U.S. Congress

4 Vital Health Issues — Not Tied to Covid — That Congress Addressed in Massive Spending Bill

Late last month, before President Joe Biden took office and proposed his pandemic relief plan, Congress passed a nearly 5,600-page legislative package that provided some pandemic relief along with its more general allocations to fund the government in 2021.

While the $900 billion that lawmakers included for urgent pandemic relief got most of the attention, some even bigger changes for health care were buried in the other parts of that huge legislative package.

The bundle included a ban on surprise medical bills, for example — a problem that key lawmakers had been wrestling with for two years. Starting in 2022, because of the new law, patients generally will not pay more for out-of-network care in emergencies and at otherwise in-network facilities.

But surprise bills weren’t the only health care issue Congress addressed as it ended a tumultuous year. Lawmakers also answered pleas from strained health facilities in rural areas, agreed to cover the cost of training more new doctors, sought to strengthen efforts to equalize mental health coverage with that of physical medicine and instructed the federal government to collect data that could be used to rein in high medical bills.

Here are some details about those big changes Congress made in December.

Rural Hospitals Get a Boost

Throwing a lifeline to struggling rural health systems — and, it appears, a bone to an outgoing congressional committee chairman — lawmakers gave rural hospitals a way to get paid by Medicare for their services regardless of whether they have patients in beds.

The law creates a new category of provider, known as a “rural emergency hospital.” Starting in 2023, some hospitals will qualify for this designation by maintaining full-time emergency departments, among other criteria, without being required to provide in-patient care. The Department of Health and Human Services will determine how the program is implemented and which services are eligible.

Medicare, the federal insurance program that covers more than 61 million Americans 65 and older or with certain disabilities, currently does not reimburse hospitals for emergency or hospital outpatient services unless the hospital also offers in-patient care.

That requirement has exacerbated financial problems for rural hospitals, many of which balance serving communities with fewer patients and less need for full in-patient services with the need for emergency and outpatient services. One study last year found 120 rural hospital facilities had closed in the past 10 years, with more at risk.

Hospital groups have praised the change, which was introduced by Sen. Chuck Grassley (R-Iowa), who has championed rural health issues and ended his term as chairman of the Senate Finance Committee this month. “I worked to ensure rural America would not go overlooked,” he said in a statement.

Medicare Invests in More Doctors

Hoping to address a national shortage of doctors that has reached critical levels during the pandemic, Congress created an additional 1,000 residency positions over the next five years.

Medicare will fund the positions, which involve supervised training to medical school graduates going into specialties like emergency medicine and are distributed among hospitals most in need of personnel, including rural hospitals.

Critics like The Wall Street Journal’s editorial board have noted this is Congress’ attempt to fix a problem it created in the late 1990s, when lawmakers capped the number of Medicare-funded residency positions in the United States, fearing too many doctors would inflate the cost of Medicare.

While Medicare is not the only source of educational funding and hospitals may add their own residency slots as needed, Medicare generally will reimburse hospitals for the number of residents they had at the end of 1996. Among other consequences of that 1996 cap, most Medicare-funded residencies are clumped at Northeastern hospitals, a 2014 study showed.

In contrast to the 1,000 positions created as part of the stimulus package, one bipartisan proposal in 2019 that was never enacted would have added up to 15,000 positions over five years.

Strengthening Mental Health Parity

The legislative package strengthens protections for mental health coverage, requiring federal officials to study the limitations insurance companies place on coverage for mental health and substance use disorder treatments.

In 1996 Congress passed the first law barring health insurers from passing along more of the cost for mental health care to patients than they would for medical or surgical care. The Affordable Care Act, building on earlier laws, made mental health and substance use disorder treatments an “essential health benefit” — in other words, it required most health insurance plans to cover mental health care.

But enforcing that standard has been a challenge, in part because violations can be hard to spot and the system has often relied on patients to notice — and report — them.

In December, lawmakers approved a measure requiring insurers to analyze their coverage and provide their findings to state and federal officials upon request.

They also instructed federal officials to request the findings from at least 20 plans per year that may have violated mental health parity laws and tell insurers how to correct any problems they find — under penalty of having insurer violations reported to their customers if they do not comply.

The law requires federal officials to publish an annual report summarizing the analyses they collect.

More Transparency in Cost and Quality

Americans often do not know how much they will be expected to pay when they enter a doctor’s office, an ambulance or an emergency room.

Taking another modest step toward transparency, Congress banned so-called gag clauses in contracts between health insurers and providers.

Among other things, these sorts of “gag” restrictions previously have prevented insurers and group health plans from sharing with patients and others — such as employers — information about a provider’s prices or quality. The December legislation also prohibited insurers from agreeing to contracts that prevent them from getting access electronically to claims and other information from providers on behalf of the insurer’s enrollees.

In 2018, Congress banned gag clauses in contracts between pharmacies and insurers or pharmacy benefit managers. Those gag clauses had prevented pharmacists from sharing cost information with patients, like whether they could pay a lower price for a prescription by paying out-of-pocket rather than using their insurance coverage.

The proposal approved in December’s legislation came from a big, bipartisan package of health care cost fixes passed in 2019 by the Senate Health, Education, Labor and Pensions Committee, but not by the rest of Congress. The committee’s Republican chairman, Sen. Lamar Alexander of Tennessee, retired from Congress this month. His Democratic partner on that package, Sen. Patty Murray of Washington, will take over the chairmanship as Democrats assume control of the Senate and has vowed to focus on health care affordability.

Consumers First, a health consumer-focused alliance of health professionals, labor unions and others, led by Families USA, praised the ban. The change is “a significant step forward” to stop “the abusive practices from hospitals and health systems and other segments of the health care sector that are driving up health care costs and making health care unaffordable for our nation’s families, workers, and employers,” it said in a statement.

KHN senior correspondent Sarah Jane Tribble contributed to this report.

Seniors Face Crushing Drug Costs as Congress Stalls on Capping Medicare Out-Of-Pockets

Sharon Clark is able to get her life-sustaining cancer drug, Pomalyst — priced at more than $18,000 for a 28-day supply — only because of the generosity of patient assistance foundations.

Clark, 57, a former insurance agent who lives in Bixby, Oklahoma, had to stop working in 2015 and go on Social Security disability and Medicare after being diagnosed with multiple myeloma, a blood cancer. Without the foundation grants, mostly financed by the drugmakers, she couldn’t afford the nearly $1,000 a month it would cost her for the drug, since her Medicare Part D drug plan requires her to pay 5% of the list price.

Every year, however, Clark has to find new grants to cover her expensive cancer drug.

“It’s shameful that people should have to scramble to find funding for medical care,” she said. “I count my blessings, because other patients have stories that are a lot worse than mine.”

Many Americans with cancer or other serious medical conditions face similar prescription drug ordeals. It’s often worse, however, for Medicare patients. Unlike private health insurance, Part D drug plans have no cap on patients’ 5% coinsurance costs once they hit $6,550 in drug spending this year (rising from $6,350 in 2020), except for very low-income beneficiaries.

Democrats and Republicans in Congress have proposed annual limits ranging from $2,000 to $3,100. But there’s disagreement about how to pay for that cost cap. Drug companies and insurers, which support the concept, want someone else to bear the financial burden.

That forces patients to rely on the financial assistance programs. These arrangements, however, do nothing to reduce prices. In fact, they help drive up America’s uniquely high drug spending by encouraging doctors and patients to use the priciest medications when cheaper alternatives may be available.

Growing Expense of Specialty, Cancer Medicines

Nearly 70% of seniors want Congress to pass an annual limit on out-of-pocket drug spending for Medicare beneficiaries, according to a KFF survey in 2019. (KHN is an editorially independent program of KFF.)

The affordability problem is worsened by soaring list prices for many specialty drugs used to treat cancer and other serious diseases. The out-of-pocket cost for Medicare and private insurance patients is often set as a percentage of the list price, as opposed to the lower rate negotiated by insurers.

For instance, prices for 54 orally administered cancer drugs shot up 40% from 2010 to 2018, averaging $167,904 for one year of treatment, according to a 2019 JAMA study. Bristol Myers Squibb, the manufacturer of Clark’s drug, Pomalyst, has raised the price 75% since it was approved in 2013, to about $237,000 a year. The company believes “pricing should be put in the context of the value, or benefit, the medicine delivers to patients, health care systems and society overall,” a spokesperson for Bristol Myers Squibb said via email.

As a result of rising prices, 1 million of the 46.5 million Part D drug plan enrollees spend above the program’s catastrophic coverage threshold and face $3,200 in average annual out-of-pocket costs, according to KFF. The hit is particularly heavy on cancer patients. In 2019, Part D enrollees’ average out-of-pocket cost for 11 orally administered cancer drugs was $10,470, according to the JAMA study.

The median annual income for Medicare beneficiaries is $26,000.

Medicare patients face modest out-of-pocket costs if their drugs are administered in the hospital or a doctor’s office and they have a Medigap or Medicare Advantage plan, which caps those expenses.

But during the past several years, dozens of effective drugs for cancer and other serious conditions have become available in oral form at the pharmacy. That means Medicare patients increasingly pay the Part D out-of-pocket costs with no set maximum.

“With the high cost of drugs today, that 5% can be a third or more of a patient’s Social Security check,” said Brian Connell, federal affairs director for the Leukemia & Lymphoma Society.

This has forced some older Americans to keep working, rather than retiring and going on Medicare, because their employer plan covers more of their drug costs. That way, they also can keep receiving financial help directly from drugmakers to pay for the costs not covered by their private plan, which isn’t allowed by Medicare.

‘This Is a Little Nuts’

All this has caused financial and emotional turmoil for people who face a life-threatening disease.

Marilyn Rose, who was diagnosed with chronic myeloid leukemia three years ago, until recently was paying nothing out-of-pocket for her cancer drug, Sprycel, which has a list price of $176,500 a year. That’s because Bristol Myers Squibb, the manufacturer, paid her insurance deductible and copays for the drug.

But the self-employed artist and designer, who lives in West Caldwell, New Jersey, recently turned 65 and went on Medicare. The Part D plan offering the best deal on Sprycel charges more than $10,000 a year in coinsurance for the drug.

Rose asked her oncologist if she could switch to an alternative medication, Gleevec, for which she’d pay just $445 a year. But she ultimately decided to stick with Sprycel, which her doctor said is a longer-lasting treatment. She hopes to qualify for financial aid from a foundation to cover the coinsurance but won’t know until sometime this month.

“It’s just strange you have to make a decision about your treatment based on your finances rather than what’s the right drug for you,” she said. “I always thought that when I get to Medicare age I’ll be able to breathe a sigh of relief. This is a little nuts.”

Bristol Myers Squibb paid Marilyn Rose’s insurance deductible and copays, so she could continue using Sprycel — a cancer drug for her leukemia — when she had private insurance. But Medicare doesn’t allow that. (Marilyn Rose)
Sharon Clark’s cancer drug, Pomalyst, costs her $18,000 for a 28-day supply. Patient assistance foundations provide financial aid, but to benefit she must be fortunate enough to catch the window for securing the limited funds available. (Sharon Clark)

Given the sticker shock, many other patients choose not to fill a needed prescription, or delay filling it. Nearly half of patients who face a price of $2,000 or more for a cancer drug walk away from the pharmacy without it, according to a 2017 study. Fewer than half of Medicare patients with blood cancer received treatment within 90 days of their diagnosis, according to a 2019 study commissioned by the Leukemia & Lymphoma Society.

“If I didn’t do really well at scrounging free drugs and getting copay foundations to work with us, my patients wouldn’t get the drug, which is awful,” said Dr. Barbara McAneny, an oncologist in Albuquerque, New Mexico, and past president of the American Medical Association. “Patients would just say, ‘I can’t afford it. I’ll just die.’”

The high drug prices and coverage gaps have forced many patients to rely on complicated financial assistance programs offered by drug companies and foundations. Under federal rules, the foundations can help Medicare patients as long as they pay for drugs made by all manufacturers, not just by the company funding the foundation.

But Daniel Klein, CEO of the PAN Foundation, which provides drug copay assistance to more than 100,000 people a year, said there are more patients in need than his foundation and others like it can help.

“If you are a normal consumer, you don’t know much about any of this until you get sick and all of a sudden you find out you can’t afford your medication,” he said. Patients are lucky, he added, if their doctor knows how to navigate the charitable assistance maze.

Yet many don’t. Daniel Sherman, who trains hospital staff members to navigate financial issues for patients, estimates that fewer than 5% of U.S. cancer centers have experts on staff to help patients with problems paying for their care.

Sharon Clark, who struggles to cover her cancer drugs, works with the Leukemia & Lymphoma Society counseling other patients on how to access helping resources. “People tell me they haven’t started treatment because they don’t have money to pay,” she said. “No one in this country should have to choose between housing, food or medicine. It should never be that way, never.”

This article is part of a series on the impact of high prescription drug costs on consumers made possible through the 2020 West Health and Families USA Media Fellowship.