Supreme Court Justice Kagan’s Role in Challenge to Health Care Legislation Questioned
WASHINGTON, DC (May 18, 2011) — Judicial Watch, a conservative, nonpartisan educational foundation that promotes transparency, accountability and integrity in government, politics and the law, announced that it has obtained documents suggesting Supreme Court Justice Elena Kagan helped coordinate the Obama administration’s legal defense of the Affordable Care Act (ACA) while she served as Solicitor General. Kagan has said she was not involved in Department of Justice (DOJ) preparations for legal challenges to ACA. Judicial Watch pointed out that the Supreme Court justice did not recuse herself from the High Court decision in April 2011 not to “fast-track” for Supreme Court review Virginia’s lawsuit challenging the legislation.
The following are highlights from the documents obtained by Judicial Watch pursuant to a Freedom of Information Act (FOIA) lawsuit filed on February 24, 2011. (Judicial Watch’s lawsuit has been consolidated with a similar FOIA lawsuit that had been first filed against the DOJ by the Media Research Center. The lawsuits are now both before the U.S. District Court for the District of Columbia. The documents referenced in this release were first produced in the Media Research litigation.)
According to a January 8, 2010, email from Neal Katyal, former Deputy Solicitor General (and current Acting Solicitor General) to Brian Hauck, Senior Counsel to Associate Attorney General Thomas Perrelli, Kagan was involved in the strategy to defend ACA from the very beginning:
Subject: Re: Health Care Defense:
Brian, Elena would definitely like OSG [Office of Solicitor General] to be involved in this set of issues…we will bring in Elena as needed. [The "set of issues" refers to another email calling for assembling a group to figure out "how to defend against the…health care proposals that are pending."]
On March 21, 2010, Katyal urged Kagan to attend a health care litigation meeting that was evidently organized by the Obama White House: “This is the first I’ve heard of this. I think you should go, no? I will, regardless, but feel like this is litigation of singular importance.”
In another email exchange that took place on January 8, 2010, Katyal’s Department of Justice colleague Brian Hauck asked Katyal about putting together a group to discuss challenges to ACA. “Could you figure out the right person or people for that?” Hauck asked. “Absolutely right on. Let’s crush them,” Katyal responded. “I’ll speak with Elena and designate someone.”
However, following the May 10, 2010, announcement that President Obama would nominate Kagan to the U.S. Supreme Court, Katyal’s position changed significantly as he began to suggest that Kagan had been “walled off” from ACA discussions.
For example, the documents included the following May 17, 2010, exchange between Kagan, Katyal and Tracy Schmaler, a DOJ spokesperson:
Schmaler to Katyal, Subject HCR [Health Care Reform] litigation: “Has Elena been involved in any of that to the extent SG [Solicitor General's] office was consulted?…
Katyal to Schmaler: “No she has never been involved in any of it. I’ve run it for the office, and have never discussed the issues with her one bit.”
Katyal (forwarded to Kagan): “This is what I told Tracy about Health Care.”
Kagan to Schmaler: “This needs to be coordinated. Tracy you should not say anything about this before talking to me.”
Included among the documents is a Vaughn index, a privilege log which describes records that are being withheld in whole or in part by the Justice Department. The index provides further evidence of Kagan’s involvement in ACA-related discussions.
Affordable Care Act rules require review of large insurance rate hikes
WASHINGTON, DC (May 18, 2011) — The Department of Health and Human Services (HHS) issued a final regulation to ensure that large health insurance premium increases will be thoroughly reviewed, and consumers will have access to clear information about those increases. Combined with other important protections from the Affordable Care Act, these new rules will help lower insurance costs by moderating premium hikes and provide consumers with greater value for their premium dollar. In 2011, this will mean rate increases of 10-percent or more must be reviewed by state or federal officials.
“Effective rate review works – it does so by protecting consumers from unreasonable rate increases and bringing needed transparency to the marketplace,” said HHS Secretary Kathleen Sebelius. “During the past year we have worked closely with states to strengthen their ability to review, revise or reject unreasonable rate hikes. This final rule helps build on that partnership to protect consumers.”
Starting September 1, 2011, the rule requires independent experts to scrutinize any proposed increase of 10-percent for most individual and small group health insurance plans. States will have the primary responsibility for reviewing rate increases. While most states will take on this responsibility, HHS will serve in a backup role in states that don’t have the resources or authority to review rates. HHS has awarded $44 million in Affordable Care Act grants to states to help strengthen their oversight capabilities. An additional $200 million will continue to be available to states under the Act.
Starting September 2012, the 10-percent threshold will be replaced by state-specific thresholds that reflect the insurance and health care cost trends in each state. The final rule clarifies that HHS will work with states in developing these thresholds.
Publication of the final rule comes as health insurance companies have reported some of their highest profits in years. One cause for these profits is that actual medical costs are growing more slowly than what insurance companies projected when they set their 2011 rates last year. However, many of the rates consumers and small employers pay today don’t reflect these lower costs.
The rule requires insurance companies to provide consumers with easy to understand information about the reasons for unreasonable rate increases and post the justification for those hikes on their website as well as on the HHS Affordable Care Act website, www.healthcare.gov.
“Strong and transparent rate review processes are necessary to help bring down costs for consumers,” said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight. “Rate review will ensure that increases are based on reasonable estimates and real-time data on medical cost trends and health care utilization.”
The regulation issued today finalizes proposed rules issued in December 2010. The final rule has several additions to the proposed rule, including a requirement that states provide an opportunity for public input in the evaluation of rate increases subject to review. This will strengthen the consumer transparency aspects of the new rule. HHS is also requesting comment from the public on applying the rule to individual and small group coverage sold through associations, which is sometimes exempt from state oversight.
Ten Percent of Cancer Patients Abandon Oral Anti-cancer Drugs
WASHINGTON, DC (May 18, 2011) – Ten percent of cancer patients failed to fill their initial prescriptions for oral anti-cancer drugs, according to a new study published jointly today in the Journal of Oncology Practice (JOP) and American Journal of Managed Care (AJMC). The study was based on an analysis conducted by Avalere Health LLC using pharmacy transaction data over a two-year period from 2007 to 2009. This study has also been accepted for presentation at the American Society of Clinical Oncology annual meeting on June 6th (abstract number 82120).
The study, “Patient and Plan Characteristics Affecting Abandonment of Oral Oncolytic Prescriptions,” finds that patients were primarily abandoning their anti-cancer drugs due to two key factors: high cost-sharing and higher prescription activity. For example, claims with cost-sharing over $500 were four times more likely to be abandoned than claims with cost-sharing of $100 or less. Across the sample of prescription claims studied, Medicare coverage and lower income were also related to higher rates of abandonment when each were compared individually.
The study shows that while anti-cancer medicines offer benefits to patients, access to them is difficult due to high rates of cost-sharing. While 73 percent of newly initiated oncolytic patients had a cost-sharing amount of $100 of less, 16 percent required an out-of-pocket cost of greater than $500. The study found that the abandonment rate increased with cost-sharing amounts. Claims with cost-sharing above $500 had the highest abandonment rate – 25 percent – as compared with an abandonment rate of six percent for claims with cost-sharing of $100 or less.
“Our study shows that many cancer patients are abandoning the medicine they need,” said Lauren Barnes, vice president, Avalere Health. “With 45.5 percent of Medicare patients in our sample facing cost-sharing greater than $500 for their first anti-cancer drug, this is a Medicare quality issue of the first order.”
The study was authored by experts from Avalere Health, including Michael Johnsrud, PhD, who leads the Health Economics and Outcomes Research group at Avalere Health, and oncologist Lee Schwartzberg, MD, medical director of The West Clinic in Memphis, Tenn.
Until recently, drug therapy for patients with cancer consisted of intravenous (IV) infused treatment. Anti-cancer medications that can be administered orally are a relatively new addition to cancer patients and provide benefits to patients. Such oral anti-cancer medications are reported to account for approximately 25 to 35 percent of the current oncology pipeline.
“Cost-sharing clearly has an impact on whether a patient initiates his or her oral anti-cancer medicine, with the abandonment rate rising as the cost-sharing increases,” said Johnsrud, a senior vice president at Avalere Health. “Importantly, claims for cost-sharing over $500 have more than four times higher an abandonment rate than claims of cost-sharing with less than $100. This demonstrates that patients are confronted with potential barriers in accessing anti-cancer medications.”
The number of concurrent prescriptions also had an impact on abandonment of an oncolytic. Patients with more than five claims for non-cancer medicines in the previous month had an abandonment rate of 12 percent, as compared to nine percent for patients with no claims in the previous month.
Finally, lower income and patients covered by Medicare also had higher rates of abandoning their anti-cancer medications. Patients with incomes of less than $40,000 per year had an abandonment rate of 11 percent, decreasing to 10 percent for incomes between $40,000 and $75,000 and nine percent for incomes above $75,000. Abandonment rates for Medicare claims were 16 percent, versus 9 percent for those with commercial insurance.
“The bottom line is that patients should have access to the most clinically appropriate care for their condition,” said Schwartzberg. “We should not be creating obstacles to care for those who need it the most.”
The authors used a nationally representative pharmacy claims database and identified 10,508 patients with Medicare and commercial insurance for whom oral anti-cancer therapy was initiated between 2007 and 2009. They calculated the abandonment rate for the initial claim, in which abandonment was defined as reversal of an adjudicated pharmacy claim without a subsequent paid claim for any oncolytic (oral or intravenous) within the ensuing 90 days. The authors used bivariate and multivariate logistic regression analyses including patient demographics, plan type, drug type, cost-sharing and concurrent prescription activity.
In addition to Johnsrud and Schwartzberg, the study was authored by Sonya Blesser Streeter, MPP, MPH and Nadia Husain, ScM of Avalere. It was funded by the Community Oncology Alliance, in partnership with Celgene Corporation, Genentech, Millennium Pharmaceuticals, Novartis Pharmaceuticals and Pfizer, Inc.
Cancer Drug Use and Spending to Rise Sharply by 2013
ORLANDO, FL (May 18, 2011) – Expensive new cancer drugs treating increasing numbers of patients could drive cancer drug spending by as much as 15 percent a year through 2013. At this accelerated rate, oncology drugs will likely rise to the second or third largest trend-driving category by 2015, following only diabetes and central nervous system (CNS) treatments, according to the newly released 2011 Medco Drug Trend Report which tracks utilization and spending.
Although the incidence of some types of cancers may be decreasing, with better detection the overall numbers of cancers reported in an aging population has increased significantly. Fortunately, due to advanced treatment, the number of U.S. cancer survivors is expected to increase by more than 30 percent – from 13.8 million in 2010 to 18 million by 2020.
This has heightened demand for oncology specialty drugs – targeted therapies that have increased 6.7 percent according to the report by Medco Health Solutions, Inc. The drug trend for specialty cancer treatments reached 21.2 percent, due primarily to unit cost increases of 13.7 percent.
“New cancer drugs reaching the market are expected to double during the next several years,” said Dr. Glen Stettin, Medco’s chief medical officer. “Early diagnosis, evidence-based treatment and enhanced coordinated care have essentially turned some forms of the condition into chronic illnesses that can be managed longer-term. Continued innovation, including companion diagnostic or pharmacogenomic testing, can help ensure the right person is getting the right drug at the proper dose and reduce waste. However, due to the high cost and extended time patients may need for treatment, using these latest design management tools is paramount.”
With the use of many newly introduced specialty drugs reaching market in recent years, oncology drug price inflation surged to 11.5 percent during 2010. Higher prescribing for newer treatments such as Revlimid® (lenalidomide) for multiple myeloma and Gleevec® (imatinib mesylate), a tablet for chronic myeloid leukemia and gastrointestinal stromal tumors drove sharp increases in trend. More than 90 percent of anti-cancer drugs approved since 2004 cost more than $20,000 for a 12-week course of therapy, according to the Journal of the National Cancer Institute.
Many of these newer treatments are oral medications or can be self administered, changing the dynamic of cancer care delivery toward the home, rather than in physician’s office or infusion center. This dynamic shows no signs of abating.
“It’s an exciting time in the area of cancer treatment, but as these new, targeted treatments come to market it is vital to ensure that each patient and caregiver understands the importance of adherence and the detailed dosing instructions associate with them,” said Dr. Milayna Subar, national practice leader for the Medco Oncology Therapeutic Resource Center™. “Helping patients manage the unique needs of their disease across the continuum of care with specialists and a personalized medicine program will help to improve outcomes for the patient and could help to manage down the projected drug trend of 15-17 percent for these new specialty medications.”
Stettin added: “The emergence of biosimilar drugs will help mitigate some of the costs of specialty drugs, when they start to reach the marketplace in or around 2013. We are already working with employers and other health plan providers to prepare for these fast-approaching future trends.”
2010 Drug Trend: 3.7 Percent
Higher generic drug dispensing helped limit prescription drug spending growth to 3.7 percent during 2010, the report also revealed. In 2010, more than 71 percent of the prescription drugs dispensed were for generics. In fact, Medco, during its second quarter earnings reported that the generic dispensing rate had reached a record 73 percent. Generic drugs had a limited inflation rate of 0.5 percent and served as a lever to control overall prescription drug costs during 2010, the report said. Drug utilization during 2010 increased 2.1 percent, which is the highest rate of growth since 2005 when it was 2.7 percent.
Specialty drugs, which are largely brand-name biologics, accounted for 70.1 percent of overall drug trend. Both utilization and unit costs increased for these medicines, which treat rheumatoid arthritis, multiple sclerosis, cancer, and an array other conditions, including rare diseases such as hemophilia and pulmonary arterial hypertension.
“We have helped our clients adapt to these changes in the pharmaceutical market by advising them to take advantage of the savings provided by generics and mail order, both of which serve to counter the cost of brand name and specialty drugs,” said Medco Chairman and CEO David B. Snow Jr. “Our clients have benefited from relatively modest increases in pharmacy spending, as well as use of the Medco Therapeutic Resource Centers™ and personalized medicine to improve patient outcomes and mitigate medical costs.”
Diabetes drugs – the leading trend driver
For the fourth consecutive year, diabetes medications were the largest therapeutic category of drugs for driving overall spending growth. The drug trend for this group, which includes insulin, hypoglycemic drugs, glucose-elevating agents and supplies, was 7.6 percent. However, the large number of patients with diabetes led this category to contribute nearly 17 percent of the overall growth in drug spending last year. Unit costs for these medicines increased 5 percent and utilization increased 2.5 percent.
“Demand for these diabetes drugs as a category remains unabated as America struggles with what has become a worldwide epidemic,” Stettin said. “The number of people in the U.S. being treated for diabetes is expected to increase from nearly 25 million today to 44 million by 2035. Lifestyle changes, especially diet and exercise, need to be emphasized in order to address the financial and health care burden brought about by this disease.”
Respiratory, rheumatological, neurological and ADHD drugs were other key categories for driving spending growth. Generic versions of treatments for migraines, seizures and ulcers helped moderate prescription spending. Cancer treatments ranked seventh among the key drivers of costs for pharmacy benefit plans, but much of the costs for these drugs are not reflected in the Medco Drug Trend Report, since these treatments are often covered under major medical benefits.
To view the 2011 Medco Drug Trend Report, please visit www.drugtrendreport.com.
Alarming Number of Middle-Income Americans Delaying Retirement
CHICAGO, IL (May 17, 2011) — A majority (73 percent) of our country’s middle-income Baby Boomers are rethinking their retirement timing due to the recent economic crisis and of those, 79 percent are delaying their retirement by an average of five years, according to a new study released by the Bankers Life and Casualty Company Center for a Secure RetirementSM (CSR).
The study, Middle-Income Boomers, Financial Security and the New Retirement, which focused on 500 middle-income Americans between ages 47 and 65 with income between $25,000 and $75,000, found that one in seven (14 percent) believe that they will never be able to retire due to the turbulent economy.
There are several factors contributing to this shift in retirement age and timing for the middle-income Baby Boom generation. According to the study, 71 percent worry about outliving their money once they retire, 68 percent have experienced a decline in the value of their retirement accounts within the past three years and more than half (55 percent) have saved less than $100,000.
In light of the recent decline in the economy, working in retirement is fast becoming a new reality for many middle-income Americans. The CSR’s study found that three out of four (75 percent) expect that their retirement will involve work in some form and more than half (57 percent) say that they will have to work for financial reasons.
While most people expect that they’ll be able to choose when they retire, two-thirds (64 percent) of survey participants are concerned about being forced to retire, most commonly due to loss of employment (44 percent) or failing health or disability (40 percent).
“Whether you hope to retire in five or 15 years, it’s not too late to create an achievable plan,” said Scott Perry, president of Bankers Life and Casualty Company, a national life and health insurer. “Middle-income Boomers should take full advantage of the retirement savings opportunities through their employer or a professional advisor, reduce financial debt, practice healthy living and help insure against life’s uncertainties, whether its health costs, long-term care or out-living one’s savings.”
Medicare Remains Viable, Trustees Report Shows, but Challenges Remain
WASHINGTON, DC (May 13, 2011) – The Medicare Trustees Report released today shows that while Medicare remains solvent longer than expected prior to passage of the Affordable Care Act, challenges remain for securing the long term financial health of the Medicare program. Expenditures for the Supplementary Medical Insurance (SMI) Trust Fund were lower than expected this year.
The Trustees annual report says that Medicare’s Hospital Insurance (HI) Trust Fund is now projected to remain solvent until 2024. Without the reforms in the Affordable Care Act, the Medicare HI Trust Fund would expire in just five years – in 2016. The report issued today shows these reforms added eight years of solvency.
This report shows that without the Affordable Care Act, the outlook for the Hospital Insurance Trust Fund today would be much worse, said Donald Berwick, M.D., Administrator of the Centers for Medicare & Medicaid Services. “CMS is implementing critical reforms to improve care and reduce costs and improve the overall health of Medicare’s beneficiaries and the Trust Fund.”
Actual Part B expenditure growth in 2010 was lower than expected. Part B is funded by a combination of beneficiary premiums and general revenue financing.
Part D, the Medicare prescription drug program, is also in financial balance as a result of annual updating of enrollee premiums and benefit payments. Projected expenditures are slightly lower overall than in last year’s report, reflecting lower-than-expected costs in 2009 and 2010 together with a reduction in the projected growth in prescription drug spending in the U.S. for the next 10 years.
HI Trust Fund expenditures have exceeded income annually since 2008 and are projected to continue doing so under current law in all future years. Interest earnings and asset redemptions are required to cover the difference. HI Trust Fund assets are projected to cover annual deficits through 2023, with asset depletion beginning in 2024.
The five year change from the 2010 trustee report was due to a slowdown in the national economy, which resulted in a decline in tax revenues and higher real projected expenditures. This is not the first time that the HI Trust Fund expiration date has been affected by a decline in anticipated revenues. In 2004, for example, the Trust Fund exhaustion date moved up by 7 years, in large part because payroll tax revenues in 2003 were lower than had been anticipated.
The projections in this year’s report demonstrate the importance of the Affordable Care Act as a tool to improve the outlook for the HI Trust Fund but also point to a need to continue serious discussions about driving care improvements that also address underlying cost drivers in the Medicare program.
The Medicare Trustees are Treasury Secretary and Managing Trustee Timothy F. Geithner, Health and Human Services Secretary Kathleen Sebelius, Labor Secretary Hilda L. Solis, and Social Security Commissioner Michael J. Astrue. The two public representatives appointed by the President and confirmed by the Senate, are Charles P. Blahous III and Robert D. Reischauer began serving on September 17, 2010. CMS Administrator Berwick is designated as Secretary of the Board.
The report is available at: http://www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2011.pdf