America’s medical debt piles up

Presented by PhRMA: Delivered daily by 10 a.m., Pulse examines the latest news in health care politics and policy.

Sep 07, 2023 View in browser   By Ben Leonard and Chelsea Cirruzzo Presented by Driving the Day Medical debt is a growing problem. | Jacquelyn Martin/AP Photo DEALING WITH DEBT — Medical debt is becoming an increasingly pervasive problem, with a seemingly never-ending stream of media reports chronicling bankruptcies, garnished wages, lost homes and insidious tactics from hospitals all too eager to sue their patients. State lawmakers are taking notice and enacting a flurry of reforms designed to protect their constituents from late notices, threatening voicemails and credit score declines, POLITICO’s Dan Goldberg reports. Why it matters: The actions — in more than a dozen states — represent a determined, if patchwork, effort to help the roughly 100 million Americans who deal with medical debt. “Policymakers are hearing from their constituents that this is an emergency and relief is needed,” said Julia Char Gilbert, a policy advocate at the Colorado Center on Law and Policy, who testified in support of the state’s new law. State of play: In June, Colorado became the first state to enact a law prohibiting consumer reporting agencies from including medical debt in credit reports. The law also requires debt collectors to notify people that medical debt won’t be included in their credit report. New York lawmakers overwhelmingly passed a similar bill this spring. Oregon passed a law this year limiting the interest that can be charged on medical debt and requiring nonprofit hospitals to screen patients with bills of $500 for financial assistance eligibility. What to watch: North Carolina’s legislation would cap interest on medical debt collections, prohibit collectors from foreclosing on property or garnishing wages and regulate how medical debt is shared with consumer reporting agencies. That bill passed unanimously in the state Senate and is stalled in the House as lawmakers work on a budget. Pennsylvania’s bill would authorize state funds to be used to purchase and forgive medical debt. Pennsylvanians would be eligible if their household income is less than four times the poverty level or their medical debt equals more than 5 percent of their income. The legislation passed the House with bipartisan support and is part of ongoing budget negotiations in the state Senate. WELCOME TO THURSDAY PULSE. What’s next for the converging Senate and House health care packages? Reach us with news tips, feedback and scoops at bleonard@politico.com or ccirruzzo@politico.com. Follow along @_BenLeonard_ and @ChelseaCirruzzo. TODAY ON OUR PULSE CHECK PODCAST, host Katherine Ellen Foley talks with POLITICO reporter Megan R. Wilson about the debate surrounding Congress' efforts to better regulate pharmacy benefit managers, the pharmaceutical middlemen that negotiate drug prices between manufacturers, insurers and government health providers. Listen to today’s Pulse Check podcast   A message from PhRMA: Middlemen can profit from where patients fill their prescriptions. Because insurance companies and PBMs own pharmacies, too.   In Congress Sen. Jon Tester expressed some frustration with Sen. Chuck Grassley's opposition to the nominee for deputy secretary of Veterans Affairs. | Francis Chung/E&E News TESTER PUSHES GRASSLEY ON VA NOM HOLD — Senate Veterans’ Affairs Committee chair Jon Tester (D-Mont.) told Pulse Wednesday he isn’t happy about Sen. Chuck Grassley’s (R-Iowa) hold on the Biden administration’s nominee to be the No. 2 official at the VA. “I wish he would lift it,” Tester said. Grassley isn’t showing signs of backing down — he’s still “strongly opposed” to Tanya Bradsher’s nomination, spokesperson Clare Slattery said, adding that he will likely divulge more reasons for his opposition this week. Sen.Jerry Moran (R-Kan.), the panel’s ranking member, who’s opposed her nomination, told Pulse Tuesday that he hadn’t thought about whether Grassley should lift the hold yet. Grassley has been holding up Bradsher’s nomination since July, citing whistleblower testimony saying Bradsher failed to properly oversee a correspondence system that he believes mishandled veterans’ personal health information. If confirmed, Grassley noted, Bradsher would oversee a much more substantial effort to upgrade the VA’s beleaguered electronic health records system. Bradsher has defended herself against the criticism, saying that the VA has enhanced security, bolstered training and limited access to better protect veterans’ information. CHECK YOUR PRIORS — A group of lawmakers is awaiting a final rule from CMS on prior authorization, Ben and POLITICO’s Robert King report. Doctors have long complained to Congress about the time-consuming paperwork and delayed care that comes when insurers fail to authorize costly procedures or treatments. A bipartisan bill from Sen. Roger Marshall (R-Kan.) and Rep. Suzan DelBene(D-Wash.) would require Medicare Advantage plans and other public payers, such as those managing state Medicaid plans, to implement an electronic process for approving medical treatments in a bid to reduce delays in care and save doctors time. But its price tag — $16 billion over 10 years, according to the Congressional Budget Office — stalled its momentum last year after it unanimously passed the House. In December, CMS proposed a rule similar to the legislation. If finalized, the government’s baseline spending, which the CBO measures new legislation against, would be significantly higher to account for the new rule. That would mean the Marshall-DelBene legislation would add substantially less to the federal budget. A Marshall aide, granted anonymity to discuss some bill details, told POLITICO that based on discussions with CBO, Marshall expects the legislation would cost $4 billion over a decade if CMS’ finalized rule doesn’t include a “real-time” process for routinely approved items and a 24-hour response time for “urgently needed” care. But if the final rule included such provisions, which more than 230 House members and 61 senators are pushing, the legislation would have negligible cost, the aide said. CMS Press Secretary Sara Lonardo told POLITICO that the agency appreciates the feedback from lawmakers, but she wouldn’t comment on the rule’s timing of the rule or whether CMS would agree to the changes. CBO declined to comment. Not everyone’s on board. Ceci Connolly, CEO of the Alliance of Community Health Plans, stressed that lawmakers should focus on creating as standard of a prior authorization process as possible between different types of plans. She also said that time requirements for prior authorization could lead to a rise in care being denied.   DOWNLOAD THE POLITICO APP: Stay in the know with the POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need. DOWNLOAD FOR iOS – DOWNLOAD FOR ANDROID.     PEPFAR RESET? Sen. Bob Menendez(D-N.J.) told reporters Wednesday that he’s open to a compromise on reupping the landmark global HIV/AIDS program set to expire at the end of the month. Though Menendez, who chairs the Foreign Relations Committee, has spent months pushing for a standard five-year renewal, he’s floating a shorter renewal of the President's Emergency Plan for AIDS Relief in the face of House Republicans opposing any extension. Opponents say that some of PEPFAR’s nearly $7 billion annual budget supports abortion — a claim the Biden administration, the program’s leaders and outside experts reject. “I’m hoping, at a minimum, that we get a three-year authorization through the [Appropriations] Committee,” Menendez said. “I would prefer to have a straight-up, five-year reauthorization … But at this point, I’m just hoping for more than a one-year extension.” Sen. James Risch (R-Idaho), Menendez’s GOP counterpart on the Senate Foreign Relations Committee, refused to discuss PEPFAR when asked Wednesday. “Not now,” he said. HEALTH CARE PACKAGE REVEAL — The House Republicans’ major health care package focuses on transparency measures — with hospitals, insurers and pharmacy benefit managers taking the brunt of proposed changes, according to a draft summary obtained by POLITICO’s Megan R. Wilson. The legislation, expected to be pushed this fall, is the result of a monthslong effort to cobble together several bills from committees. The package draws heavily from the PATIENT Act and has many provisions to codify and expand the surprise billing rules stemming from the No Surprises Act. The legislation would also include: — A provision for site-neutral payments, which would ensure Medicare pays the same amount for doctor-administered drugs in a hospital outpatient department as beneficiaries do in a doctor’s office — New requirements for pharmacy benefit managers— the pharmaceutical middlemen that manage prescription drugs for health insurers — to report rebates they extract from drugmakers, ban spread pricing in Medicaid and report “hidden fees” — Provisions that would speed approvals by allowing the FDA to share information with generic drugmakers about how their formulations differ from the brand Pay-for: One way that lawmakers want to pay for the bill is to drain all $7 billion from the Medicare Improvement Fund — a coveted funding source that Congress likely wants to save for a year-end package.   A message from PhRMA:   PHARMA WATCH DRUGMAKER BOWS OUT OF IRA LAWSUIT — Astellas Pharma withdrew its lawsuit Wednesday challenging Medicare’s drug price negotiation authority, more than a week after a drug the company expected to be chosen for the first round of talks didn’t make the cut, POLITICO’s Lauren Gardner reports. The Japanese drugmaker’s U.S. affiliate had anticipated CMS selecting its prostate cancer drug, Xtandi, as one of the first 10 drugs subject to negotiations when it sued HHS in July. The company said it still believes the program “is bad policy and unconstitutional.”   JOIN US ON 9/12 FOR A TALK ON THE NEW AGE OF TRAVELING: In this new era of American travel, trending preferences like wellness tourism, alternative lodging and work-from-anywhere culture provide new but challenging opportunities for industry and policy leaders alike. Join POLITICO on Sept. 12 for an expert discussion examining how the resilience of the tourism and travel industries is driving post-pandemic recovery. REGISTER HERE.     Names in the News Margaret French has joined Venn Strategies as a vice president in the firm’s health practice. She most recently worked in senior roles at America’s Essential Hospitals and previously worked at America’s Physician Groups and in the office of Sen. Joni Ernst (R-Iowa). The Healthcare Distribution Alliance has named Kala Shankle its vice president of regulatory affairs. Before that, she was a lawyer at Epstein, Becker & Green. Michael Beard is now chief of staff for HHS’ Office of Global Affairs. He most recently was executive director for UN Foundation advocacy. What We're Reading POLITICO’s Adam Cancryn reports on Biden’s disregard for previous Covid measures. STAT reports on a “conservative, gun-toting” doctor in southwestern Virginia working to protect abortion access.   A message from PhRMA: Insurance companies and pharmacy benefit managers (PBMs) are putting their profits before your health. That’s because the largest PBMs own or are owned by the largest insurance companies, and they own pharmacies, too. First the PBM can deny coverage for your medicine in favor of one that makes them more money. Then, they steer you to the pharmacy they own. Without you ever knowing why it all happens this way. See what else they do.     Follow us on Twitter Dan Goldberg @dancgoldberg Chelsea Cirruzzo @chelseacirruzzo Katherine Ellen Foley @katherineefoley Lauren Gardner @Gardner_LM Kelly Hooper @kelhoops Robert King @rking_19 Ben Leonard @_BenLeonard_ David Lim @davidalim Megan Messerly @meganmesserly Alice Miranda Ollstein @aliceollstein Carmen Paun @carmenpaun Daniel Payne @_daniel_payne Evan Peng @thepngfile Ruth Reader @RuthReader Erin Schumaker @erinlschumaker Megan R. Wilson @misswilson   Follow us

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