Strengthening Caregiving Infrastructure is Fundamental to a Healthy American Society
John’s Hopkins defines a caregiver as a person who tends to the needs or concerns of a person with short- or long-term limitations due to illness, injury, or disability. On June 24, 2025, PBS will air a documentary on the multifaceted landscape of caregiving executive produced by Bradley Cooper and narrated by Uzo Aduba. The documentary explores the history of various aspects of caregiving in the United States, with a focus on the lived experiences of care providers, particularly family caregivers who provide care in the home. The documentary is timely, given how caregiver support could be affected by the present-day potential changes to Medicaid and other healthcare funding changes. The caregiving continuum spans from birth to the end of life, yet the caregiving infrastructure in the United States is insufficient.
Caregiving in the United States is both paid and unpaid, provided by professionals and laypeople. Caregiving encompasses a wide range of services, including daycare, preschools, in-home care, nursing homes, and more. Notably, according to 2020 data from AARP, around 53 million Americans give unpaid care in the home. This level of effort is by necessity, not by choice. Paying for private care services is prohibitively expensive, and loved ones prefer those in need to be in the surroundings of their own homes, living through long-term health challenges, as opposed to institutions. Home surroundings are especially desired regarding end-of-life issues.
The current U.S. healthcare infrastructure is not sufficient to meet the needs of caregivers and those they care for. Nursing homes are where some individuals with long-term significant care needs find themselves because they don’t have any family to take care of them or their family is ill-equipped to meet their needs. While Medicaid will pay 100 percent of the costs of nursing homes, the logistics of the coverage is problematic.
Medicaid coverage of nursing home care requires specific financial and health conditional requirements. In general, the financial eligibility criteria mean that a person in need must have very little in assets. If a patient does not qualify for Medicaid financially, they essentially have to spend down all their assets until they reach the required level of poverty. Additionally, in some states, the state will go after possession of a patient’s home if there is a home in their name at the end of their life. It’s referred to as Medicaid estate recovery, where a lien is placed on the home to recover some of the funds spent on long-term institutional care.
This is damaging, as it undermines the home's ability to remain in the family as a means of generational wealth. Moreover, if relatives are living in the house, they lose their place of domicile. Medicare, on the other hand, does not pay for any long-term care, such as nursing homes. Medicare will only pay for short-term care, documented medically necessary care in skilled nursing facilities such as rehabilitation homes after someone has been inpatient in a hospital. Patients who have significant care needs but do not require a level of care demanding enough to meet Medicaid criteria or do not qualify for Medicaid financially have to be cared for at home.
Having been a multi-year primary caregiver of my mother, who dealt with multiple healthcare issues, I understand first-hand the demands of being an at-home caregiver. I was not trained to be a caregiver. I was unaware of resources available to help me care for her, nor were hospitals or outpatient clinics any significant help in navigating her increasing needs from year to year. When it got to the point where she couldn’t walk, feed herself, get out of bed to relieve herself, bathe, or groom, the responsibility fell upon me as her only child.
I had to navigate taking care of all of her physical and medical needs while trying to financially support myself and attempt to flesh out a modicum of normalcy in my life. Although I was fortunate to work from home, it was challenging to balance my demanding data analysis position with her care needs. It was painful to hear her calling out for me while I was in the middle of a meeting or presentation, whether those I was interfacing with could hear her or not. I was not concerned if someone heard her faintly from down the hall during virtual meetings. It was painful because I always let her know when I had meetings scheduled so I could take care of her needs preemptively before the events. Thus, hearing her call out for me meant that it was a serious, urgent need, knowing that she always felt like she was being a burden and tried not to disturb me unless she urgently needed to.
Her financial situation did not qualify her for Medicaid, especially given her retirement and social security benefits. She had Medicare, which was partially paid for through her employer as part of her retirement benefits. While Medicare paid for her medications, it did not cover care needs related to day-to-day living. Medicare would not pay for a nurse or trained care individual to come in daily or several times a week to give her a proper bath once she could no longer bathe herself, thoroughly make sure her private areas were cleaned adequately after bodily functions, make sure all her bodily skin folds were powdered and dressed, and so much more. For example, I knew that any time she relieved herself of solid waste while bedridden, that meant one to two hours of time it would take me to properly get her taken care of as she couldn’t help me move her body to tend to her needs.
After I talked in depth with her primary care doctor, Medicare agreed to pay for a basic home hospital bed that allowed me to raise her up to make her comfortable and raise her legs when necessary. Medicare paid for a lower extremity lymphedema pump air compression recovery boot system for her swollen legs that sometimes developed sores, which I had to dress and clean. She was overweight, in addition to being unable to mobilize herself. Thus, after petitioning a doctor who attended to her after one of many inpatient stays, Medicare paid to rent a Hoyer lift so that I was able to lift her to change the bed or help put her on stretchers at times I had to call EMS. Although Medicare paid for renting these items after many rounds of begging and discussions, they would not pay for someone to come in and help me utilize the tools.
I had to learn how to use them on my own. The only time Medicare paid for anyone to come into the home was when some of her leg wounds and bed sores exacerbated to the point of justifying once-a-week home health visits to take care of them. Most importantly, those visits were only temporary. Once they had healed to the point where she was evaluated as not requiring weekly paid care, the visits stopped. I had to learn the involved processes from the home health nurses and how to administer care on my own. They would even order extra supplies to send to our home so that Medicare would cover them, rather than my mother and I having to buy them ourselves.
The aforementioned is only a small part of the realities of being an at-home caregiver. However, it is a window into the kind of support that caregivers and patients need. There need to be payment innovations that provide funding for things like home care beyond temporary skilled nursing needs. When patients with significant needs are discharged back into their homes after inpatient stays, there needs to be robust networks of after-discharge support that include inquiring about the needs of caregivers and those they care for.
Chronic condition care often requires numerous durable medical goods and disposable medical products that Medicare and private insurance do not cover. A system that helped caregivers with some of the financial burden of those needs would prevent families from financial ruin. For example, since my mother was bedridden, she obtained a device called a Pure Wick system that was a means to relieve urination without the complications of skin breakdown from wetting adult diapers. We had to pay out of pocket for the single-use catheters used for the device, which cost $150 per month in addition to all of the other many care products used on a daily basis.
There are many reasons why people end up in a long-term home care situation. There needs to be infrastructure in place at the local level to fill the gaps and meet needs financially, emotionally, and physically. Presently, a company like Trualta has the right idea. It is an online platform that provides caregivers with access to various training, support, and a way to interact with other caregivers.
However, vast improvements in government infrastructure are needed to effectively remedy home health care needs. The current potential detrimental changes to Medicaid and Medicare present an exacerbation of the status quo instead of a solution. Only 10 states have any means of compensation for family caregivers, and just 13 have paid family and medical leave. Caregiving is not a private issue to be lived through in darkness and silence. Ensuring a robust and stable caregiving continuum from birth until the end of life is the only way to ensure an economically stable and medically healthy society.
CMS Draft Guidance Creates Regulatory Vacuum in 340B Drug Pricing
The Centers for Medicare and Medicaid Services (CMS) released its draft guidance for the Medicare Drug Price Negotiation Program in May 2025, offering operational improvements like using Wholesale Acquisition Cost (WAC) for standardized refund calculations. Yet beneath these technical refinements lies a critical policy failure: CMS's refusal to mandate federal claims modifiers for affected transactions and contradictory programs. This decision creates a regulatory vacuum that enables systematic duplicate discounts worth billions annually while sidelining patient experiences.
By abdicating responsibility for duplicate discount prevention and suggesting retrospective payment models that could strain smaller entities, CMS has created an environment where unscrupulous actors can exploit loopholes as state laws increasingly block the transparency mechanisms needed for program integrity. The contrast is stark—CMS requires mandatory "TB" modifiers for Part B inflation rebates but makes them voluntary for Maximum Fair Price (MFP) effectuation, creating an inconsistent regulatory framework that undermines program integrity.
"CMS had an easy answer right in front of them," says Jen Laws, CEO of the Community Access National Network (CANN). "Claims modifiers are an already existing tool within the scope of Medicare claims and instead agency officials opted to offer more than 220 pages worth of justifying why they won't mandate the information and not one page was dedicated to appreciating how such a fragmented approach might harm patients. The only mention we got was off handed references about maybe listening to patient advocacy organizations - which didn't go so well for us during the initial listening sessions of drug selection. Honestly, it's all entirely baffling."
The Mechanics of Duplicate Discounts and Why Modifiers Matter
Without clear claims identification, the same drug unit may receive multiple discounts—340B pricing plus Medicare rebates or Medicaid rebates—creating billions in inappropriate financial flows. Federal law (42 USC 256b(a)(5)(A)(i)) explicitly prohibits duplicate discounts between 340B and Medicaid rebates on the same drug unit, yet enforcement remains weak. While this might seem fine, no specified benefit is required to flow to patients and these factors incentivize ever increasing, uncontrolled costs within the healthcare ecosystem.
The scope of this problem is staggering. IQVIA estimates $20-25 billion in duplicate discounts annually across the industry. A Government Accountability Office (GAO) audit found that 25% of audited 340B programs had duplicate discount errors, with 264 of 429 cases caused by inaccuracies in the Medicaid Exclusion File system (MEF) itself. For context, some states seeking to prohibit claims modifier requirements cite use of the MEF—these inaccuracies and resulting duplicate discounts highlight the flaws of this approach.
The exploitation extends beyond duplicate discounts. Contract pharmacy fees extract over $1 billion annually from the 340B ecosystem, with CVS's third-party administrator (TPA) operation alone collecting over $350 million in fees over a few years according to Senate HELP Committee inquiry.
"Statutorily prohibited duplicate discounts are one of the many ways the 340B program is exploited as a profit-making tool by large hospital systems and for-profit contract pharmacies," explains Kalvin Pugh, State 340B Policy Director at CANN. "A simple claims modifier would ensure that this guidance prevented continued abuse and taken a step forward in much-needed accountability."
Despite misleading statements to the contrary, claims modifiers do not risk patient privacy. Claims modifiers function as digital markers using de-identified information to tag individual claims as 340B, similar to Medicare claims, enabling automated systems to exclude them from other rebate calculations. Without this technical infrastructure, PBMs can attempt "illicit rebate grabs" on 340B drugs, and covered entities can divert Medicaid rebates that should be reinvested in state programs directly to their own entities. These exploitations drive up the overall cost of medication and care for patients, either directly by profiteering off of patients and not passing on those discounts or by way of increased private insurance premiums as justified by increased billing across the healthcare ecosystem.
State Medicaid Programs Bear the Cost of Federal Inaction
The absence of mandatory claims modifiers enables duplicate discounts that drain state Medicaid rebate programs of billions annually, forcing difficult choices between expanding access and protecting limited state resources. While the pending Reconciliation Bill making its way through the Senate includes provisions to prohibit 340B spread pricing in Medicaid programs—as was seen in the December 2024 Continuing Resolution prior to it being gutted—efficient and effective compliance requires a claims modifier.
A Health Management Associates study found that 9 states position that manufacturers should seek recoupment from providers rather than reducing state rebate payments. The Texas experience illustrates the real-world consequences—when the Texas Legislature considered legislation that would have expanded 340B contract pharmacy use without oversight or revenue-sharing requirements, the fiscal note projected the state's HIV Medication Program would become 'insolvent by 2027' with an estimated $72 million shortfall over a multiyear period. This demonstrates how policy changes affecting 340B identification can directly threaten state programs serving vulnerable populations, while some states implemented comprehensive carve-out policies removing all 340B drugs from managed care to avoid such complications entirely.
"State programs will lose out on numerous rebates by offering the option to use the often lower 340B discount instead of the Medicaid price," Pugh explains. "This will strain state resources and put vulnerable impoverished communities at risk of losing access to lifesaving healthcare and medications."
In non-fee-for-service states, choosing the 340B rate over the Medicaid rate diverts rebate value away from Medicaid program reinvestment, effectively divesting from state programs that serve vulnerable populations. This interaction between 340B and Medicaid creates perverse incentives that undermine both programs' effectiveness.
CMS's Abdication of Responsibility Creates a Regulatory Vacuum
By declaring it "will not, at this time, assume responsibility for deduplicating discounts", CMS has created a regulatory vacuum that enables bad actors while burdening manufacturers and providers with piecemeal solutions.
The consequences of this abdication are far-reaching. At least 12 states have enacted laws restricting 340B claims modifier requirements or data sharing. CMS provides limited oversight of state Medicaid duplicate discount prevention efforts, leaving this responsibility to states, which are not always sufficiently funded or staffed to meet this responsibility. The Indiana situation exemplifies this chaos—former state officials filed a "whistleblower" lawsuit alleging "tens, likely hundreds" of millions of dollars of Medicaid fraud by hospital systems and managed care entities (PBMs by any other name), partly due to inadequate state oversight.
According to insights from interviews with former and current Medicaid directors and pharmaceutical policy experts in 14 states, the Health Resources and Services Administration (HRSA) has been faulted with inconsistent and weak enforcement of 340B duplicate discounts due to lack of data transparency. The GAO review found that only 4 of 13 covered entities had accurate descriptions of state Medicaid policies.
"While CMS might be about to assume some of HRSA's responsibilities with regard to 340B, it seems the agency is prepared to repeat HRSA's abdication of responsibility," Laws notes. "The IRA's interaction with 340B under this draft guidance systematizes the absolute headache covered entities, manufacturers, and patients already have with one program and just...duplicates it."
Retrospective Payment Models Threaten Safety-Net Provider Viability
The shift from prospective 340B discounts to retrospective payment models could create existential cash flow threats for smaller safety-net providers who lack working capital to absorb payment delays. While the draft guidance offers a rubric for manufacturers to assess entity financial sustainability and requires manufacturers to enact individualized action plans, this approach is clumsy and not foolproof, nor does the guidance suggest how smaller entities might efficiently comply with a patchwork of manufacturer assessment tools.
The financial reality for true safety-net providers is bleak. Nearly 45% of rural hospitals operate with negative margins, making 340B savings vital for maintaining operations. 93% of rural hospitals report relying on 340B savings to help keep their doors open. However, rural hospitals average only $2.2 million in annual 340B savings, compared to $11.8 million for all hospitals. Compliance costs range from $100,000 to $200,000 annually, regardless of hospital size, posing a significant burden on these facilities.
The timing requirements compound these challenges. The 14-day MFP payment window plus manufacturer 45-day lookback requirements create complex compliance deadlines that smaller entities may struggle to meet.
CMS also fails to contemplate the natural and expected outcome of confusing and potentially conflicting billing for patients. People already face challenges determining actual payments due when engaging in critical care for chronic and complex health conditions. Bills may come slow or arrive with differing amounts due based upon claims adjudication. A complex retrospective payment process as suggested by CMS will only further exacerbate this issue.
Technical Infrastructure: Why Modifiers Are the Solution
Claims modifiers represent proven, existing technical infrastructure that could solve the identification problem with minimal additional burden on providers already using similar systems. Think of claims modifiers as digital tags—simple two-digit codes that healthcare providers already add to insurance claims to provide additional information about services without changing the fundamental billing process. The "TB" modifier became the universal 340B identifier for all covered entities when billing Medicare Part B starting January 1, 2025.
The key point is that this infrastructure already exists for Medicare—extending similar requirements to the Medicare Drug Price Negotiation Program would simply apply proven technology consistently across federal programs rather than creating new systems. Furthermore, False Claims Act liability creates potential fines up to $10,000 per incorrect Medicare entry, ensuring accuracy and proper use of these digital markers.
The Path Forward Requires Federal Leadership
The public comment period for CMS's draft guidance closes on June 26, 2025, representing a critical opportunity for stakeholders to advocate for mandatory modifiers.
"We had some high hopes for a more thoughtful and, frankly, direct approach to our already fractured healthcare system with this guidance," Laws reflects. "The draft, as it is, is a mess. Mandating a claims modifier is a direct and elegant answer that would require far less wasted ink. Despite this Administration's claims to the contrary, here we are watching draft guidance unfold that will perpetuate a system prone to fraud and abuse. And patients? Our experiences in the middle of all of this? We're an afterthought. It's just completely unacceptable. The only way systems meet patient needs is by starting with us. This is not that and CANN is prepared to be loud and clear about that fact."
A mandatory federal claims modifier can provide the systematic solution needed to protect safety-net providers and ensure program integrity. Technical fixes aren't enough—comprehensive policy reform is needed. The stakes are too high, and the patients we serve deserve better than regulatory half-measures that enable exploitation while threatening the safety net they depend on for survival.
FTC Sues Major PBMs for Unfair Practices Affecting Drug Costs
Pharmacy Benefit Managers (PBMs) have long been influential yet often obscure intermediaries in pharmaceutical pricing and distribution. They negotiate drug prices with manufacturers, develop formularies for health plans, and manage pharmacy networks. Today, the three largest—CVS Caremark, Express Scripts, and OptumRx—control about 80% of the market.
On September 20, 2024, the Federal Trade Commission (FTC) filed an administrative complaint against these major PBMs and their affiliated group purchasing organizations (GPOs). The complaint alleges that they engaged in anticompetitive and unfair rebating practices, artificially inflating insulin prices and impairing access to lower-cost alternatives.
The FTC's action marks a critical juncture in the struggle for fair drug pricing and access, emphasizing the need for robust enforcement and comprehensive PBM reform. The outcome could reshape the healthcare industry and significantly impact care across the United States.
The FTC's Case Against PBMs
The FTC alleges that PBMs have engaged in anticompetitive and unfair rebating practices that have artificially inflated the list prices of insulin and other essential medications. Grounded in Section 5 of the Federal Trade Commission Act, which prohibits unfair competition and deceptive practices, the FTC asserts that PBMs' rebate strategies and patient steering harm consumers and competition.
For example, the list price of Humalog, a widely used insulin product, increased from $21 in 1999 to over $274 in 2017—a rise of more than 1,200%. The FTC argues that this dramatic inflation is linked to PBMs' "chase-the-rebate" strategy, where they demand larger rebates from manufacturers in exchange for favorable formulary placement.
Another key aspect of the complaint focuses on patient steering practices. The FTC alleges that PBMs have systematically excluded lower-cost insulin alternatives from their formularies in favor of higher-priced options that generate larger rebates. This practice limits choice and forces many to pay more out-of-pocket for their medications.
Rahul Rao, Deputy Director of the FTC's Bureau of Competition, emphasized: "Millions of Americans with diabetes need insulin to survive, yet for many of these vulnerable patients, their insulin drug costs have skyrocketed over the past decade thanks in part to powerful PBMs and their greed."
The FTC seeks to fundamentally change how PBMs operate. The complaint aims to prohibit PBMs from excluding or disadvantaging lower-cost versions of drugs, prevent them from accepting compensation based on a drug's list price, and stop them from designing benefit plans that base out-of-pocket costs on inflated list prices rather than net costs.
FTC Chair Lina Khan stated, "The FTC's administrative action seeks to put an end to the Big Three PBMs' exploitative conduct and marks an important step in fixing a broken system—a fix that could ripple beyond the insulin market and restore healthy competition to drive down drug prices for consumers."
Impact on People Living with HIV
While the FTC's case primarily focuses on insulin pricing, PBM practices significantly affect people living with HIV (PLWH) and other chronic conditions. Recent cases highlight the challenges faced in accessing affordable medications due to PBM and insurer practices.
In April 2024, CVS Health failed in its latest attempt to dismiss a class action lawsuit alleging discrimination against PLWH by requiring them to receive medications via mail order, limiting access to essential pharmacy services and counseling. U.S. District Judge Edward Chen noted that CVS was on notice that this program could likely discriminate against PLWH, as plaintiffs had repeatedly requested to opt out.
In another case, the U.S. Department of Health and Human Services Office for Civil Rights (OCR) closed a complaint without penalties against Blue Cross Blue Shield of North Carolina (BCBS NC) after the insurer lowered the pricing tier for HIV medications. The original complaint alleged that BCBS NC had placed almost all HIV antiretroviral medications, including generics, on the highest-cost prescription tiers.
While BCBS NC changed its formulary, the lack of penalties raises concerns about enforcement and accountability. Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, expressed disappointment: "It was incredibly disheartening and deeply concerning to see them let the state's largest insurer get away with such blatant discrimination."
These cases illustrate how PBM practices and insurer policies create significant barriers to care for people living with HIV. High out-of-pocket costs, restricted pharmacy access, and discriminatory formulary designs can lead to medication non-adherence, resulting in adverse health outcomes and increased healthcare costs in the long term.
In North Carolina, about 37,000 people are living with HIV, with Black people representing 58% of new HIV diagnoses despite being only 22% of the state's population. Nationally, according to the Centers for Disease Control and Prevention (CDC), approximately 1.2 million people in the United States are living with HIV. PBM practices that inflate drug costs or limit access exacerbate these disparities and hinder efforts to end the HIV epidemic.
PBM Practices Under Scrutiny
The FTC's complaint has brought controversial PBM practices into sharp focus, highlighting concerns long raised by patients, healthcare providers, and policymakers.
The FTC's interim staff report reveals that PBMs often prioritize higher rebates over lower net prices, leading to exclusion of lower-cost alternatives and driving up drug prices—a practice known as "rebate walls." Patient steering directs consumers to PBM-owned pharmacies, limiting choice and disadvantaging independent pharmacies.
A Congressional hearing in July 2024 further exposed these issues. PBM executives faced tough questioning about their role in rising prescription drug costs. Lawmakers pressed the executives on how PBMs have monopolized the pharmaceutical marketplace and pushed anticompetitive policies that undermine local pharmacies and harm patients.
Representative Virginia Foxx (R-N.C.) highlighted the lack of transparency, questioning PBM executives about the pass-through of rebates and fees to plan sponsors. The executives' responses did little to clarify the complex and opaque financial flows within the PBM industry.
PBMs defend their practices as necessary for managing drug costs. Phil Blando, Executive Director for Corporate Communications at CVS Caremark, stated, "We work to negotiate the lowest net cost for drugs... driving better health outcomes and lower out-of-pocket costs for consumers." However, critics argue that these claimed benefits are not reflected in patient experiences or overall drug pricing trends.
Real-World Impact on Patients and Pharmacies
Jeremy G. Counts, PharmD, a spokesperson for Pharmacists United for Truth and Transparency (PUTT), explains that the vertical integration of the Big Three PBMs allows them to limit access through restrictive networks, under-reimbursement, and aggressive patient steering. These practices harm independent pharmacies and jeopardize health by disrupting continuity of care.
Restrictive Networks and Steering: PBMs often require patients to use their own pharmacies, frequently through mail order, misleading them into believing they have no other options. Even when plans allow the use of independent pharmacies, PBMs make it tedious to opt out, effectively limiting choice.
Under-Reimbursement and Clawbacks: Independent pharmacies that serve patients despite low reimbursements face financial strain. PBMs may pay below cost or use fees and recoupment methods to claw back margins, forcing some pharmacies to turn away patients.
Barriers to Medication Access: PBMs impose onerous prior authorization processes for medications that do not provide them with high rebates, delaying care and increasing costs. Counts notes that this has become a deadly issue in oncology care.
Aggressive Patient Pursuit: For profitable medications, PBMs aggressively pursue patients and their prescriptions, sometimes transferring prescriptions without permission or shipping medications without their knowledge.
These practices not only harm independent pharmacies but also jeopardize health by disrupting access to necessary medications.
Healthcare consultant Rita Numerof calls the FTC's investigation a "pivotal moment" in reforming the industry to serve patients' best interests.
The Need for Enforcement
The lack of punitive action in cases like the BCBS NC complaint raises concerns about the effectiveness of current enforcement mechanisms. Carl Schmid of the HIV+Hepatitis Policy Institute pointed out, "Without action to improve federal and state regulation, oversight, and enforcement, such discriminatory practices will continue." The BCBS NC case demonstrates that while policy changes can be achieved through advocacy and complaints, there is often little consequence for discriminatory practices.
Counts emphasizes that "PBMs are masters at derailing legislative attempts to rein them in." He argues that FTC enforcement is critical, as PBMs often ignore laws unless compelled to comply. Counts asserts that attacking the problem from multiple fronts is essential, and FTC action provides immediate and targeted intervention.
PBM Response and Industry Perspective
In response to mounting scrutiny, PBM executives have defended their practices. During the July 2024 Congressional hearing, leaders from CVS Caremark, Express Scripts, and OptumRx maintained that they do not engage in patient steering or discriminatory practices. They argued that PBMs play a crucial role in negotiating lower drug prices and improving healthcare affordability.
David Joyner, president of CVS Caremark, stated, "We're making health care more affordable and accessible for the millions of people we serve every day."
However, these assertions have been met with skepticism. The House Committee on Oversight and Accountability, led by Chairman James Comer (R-Ky.), has accused PBM executives of making statements that contradict findings about self-benefitting practices.
Legislative Efforts: The Pharmacists Fight Back Act
In addition to regulatory actions by the FTC, legislative initiatives are crucial for comprehensive reform. The Pharmacists Fight Back Act (H.R. 9096), introduced by Representatives Jake Auchincloss (D-MA) and Diana Harshbarger (R-TN), aims to:
Establish Standard Pharmacy Reimbursement:
Proposes a reimbursement model based on the National Average Drug Acquisition Cost (NADAC) plus a state dispensing fee and an additional 2%. This model prevents underpayment to independent pharmacies and curbs price gouging by PBM-owned pharmacies.
Prohibit Predatory PBM Tactics:
Seeks to ban practices such as steering patients to PBM-owned pharmacies, exclusionary network designs, retroactive fees, spread pricing, and reimbursement clawbacks.
Mandate Rebate Transparency and Application:
Requires that 80% of all PBM-negotiated rebates and fees reduce patients' out-of-pocket costs, with the remaining 20% lowering insurance premiums.
Counts stresses the urgency of passing this legislation to save pharmacies and reduce drug pricing: "Its immediate passage is critical to stopping the pharmacy closure and drug pricing crisis in this country."
Potential Outcomes and Industry Impact
If successful, the FTC's action could reshape the pharmaceutical industry by forcing PBMs to prioritize lower net drug prices, benefiting patients with more affordable medications and increased pharmacy choice. A ruling against PBMs could set a legal precedent, opening the door for further regulatory action or private lawsuits against PBMs and other healthcare intermediaries.
Independent pharmacies stand to benefit considerably from potential reforms. If the FTC's action results in more transparent pricing practices and limitations on patient steering, these businesses may be better able to compete with PBM-owned pharmacies.
However, given PBMs' significant resources and influence, changes may be hard-fought and take time to implement. There is the possibility that PBMs may find new ways to maintain their market position and profitability.
Impact on Independent Pharmacies
Independent pharmacies are closing at an alarming rate—nine per day, with 2,275 closures so far in 2024. This trend reduces access to personalized care and diminishes competition, further consolidating PBMs' market power.
Counts conducted a study in Virginia, matching pharmacy closures against openings using data from the Virginia Board of Pharmacy. He found that "community pharmacies are closing at twice the rate they are opening, and this rate is accelerating." Without significant reform, including FTC enforcement and the passage of H.R. 9096, the pharmacy infrastructure in the United States will continue to erode.
Conclusion and Call to Action
The FTC's actions, along with legislative efforts like the Pharmacists Fight Back Act, are critical steps toward creating a fairer pharmaceutical industry that prioritizes access and affordability.
We urge readers to:
Stay Informed: Follow developments in PBM regulation and reform efforts.
Research Legislation: Contact your representatives to inquire about pending legislation.
Engage with Advocacy Groups: Support organizations like PUTT (www.truthrx.org) and the HIV+Hepatitis Policy Institute (www.hivhep.org).
Share Experiences: Raise awareness by sharing your experiences with PBM practices. PUTT is collecting stories to highlight the real-world impact of PBM practices. Visit their PBM Horror Stories page to share your story anonymously.
Collective action is essential to ensure meaningful and lasting change in drug pricing and access. The FTC's action is a significant step, but it's up to all of us to ensure this momentum leads to a more transparent, equitable, and patient-centered healthcare system in the United States.
Profit Over Patients: Challenging the Understaffing Crisis in Healthcare
On December 31, 2023 former U.S. Representative Eddie Bernice Johnson suffered and died in a completely preventable yet entirely foreseeable tragedy. Rep. Johnson, a dedicated nurse and a fervent advocate for equitable healthcare, succumbed to an infection contracted in a rehabilitation facility, a direct consequence of medical neglect. This incident is a glaring example of the systemic issues plaguing our healthcare institutions, where intentional understaffing and profit-driven motives often come at the expense of patient care and staff well-being. Her experience tragically highlights the broader systemic issues in healthcare, including rampant understaffing and the consequences of healthcare system consolidation.
The Tragic Circumstances of Rep. Johnson's Passing
According to a Texas Tribune report, Rep. Johnson died a “terrible, painful death” from an infection caused by negligence at her Dallas recovery facility following back surgery. The infection was a result of being left to lie in her own feces and urine for roughly an hour while she repeatedly called for help that didn’t come. The facility reportedly told family that all staff were unavailable as she called for help due to being in a training. Her son, Kirk Johnson, minced no words as he stated, "She was screaming out in pain, asking for help. If she had gotten the proper care, she would be here today.”
The family notified Baylor Scott & White Health System and Baylor Scott & White Institute for Rehabilitation of their intention to sue on the grounds of medical negligence. The lawsuit, if not settled, will highlight the deadly consequences of inadequate patient care in healthcare facilities. This legal battle is complicated by Texas law, which limits medical malpractice lawsuit awards to $250,000. Such legislative decisions, influenced by powerful hospital lobbies, not only restrict legal recourse for patients but also reflect deeper systemic issues in healthcare governance where institutional profits often overshadow patient rights.
The limitation on medical malpractice awards in Texas exemplifies a troubling trend in healthcare legislation. These laws, as detailed in a Miller & Zois report, often protect healthcare institutions at the expense of patient health and safety while significantly limiting patients' ability to seek fair compensation for medical negligence.
This legislative backdrop, coupled with intentional understaffing in healthcare facilities, creates a perilous situation where patient rights are limited and institutions are insulated from liability when their cost cutting measures cost lives. Maximizing profit and administrative and shareholder value by understaffing care facilities heightens the risk of medical errors, burns out staff, and creates unsafe working conditions. Yet, when these cost-cutting measures lead to harm, patients find their legal recourse severely restricted by malpractice caps while hospital staff burns out and are exposed to greater occupational hazards. The only ones not on the losing end are the hospitals and their executives.
Staffing Shortages or Healthcare Profiteering?
Across the country, as healthcare corporations report burgeoning profits, the reality within their healthcare facilities tells a story of compromised care and strained resources. Let’s take Hospital Corporation of America (HCA), the largest hospital system in the country, as an example. As reported in The Guardian, a study by the Service Employees International Union (SEIU) highlights the disparities, revealing that staffing ratios at HCA Hospitals in 2020 were alarmingly 30% lower than national averages. Despite $7 billion in profits and $8 billion allocated to stock buybacks and paying out nearly $5 billion in dividends to shareholders, the investment in patient care, particularly in terms of staffing, remains inadequate.
The prevailing narrative of a nursing shortage in the United States is rigorously challenged by facts and voices from within the healthcare sector. National Nurses United (NNU) asserts that the core issue is not a lack of nurses but rather the widespread unwillingness of nurses to work under unsafe conditions. This perspective contradicts the healthcare industry's narrative and points to systemic issues in workforce management and underinvestment in medical staffing by hospital executives.
The intentional understaffing by healthcare facilities, as seen in cases like HCA Hospitals, is often driven by financial motivations. By keeping staffing levels low, these facilities aim to maximize profits, often at the expense of both patient care and staff well-being. This approach has led to a situation where the healthcare workforce is being pushed to its limits, leading to high turnover rates and a growing reluctance among nurses to work in such conditions.
The narrative of worker shortages is further complicated by the trend of healthcare system consolidation, which significantly reshapes healthcare markets, often at the expense of patient care and staff well-being. In May of 2023 The RAND Corporation gave testimony to the U.S. House of Representatives Committee on Ways and Means, Subcommittee on Health which underscored that consolidation frequently leads to higher healthcare costs without corresponding improvements in quality. Characterized by mergers and acquisitions across markets, this trend typically results in reduced competition, higher prices, and a focus on revenue generation over patient-centric values. Moreover, when private equity is involved, as highlighted by The British Medical Journal (BMJ), it often exacerbates patient harm.
The Human Cost of Cost-Cutting
Impact on Healthcare Workers: Nurses and other healthcare staff, the backbone of patient care, are stretched to their limits. A study by the University of Pennsylvania highlights the high levels of nurse burnout, a direct consequence of inadequate staffing. The study surveyed over 70,000 nurses and found that the chronic stress caused by high nurse-to-patient ratios significantly impacts their mental and physical health. The turnover rate in nursing, as reported by STAT News, is a testament to the unsustainable working conditions, with many nurses leaving the profession or seeking less demanding roles.
Patient Safety and Care Quality: The impact of understaffing on patients is equally alarming. According to the National Center for Biotechnology Information (NCBI), inadequate staffing in nursing homes is linked to increased incidents of falls, bedsores, and a general decline in the quality of care. This neglect is not limited to nursing homes; hospitals across the nation face similar challenges. As in the case of Rep. Johnson, patients often experience delayed care, unmet basic needs, and an increased risk of medical errors due to the high workload on understaffed healthcare workers.
The understaffing crisis extends beyond individual facilities. As National Nurses United points out, the issue is systemic and has become an industry standard practice. These ethically dubious practices have far-reaching consequences, eroding the sustainability of the healthcare system and diminishing public trust in its ability to provide competent and compassionate care.
Upholding Ethical Standards in Healthcare
The ethical implications of understaffing and system consolidation are profound. It's not merely a matter of operational efficiency; at its core, it's about honoring a fundamental commitment to patient care and worker dignity. The primary ethical concern in healthcare should be the obligation to provide safe, effective, and compassionate patient care, an obligation that is often directly undermined by profit-driven decisions.
The direct consequences of understaffing and consolidation, such as compromised patient safety, increased medical errors, and a decline in the quality of care, represent a breach of the ethical duty healthcare providers owe to their patients. When financial priorities overshadow patient needs, the very essence of healthcare's moral foundation is shaken. This shift not only impacts patient outcomes but also erodes public trust in healthcare systems.
The alarming levels of burnout, stress, and turnover among healthcare workers, particularly nurses, reflect a work environment that neglects their physical, emotional, and professional well-being. This neglect raises serious ethical concerns about the healthcare industry's commitment to its workforce. When staff well-being is compromised for operational efficiency or financial gain, the entire healthcare system suffers, leading to a demoralized workforce and diminished patient care.
The healthcare industry faces a critical ethical dilemma: balancing financial responsibilities with the imperative of humanistic care. While healthcare facilities have fiscal duties to their stakeholders, these must never be allowed to eclipse their ethical obligation to prioritize high-quality patient care and foster a safe and supportive work environment. The pursuit of profit must be balanced with the moral imperative to care for both patients and healthcare workers humanely. This balance is essential not only for the integrity of healthcare providers but also for the long-term sustainability of the healthcare system as a whole.
Addressing these ethical challenges is not just a moral imperative but a crucial step towards systemic reform for a more humane and effective healthcare system and, frankly, reducing costs to patients by way sufficient retention of nursing talent - reduced turn over means reduced labor costs which then translates to reduced insurance billing and less medical debt.
Concrete Steps Towards Reform
The reality of understaffing and the challenges posed by healthcare system consolidation in our healthcare system demand immediate and decisive action. We must engage in targeted advocacy and policy reform. Here are specific actions that individuals and organizations can undertake to drive meaningful change:
Contact Legislators: Advocate for federal and state legislation that mandates safe staffing ratios in healthcare facilities, addresses the challenges of healthcare consolidation and transparency, and holds hospitals accountable for malpractice. This includes challenging laws that limit malpractice awards, as these can protect healthcare institutions at the expense of patient rights.
Support Nursing Unions: Participate in advocacy campaigns of unions like National Nurses United, supporting their efforts for better working conditions and fair staffing levels. These unions play a crucial role in voicing the concerns of healthcare workers and advocating for their rights.
Engage with Healthcare Boards: Advocate for ethical staffing practices and policies that prioritize patient care over profit in healthcare organization board meetings. It's essential to influence decision-makers at the highest level to bring about systemic changes.
Advocate Against Unchecked Consolidation: Support policies that scrutinize healthcare mergers and acquisitions, as highlighted by the National Conference of State Legislatures (NCSL), to ensure they prioritize patient care and staff welfare. This includes backing state and federal initiatives to enhance oversight on healthcare mergers and acquisitions.
We must shift the focus from profit margins to the pillars of empathy, compassion, and quality care. It's time to honor the legacy of advocates like Rep. Eddie Bernice Johnson and ensure that our healthcare system upholds its fundamental commitment to patient care and worker dignity. Implementing these actions can lead to a more empathetic, compassionate healthcare environment, where patient care and staff welfare are prioritized, paving the way for a sustainable and trustworthy healthcare system.
Alcohol Use Does Not Harm DAA Efficacy, Yet Payer Barriers Persist
In healthcare, the interplay between perceptions and policies can sometimes adversely affect the very individuals they intend to benefit. One such area of contention is the perceived impact of alcohol use on the effectiveness of treatments for hepatitis C Virus (HCV). A recent study, published in JAMA Network Open and spotlighted by MedPage Today, led by Christopher T. Rentsch, PhD, and co-authored by Emily J. Cartwright, MD, explored this relationship. Their findings were clear: alcohol use and alcohol use disorder (AUD) did not diminish the odds of achieving a sustained virologic response with Direct-Acting Antiviral (DAA) therapy for chronic HCV infection.
Yet, despite such evidence, certain clinicians still hesitate or even refuse to administer HCV therapy to patients who consume alcohol. Furthermore, some payers mandate alcohol abstinence as a precondition for reimbursing DAA therapy for HCV. This stance becomes even more alarming in light of the Center for Disease Control & Prevention's (CDC) recent data, which shows a staggering 129% surge in reported cases of acute hepatitis C since 2014. It's imperative that we prioritize evidence over misconceptions, especially when lives are at stake.
The NIH's Perspective
A study supported by the National Institutes of Health (NIH) echoes these findings, revealing that individuals with alcohol use disorder (AUD) are less likely to receive antiviral treatments for hepatitis C. Despite current guidelines recommending such treatment irrespective of alcohol use, the study, led by scientists at Yale University, found that those with AUD, even if they were currently abstinent, were less likely to receive curative DAA treatment for hepatitis C within one or three years of diagnosis compared to those without AUD. This treatment gap, attributed to stigma around substance use and concerns about treatment adherence, underscores the need to address these disparities, especially among those with AUD.
The Case for Change
The implications of these studies are clear: policies need revision. Evidence-based policies in healthcare are paramount. Denying HCV patients access to DAA therapy based on their alcohol consumption habits is not only unwarranted but also counterproductive. As the study's authors have highlighted, such restrictions could pose unnecessary barriers for patients and hinder efforts to eliminate HCV.
Both state-specific policies and national guidelines, like those from The American Association for the Study of Liver Diseases (AASLD), need to evolve in light of these findings. Healthcare providers, policymakers, and advocacy groups have a pivotal role in driving this change, ensuring that all HCV patients, irrespective of their alcohol consumption habits, have access to the best possible care.
Charting a Path Forward
The revelations from these studies underscore more than just the need for policy adjustments; they challenge our collective commitment to championing evidence-based healthcare. In an era where misinformation can easily cloud judgment, it's crucial that treatments for HCV are not just theoretically available but are genuinely accessible to all, regardless of their alcohol consumption habits.
The findings from both the NIH and JAMA studies don't merely point out gaps; they expose deep-rooted systemic issues. Current policies have not adequately addressed the needs of HCV patients, and there's a pressing need for more inclusive guidelines.
To transform this call to action into tangible progress, we must:
Reassess and Revise Existing Policies: Ensure that guidelines, especially those from influential bodies like AASLD, are updated in line with the latest scientific evidence, removing any unwarranted barriers related to alcohol consumption. As demonstrated by the efficacy of the Center for Health Law and Policy Innovation’s (CHLPI) work in assessing and breaking down barriers to curative DAAs in Medicaid programs, further work must be done to break these payer-based barriers to care in private and employer sponsored plans.
Strengthen Advocacy and Awareness: Engage with healthcare providers, policymakers, and patients to spread awareness about the non-impact of alcohol on DAA therapy's efficacy, countering prevailing misconceptions.
Promote Continuous Research and Dialogue: Encourage further studies and maintain an open dialogue with all stakeholders to continuously refine our understanding and approach to HCV treatment.
The conclusions drawn from these studies underscore the challenges and opportunities that lie ahead of us. As the research emphatically states, alcohol consumption should not be a barrier to HCV treatment. Such restrictions are discriminatory in nature and threaten efforts in the fight to eliminate HCV. With evidence-based policy decisions and unwavering dedication, we can eliminate the barriers and ensure access to curative HCV treatment.
Payers Finally Facing Scrutiny for Denying Coverage
In February of this year, we covered the issues of inequity and administrative barriers patients face when seeking medically necessary care, especially when that care is for chronic or complex conditions. The blog followed ProPublica’s review of Christopher McNaughton’s trials (quite literally – there was a lawsuit) and tribulations with United Healthcare’s refusal of coverage. The situation highlighted how the payer had never intended to cover McNaughton’s care, regardless of necessity, and shopped “appeals” doctors in order to avoid finding his care was “medically necessary” and therefore required to be covered.
The ProPublica article was published some two years after United Healthcare (UHC) had floated instituting a policy of retroactive review and denial of emergency room care – the scheme went something along the lines of “if we think you didn’t really need to go to the ER, we’ll make you pay the whole bill yourself.” The tactic was roundly shouted down by advocates and providers as dangerous. Afterall, a payor reviewing documents rather than actually serving in an emergency room is never going to grasp the details of certain situations – like the unique symptoms women face when having a heart attack. Eventually UHC pressed the pause button and after some jockeying back and forth between the payer and the American Hospital Association, UHC said the entity wouldn’t enact the policy. Turns out, that might not have been an honest assertation according to a lawsuit issued by the U.S. Department of Labor (DOL). To be clear, the payer entity that’s targeted in the suit is a third-party administrator within UHC’s subsidiary – called UMR – but arguing that nuance isn’t going to matter to a patient who had their care claim unjustly denied.
The lawsuit asserts that UMR denied “thousands” of urine drug screenings and emergency room visits and violated the Affordable Care Act’s “prudent layperson” standard. That standard requires that payers reviewing claims consider how the average patient might approach concerns or symptoms they’re experiencing, not a medical professional. Now, there’s a thing about when these denials took place, 2015 to 2018, means UHC’s proposed policy of retroactive denial might have been an improvement over their previous policy of denying every urinalysis claim. Which is just…wild. Further, the suit alleges that UHC wouldn’t clearly tell doctors what additional information they needed during appeals processes – which sounds strikingly related to McNaught’s troubles with the payer.
DOL wants UHC to review all denied claims and adopt new policies which wouldn’t result in what amounts to an automatic denial process. And it’s not unheard of. In 2020, a judge in California found another UHC subsidiary automatically denied coverage of care to patients seeking to use their mental health and substance use treatment benefits and ordered some 67,000 claims to be re-reviewed and new processing policies to be adopted.
Similarly, Cigna is coming under scrutiny. A class action lawsuit filed in California is alleging Cigna denied some 300,000 claims in just two months last year. The absolutely bonkers part about that is Cigna used an algorithm that spent just 1.2 seconds on each claims review before sending them off to doctors to sign them – meaning those claims might not have ever actually been seen by human eyes in what amounts to an automatic denial process. Cigna, for its part, decided its public facing comment would be to call ProPublica’s coverage of their denial process “poorly written”. All that despite the House found ProPublica’s investigation worthwhile enough to drag Cigna in front of the Energy and Commerce Committee for a hearing on the legality of these denials. Mike Kreidler, the insurance commissioner for Washington characterized Cigna’s operation as an “abhorrent” practice “to routinely deny just to enhance the bottom line.”
All of this coming just weeks after the Office of Inspector General released a report on how Medicaid managed care organizations (MCOs) are utilizing prior authorizations processes and denial of care in an abusive fashion, harming the poorest patients in the country and with little oversight by the states contracting these MCOs. Among those listed with a prior authorization denial rate higher than 25% was United Healthcare. And none of that touching that more and more providers are contracted by UHC, meaning those denials were denials of care in which their own providers had decided what was medically necessary.
The scrutiny of payors coming by way of lawsuits is welcomed but advocates and policymakers shouldn’t wait for judges to determine the scope of harm patients are experiencing. We need to seek a statutory and regulatory reigning-in of these run-away practices bilking our healthcare systems at the expense of patient health. And we need to do it now.