infections. In 2021, there were 12,715 reported cases of chronic hepatitis B (HBV) and 117,105 reported cases of chronic hepatitis C (HCV). Despite the availability of effective treatments, these infections disproportionately impact marginalized communities, including people who inject drugs, those experiencing homelessness, and Black and Indigenous populations. This reality underscores the urgent need for a comprehensive and equitable approach to viral hepatitis care.

Recognizing this challenge, the U.S. Department of Health and Human Services’ (HHS) Office of Infectious Disease and HIV/AIDS Policy (OIDP) has issued a call for public comment on proposed viral hepatitis quality measures for Medicaid. This initiative, aimed at supporting the nation's goal of eliminating viral hepatitis by 2030, focuses on a crucial measure: hepatitis C screening and treatment initiation.

OIDP's call for public comment presents a critical opportunity to advance health equity, strengthen data-driven decision-making, and foster collaboration to accelerate progress towards eliminating viral hepatitis as a public health threat. Engaging in this process is essential for ensuring that the final measures effectively address disparities, improve care, and ultimately save lives.

The Landscape of Disparities and the Need for Action

The urgency for action is amplified by the significant disparities that exist in HCV care. Research consistently demonstrates that Black, Indigenous, and people of color, as well as those with lower socioeconomic status, face significant barriers to timely diagnosis and treatment. A study of Medicare beneficiaries found that while disparities in Direct-Acting Antiviral (DAA) use between Black and White patients narrowed by 2016, socioeconomic disparities persisted, with those receiving a Part D low-income subsidy less likely to access these life-saving medications. As the researchers noted, "DAA use among Medicare patients remained far below the level needed to eradicate HCV. The black-white gap in HCV treatment was closed by 2016, but disparities by patient socioeconomic status remained."

These disparities are deeply intertwined with social determinants of health. Factors such as poverty, limited access to healthcare, inadequate transportation, and low health literacy create significant obstacles to receiving quality HCV-related care. As one study aptly pointed out, "A variety of elements contribute to lower quality of care in rural areas, including shortages of medical equipment and services, poor health literacy, lack of transportation, and travel time and long distances."

Quality measures offer a vital tool for dismantling these barriers and fostering health equity. By tracking screening rates, treatment initiation, and outcomes across different populations, quality measures can illuminate where disparities exist and guide targeted interventions. They provide a data-driven framework for holding healthcare systems accountable for providing equitable care and for measuring progress towards eliminating viral hepatitis.

Analyzing the Proposed Measures

At the heart of OIDP’s proposal lies the HCV screening and treatment initiation measure. This measure, designed to track the percentage of Medicaid beneficiaries who receive both timely screening and treatment for HCV, is structured with a clear numerator and denominator. The numerator encompasses those Medicaid members who are screened for HCV and, if diagnosed, initiate treatment within a specified timeframe. The denominator includes all adult Medicaid enrollees within a defined age range, excluding those with evidence of Medicare or third-party insurance coverage.

This measure, viewed through an equity lens, holds immense potential for dismantling the barriers that prevent marginalized communities from accessing life-saving HCV care. By promoting universal screening, the measure encourages a proactive approach to diagnosis, reaching people who might otherwise remain unaware of their infection until they experience serious complications. Furthermore, the focus on timely treatment initiation is crucial for addressing disparities in treatment access. By tracking this metric, healthcare systems can be held accountable for ensuring that all patients diagnosed with HCV receive prompt and effective treatment, regardless of their background or socioeconomic status.

The transcript from HHS’s Viral Hepatitis Quality Measures Technical Consultation Meeting provides compelling insights into how similar measures have been leveraged at the state level to advance health equity. Dr. Su Wang, a clinician and advocate deeply involved in hepatitis care, shared her perspective, stating, "We really believe, those of us who have been doing this clinical work and also advocacy work, that quality metrics can really help us achieve hepatitis elimination by 2030." This sentiment is echoed by the experiences of states like Michigan, which has implemented a suite of HCV quality measures, including those focused on screening during pregnancy and medication adherence. These measures have not only helped Michigan track progress towards elimination but have also provided valuable data for identifying and addressing disparities in care.

Data Considerations

The success of this measure hinges on the feasibility of data collection and the robustness of the data sources used. While claims data, readily available through Medicaid programs, offer a practical starting point for tracking screening and treatment initiation, this source has limitations. Claims data primarily capture billing codes, which may not fully reflect the nuances of clinical encounters or capture social determinants of health that influence care access.

Electronic Health Record (EHR) data, on the other hand, hold a wealth of clinical information that can provide a more comprehensive picture of patient care. As noted during the technical consultation meeting, "There's a lot more information, digitally available through EHRs, health information exchanges, etc. that are readily available and allows us to get closer to real-time measurement and response." Leveraging EHR data could enhance the measure's accuracy and timeliness, enabling more rapid identification of disparities and interventions. However, widespread use of EHR data for quality measurement faces challenges, including variations in EHR systems, interoperability issues, and privacy concerns.

Additionally, capturing the influence of social determinants of health requires going beyond traditional clinical data sources. Integrating data from community organizations, social service agencies, and patient surveys could provide valuable insights into the social and economic factors that shape health outcomes. This multifaceted data approach, while complex, is essential for developing a truly equitable and effective hepatitis C quality measure.

Collaborative Action

The successful implementation of the HCV quality measure demands a collaborative approach that transcends traditional silos and brings together a diverse array of stakeholders. Public health agencies, Medicaid programs, healthcare providers, community organizations, and, most importantly, patients themselves must be actively engaged in the process.

The transcript from the technical consultation meeting showcases inspiring examples of collaborative action from states at the forefront of viral hepatitis elimination efforts. In Pennsylvania, the Department of Human Services (DHS) and the Department of Health (DOH) forged a strong partnership to drive their elimination plan, recognizing the critical role of Medicaid in reaching those most impacted by HCV. As Lauren Orkis, HBV supervisor at the Pennsylvania DOH, emphasized, "Our Medicaid partners are absolutely critical in our elimination planning efforts, statewide. So we made the partnerships strong between DHS and DOH in Pennsylvania from the get-go as we got our elimination plan underway."

Similarly, Washington State's Bree Collaborative, a legislatively mandated group focused on quality improvement for Medicaid, exemplifies the power of multi-stakeholder engagement. This collaborative, which includes representatives from various sectors, has been instrumental in developing and recommending quality measures for a range of health issues, including HCV. By bringing diverse perspectives to the table, these collaborative models foster innovation, ensure buy-in from key stakeholders, and pave the way for effective implementation.

Conclusion

OIDP's call for public comment on proposed viral hepatitis quality measures presents a defining moment in the fight against this silent epidemic. By engaging in this process, we have the power to shape measures that not only track progress but also drive meaningful change, reduce disparities, and improve the lives of millions. Let us seize this opportunity to advocate for equity, data-driven decision-making, and collaborative action.

Submit your comments, raise your voice, and join the movement to eliminate viral hepatitis. Together, we can ensure that quality measures become powerful tools for achieving health equity and creating a future where viral hepatitis is no longer a threat to our communities. The path to elimination is within reach, and quality measures, shaped by our collective voice, can light the way.

Beyond Medicine: Medicaid's Role in Bridging Healthcare and Housing

The evolving landscape of healthcare now acknowledges housing as a crucial element of well-being, marking a significant shift in public health recognizing certain goals advocates have trumpeted for decades - housing can be healthcare. Highlighted by a California Healthline article, this shift challenges old paradigms by recognizing stable, affordable housing as essential for optimal health outcomes. With states like California, Oregon, and New York at the forefront and thanks to a slew of waiver opportunitjes offered from the Biden Administration, some Medicaid programs are increasingly integrating housing services, reflecting a broader understanding that health is inextricably linked to our living conditions.

The Case for Housing as Healthcare: A Closer Look at the Evidence

The role of housing as a fundamental component of healthcare is being increasingly recognized among policymakers and supported by a growing body of evidence that underscores the critical impact of stable living conditions on health outcomes. The American Medical Association (AMA) has highlighted the essential nature of stable housing, pointing out that its absence significantly elevates the risk of various health issues, including severe infections that may necessitate amputation, and an increased likelihood of experiencing violent trauma.

Research featured in Health Affairs strengthens this viewpoint by establishing a clear link between housing stability and better health outcomes, emphasizing housing's non-negotiable position within a comprehensive healthcare framework. The benefits of stable housing can extend beyond physical health, with some studies showing significant mental health improvements through housing stability interventions, such as rental and foreclosure assistance.

The AMA further notes that people with access to stable housing are less prone to the stressors that lead to physical and mental health issues. Such environments reduce the risk of infectious diseases by providing a clean and secure living space conducive to health, facilitating easier access to medical care. Moreover, stable housing is linked to better chronic condition management, as it encourages an environment in which people can adhere to treatment plans and maintain regular contact with healthcare providers and is often accompanied with other medication necessities, such as food security and potable water.

Cost Savings and Healthcare Efficiency Through Housing

Integrating housing services into healthcare significantly enhances health outcomes and generates notable cost savings. By transitioning towards stable housing, reliance on high-cost healthcare services, such as emergency visits and hospital admissions, markedly decreases. A compelling study in Oregon demonstrated that providing affordable housing to nearly 10,000 individuals with unstable living situations resulted in a 12% reduction in Medicaid expenditures. Furthermore, this initiative increased outpatient primary care utilization by 20% and reduced emergency department visits by 18%, highlighting a shift towards preventive care.

This approach not only improves the health of Medicaid beneficiaries but also leads to more judicious healthcare spending. Allocating resources to housing services supports preventive care and vital services, amplifying the impact of stable housing on individual health and the overall healthcare system. Medicaid's strategic involvement in providing housing may prove a crucial tool for achieving better health outcomes and optimizing healthcare expenditure.

Medicaid Waivers and Housing Initiatives: Navigating New Pathways

The integration of housing services within Medicaid, facilitated by Section 1115 waivers and the innovative In Lieu of Services (ILOS) guidelines, represents a transformative approach to healthcare. These policy mechanisms are enabling states to address housing as a fundamental social determinant of health, acknowledging its critical impact on health outcomes.

Section 1115 Waivers: Expanding Medicaid's Reach

Section 1115 waivers grant states the flexibility to use Medicaid funds in novel ways that can include addressing housing instability, a key factor affecting health. The Kaiser Family Foundation reports on various state initiatives that leverage these waivers to directly tackle the housing needs of Medicaid enrollees. For example, some states have received approval to use Medicaid dollars for supportive housing services, such as helping people find and maintain stable housing. The programs with the best outcomes not o ly provide a method of entry but also work to ensure continuing housing stability. These waivers are instrumental in demonstrating how targeted housing support can lead to better health outcomes and reduced healthcare costs by minimizing the need for emergency care and hospital readmissions.

ILOS: Streamlining Support for Housing Needs

The Centers for Medicare & Medicaid’s (CMS) recent guidance on ILOS marks a significant policy shift, allowing Medicaid programs to offer housing-related services as enhancements to traditional medical interventions. This guidance enables states to provide a range of housing supports, including housing navigation assistance and one-time financial aid for security deposits or first month's rent. Importantly, while ILOS does not cover ongoing housing costs, it addresses critical barriers to stable housing for Medicaid enrollees, emphasizing the role of housing stability in achieving health equity.

State-Led Innovations in Housing and Health

States are at the forefront of integrating housing solutions within Medicaid, driven by the opportunities presented by Section 1115 waivers and ILOS guidelines. Shelterforce highlights innovative state programs that are setting precedents for how Medicaid can be utilized to support housing needs. For instance, initiatives that fund temporary housing for individuals transitioning out of hospital care not only provide immediate shelter but also contribute to better health outcomes and lower the likelihood of readmission. These programs exemplify the potential of Medicaid to address the holistic needs of its enrollees, underscoring the necessity of stable housing for overall health and well-being.

Through the strategic use of Section 1115 waivers and ILOS, Medicaid is evolving to meet the complex health and social needs of its enrollees. By recognizing housing as a critical component of healthcare, these policy innovations are paving the way for more integrated and effective approaches to improving health outcomes and advancing health equity. The success of state-led initiatives in leveraging these tools to address housing instability highlights the significant role of Medicaid in not only providing medical care but also in addressing the broader determinants of health.

Applying a Harm Reduction Perspective to Housing

Harm reduction in housing services adopts a compassionate approach, recognizing the varied challenges and needs of those facing housing instability. It emphasizes meeting people "where they are," providing flexible support without coercion, and respecting each person's autonomy and circumstances. This strategy is crucial for addressing the spectrum of housing stability, which ranges from homelessness to permanent, secure living situations. Each stage has unique health implications, with instability often worsening health conditions and hindering access to consistent healthcare.

Harm reduction aims to alleviate these health impacts by offering immediate, sometimes temporary, support to navigate towards more stable housing. This approach is vital for those with chronic health issues, mental health concerns, or substance use disorders, where a stable home can significantly influence health outcomes and quality of life. By tailoring services to meet personal needs—including healthcare access, mental health support, and substance use treatment—harm reduction in housing can effectively reduce the harms of instability and facilitate a path to stable living conditions.

Navigating Oversight in Medicaid's Housing Initiatives

The expansion of Medicaid to include housing services, aimed at addressing social determinants of health, introduces significant management and oversight challenges. A key concern is the potential for program exploitation, where resources meant for the most vulnerable are diverted or misused. The AIDS Healthcare Foundation (AHF) case, reported by the Los Angeles Times, exemplifies such risks, highlighting the need for stringent oversight to prevent organizations from prioritizing performance over patient care, qualityof life, and more permanent outcomes for program participants.

Ensuring Transparency and Accountability:

To counteract exploitation risks and guarantee the effective delivery of housing services, a strong emphasis on transparency, accountability, and comprehensive oversight is essential. The Center on Budget and Policy Priorities (CBPP) provides strategies for overseeing housing initiatives, stressing the importance of clear objectives, performance metrics, and consistent audits. These measures are vital for tracking service implementation, assessing health outcome impacts, and promoting ethical, efficient fund use.

Developing Robust Oversight Frameworks:

Implementing effective oversight requires layered scrutiny, including internal audits, external reviews, regular site audits, and autonomous, third-party feedback mechanisms for beneficiaries. Building partnerships across Medicaid programs, housing providers, healthcare entities, and community organizations can enrich oversight through varied insights and expertise. Such collaborative oversight efforts are pivotal in identifying and disseminating best practices, learning from experiences, and crafting innovative solutions to the intricate challenges of merging housing with healthcare services.

As Medicaid ventures into housing services, its success in enhancing health outcomes for vulnerable groups hinges on overcoming oversight hurdles. Committing to transparency, accountability, and strong oversight will protect against misuse, optimize resource allocation, and ensure housing's role as an integral part of comprehensive healthcare.

The Path Forward: Enhancing Medicaid's Role in Housing and Health Integration

As Medicaid evolves to more fully recognize housing as a crucial component of healthcare, a strategic and multifaceted approach is essential to ensure the effective integration of housing services. This approach should leverage the insights from recent policy developments and successful state initiatives, focusing on policy adjustments, increased funding, cross-sector collaboration, and robust oversight mechanisms.

Policy Adjustments and Increased Funding: A Foundation for Success

1. Policy Adjustments: Recent guidance on In Lieu of Services (ILOS) and the innovative use of Section 1115 waivers illustrate the potential for Medicaid to directly address housing instability. States should be encouraged to explore these and other policy tools to expand Medicaid's capacity to fund housing-related services, thereby acknowledging the profound impact of stable housing on health outcomes. Legislative and regulatory frameworks must evolve to support these changes, ensuring Medicaid can effectively contribute to housing stability for its enrollees.

2. Increased Funding: The expansion of housing initiatives within Medicaid necessitates substantial investment. This includes not only funding for direct housing assistance but also for the development of infrastructure that facilitates the delivery and coordination of services. Advocacy efforts are crucial to secure increased federal and state funding, aiming to bolster Medicaid's ability to meet the housing and health needs of its beneficiaries comprehensively.

Cross-Sector Collaboration: Building Bridges for Better Health

The success of housing initiatives within Medicaid is significantly enhanced by cross-sector collaboration. Partnerships among Medicaid agencies, housing authorities, healthcare providers, and community organizations are vital. These collaborations can draw on the strengths and resources of each sector to address the multifaceted challenges at the nexus of health and housing, creating integrated solutions that improve outcomes for individuals and communities alike.

Implementing Comprehensive Oversight and Adaptive Management

1. Comprehensive Oversight: To safeguard the integrity of housing initiatives and ensure resources are used effectively, a framework for comprehensive oversight is imperative. This framework should include clear implementation guidelines, success metrics, and regular evaluations to monitor impact and guide continuous improvement.

2. Adaptive Management: Effective management strategies are critical to navigate the complexities of integrating housing services within Medicaid. This includes ongoing training for program administrators and service providers, as well as the development of care models that seamlessly coordinate healthcare and housing services, ensuring that Medicaid enrollees receive the support they need to achieve and maintain stable housing.

The path forward for Medicaid's integration of housing services presents a unique opportunity to significantly improve health outcomes and advance health equity. By adopting a strategic approach that includes policy innovation, increased funding, cross-sector collaboration, and rigorous oversight, Medicaid can play a pivotal role in addressing the housing needs of its enrollees. This comprehensive strategy not only meets immediate housing challenges but also lays the groundwork for a healthier, more equitable future.

A Call to Action for Housing as Healthcare

The journey towards integrating housing into healthcare through Medicaid is not just a policy shift; it's a moral imperative. As we've seen, stable housing is not merely a foundation for individual well-being; it's a cornerstone of public health. The evidence is clear: when people have access to safe, stable housing, their health improves, healthcare costs go down, and communities thrive.

CMS Sides with the Devil: Insurers’ Co-Pay Accumulators Remain…for Now

The Affordable Care Act (ACA) was revolutionary in how prescriptive statutory language was in ensuring health insurers (payers) covered costs associated with pre-existing conditions, if they accepted even a penny of federal funding. The trade off was a simple theory: “cover more people and their entire health and we’ll make sure you’re still profitable”. There were hundreds of pages of caveats, definitions, incentives for public programs, pharmaceutical research, and regulatory authority passed to state and federal agencies. Everyone got a piece of the pie to the end benefit of Americans for whom health care had been out of reach for the majority of their lives. We would be healthier together by simply providing people the care we need and reducing overall costs. However, as these things go, payers are creative and pay their lawyers handsomely to find ways around that basic agreement. As payers fight to “contain costs”, co-pay accumulator programs are one of the most disingenuous methods to limit consumer access to quality care and pad payers profit margins.

From issues of discriminatory plan design, or making consumers pay the highest cost-sharing for medications which are only used to treat certain conditions like HIV, to limiting provider networks in such a way that a patient requiring a surgery or emergency care results in surprise bills to toxic practices known as “utilization management” (including, but not limited to, abusive prior authorizations and step therapy, also known as “fail first”), payers have paid their lawyers quite well to find loopholes or design new problems in order to maintain their profits. The ACA’s medical loss ratio (MLR) rule, also known as 80-20/85-15 rule (in general requiring 80% or 85% of a plans premiums to actually be used on costs of care or pay back to balance to consumers) has resulted in a startling 2 billion dollars to be paid back to consumers in 2019 alone. But the rule doesn’t necessarily count other income payers can produce by way of cost-sharing or deductible payments, co-pays (a fixed price typically paid after deductibles are met for care and medications), and – now, more commonly – “co-insurance” (a percentage price typically paid after deductibles are met for care and medications) as part of that rule. The result is consumers and those who would like to see us get the quality, individualized care we need are being put on the hook for payers’ greed.

Patient advocacy often has interesting bedfellows. And at the intersection of our care interests and that of industry, pharmaceutical manufacturers have found what can arguably described as a somewhat socialist model by way of patient assistance programs, often enacted as co-pay card or discount programs aimed at directly benefiting patients by taking care of the patients’ share of a medication’s cost. These programs are quite frequently limited by income or if a person is insured. The idea being to make sure the most costly medications make their way into the hands of the people who need them most and can least afford them. In this, our interests as patients absolutely converge with that of manufacturers. We want quality therapies made available to us. However, when a medication “goes generic”, often these programs are no longer available as a less costly, generic medication is preferred by the payer unless a patient fails that particular medication (see: step therapy, “fail-first”). The problem is generic medications are not held to extraordinarily strict requirements for Food and Drug Administration (FDA) approval that brand name medications are held to. Indeed, earlier this year, Vice offered a fantastic explanation of the problem with preferencing generic medications by payers (both public and private) is harmful to patients and why our generics “approval” process is a threat to the health and safety of patients. It’s no wonder, with the lax oversight of generic medications and the offer of payment assistance from manufacturers that patients would want access brand name and newer medications on the market.

One of the most amazing benefits of patient assistance programs is, in theory, because they’re meant to cover the patient’s cost-sharing obligations, these out-of-pocket (OOP) costs should apply to the patient’s deductible and OOP maximums and reduce the cost burden to patients for future care throughout the plan year. Right?

Wrong.

Payers have near uniformly adopted a practice known as “accumulator adjustment programs”, or co-pay accumulators, in which a payer basically says to a patient and a manufacturer “all for me, none for thee”, taking the entirety of the benefit offered by a patient assistance program and not crediting the patient with those funds received against the patient’s deductible, co-pay or co-insurance, or out-of-pocket maximums. To boot, manufacturers have zero control over this practice and often don’t know when it’s happening until a patient complains about the experience. Payers justify this move as “cost-containment” and disincentivizing patients from seeking more costly medications – which translates to newer, more effective, safer medications (go back to the problem with generic approvals above).

So far, the Centers for Medicare and Medicaid Services (CMS), the primary authority in which payment rules are issued from the federal government to payers, have generally made extraordinary effort to ensure protect the interests of patients and those who align with our interest. In the instance of CMS’s newest rebate rule, CMS chose to side with payers for some inexplicable reason. The rule states pharmaceutical manufacturers, not payers, would have to count these direct-to-consumer assistance programs among “best price” calculations, which govern Medicaid rebate price setting or what the government pays for a medication, if a patient didn’t receive 100% of the benefit of the assistance program. Previous rules on what to consider in calculating “best price” were generally limited to prices negotiated within industry movers inside the supply chain, not that of end users. The theory goes like this: “if ultimately this assistance program is paying an insurer’s bottom line and not helping patients, then it should be considered a price you (manufacturers’) negotiated. You were planning for that in setting your prices anyways, right?” Pop quiz answer: wonky negotiations with payers is not what manufacturers were planning on in designing income limited, only-accessible-by-consumers-asking for-it assistance programs. The solution CMS offered was for manufacturers to ensure patients received the intended benefit by requiring patients to pay for a medication up front and then ask for reimbursement – a process that only makes medication access and affordability infinitely more complicated and burdensome for patients.

In the end, CMS decided that in response to an excessively abusive payer practice that disadvantages patients, the answer was to create further barriers to accessing care for patients rather than to reduce them.

Let’s make this real and “back of the envelope” this practice in terms of realized patient experiences:

Monthly Income: $2,583 (based on average US income in 2019 provided by the Census Bureau)
Monthly premium: $304 (lowest cost local silver deductible is $3,400, OOP maximum is $8550, co-insurance is 20-40%)

Absent a public payer intervention, co-pay accumulators might allow a patient assistance program to cover the estimated $600 per month co-insurance would demand for a certain medication, however, I’m not likely to meet my deductible or maximum OOP for the year at all. With local rent costing about $1000 per month, a car payment and car insurance in order to work (there’s no meaningful public transit in the vast majority of the country), food costs, utilities, etc. Even with federal subsidies provided via the health care market place, every month, I’m in the negative. Which means I can’t afford to see my doctor or get my quarterly labs, which means I can’t get my medication in the first place.

However, without the application of a co-pay accumulator, accessing just 3 month’s worth of a patient assistance program would meet my deductible and maximum OOP costs for the year. I don’t have to worry about at least $200 per month in medical costs. And one less financial strain is off my shoulders.

For the vast majority of us, our medications are not a luxury item. They’re not something we can afford to pay for up front and mail-in a rebate request and wait months for. In doing so, CMS not only suggests an increase to the paperwork burden on patients and manufacturers alike, CMS also seeks to increase barriers to accessing life saving medications to begin with.

All to the benefit (read: profit) of payers. So it’s no wonder the trade organizations, Pharmaceutical Research & Manufacturers of America (PhRMA) chose to initiate a lawsuit to halt the implementation of CMS’s backwards and punitive rule.

While patient advocates may spar readily about the role of industry among advocates, we should also recognize actions that align with our own interests on their face. Yes, PhRMA may be leading up this suit - and CMS should listen to the needs of patients, reverse course, and voluntarily pull this rule.