Medicare Overpaid $251 Million in 18 Months for Drugs
By reimbursing certain drug providers based on outdated pricing, Medicare has squandered millions of dollars that could have been saved if the recommendations of a government watchdog had been followed.
As reported by The Washington Examiner, the Office of the Inspector General for the Health and Human Services Dept. found that Medicare has continued to pay providers of infusion drugs, which are delivered through IV pumps, at higher prices than necessary. HHS is paying providers based on 2003 prices when the drugs were more expensive--this despite warnings from the IG, most recently in February, 2013.
“Medicare payment amounts for infusion drugs…substantially exceeded the estimated acquisition costs,” according to findings reported on the IG’s website.
The IG said that had its recommendations been implemented, $251 million would have been saved over an 18-month period.
The Centers for Medicare & Medicaid Services (CMS) apparently ignored the IG when it proposed that the agency push legislation that would have brought the method of reimbursement for infusion drugs in line with the process for other pharmaceuticals. As an alternative, the IG recommended that the CMS employ competitive bidding to supply infusion drugs.
“CMS partially concurred with the first recommendation, but has not taken steps toward seeking legislation,” The IG’s report said. “CMS concurred with the second recommendation but said subsequently that…infusion drugs will not be included in competitive bidding until at least 2017.”
So presumably the overpaying won’t stop anytime soon.
Coming Soon: Deductible Relief Day!
You may be familiar with the concept of Tax Freedom Day – the date on which you have earned enough to pay all of your taxes for the year. Focusing on a different kind of financial burden, analysts at the Kaiser Family Foundation have created Deductible Relief Day – the date on which people in employer-sponsored insurance plans have spent enough on health care to meet the average annual deductible.
Average deductibles have more than tripled over the last decade, forcing people to spend more out of pocket each year. As a result, Deductible Relief Day is “getting later and later in the year,” Kaiser’s Larry Levitt said in a tweet Thursday.
Chart of the Day: Families Still Struggling
Ten years into what will soon be the longest economic expansion in U.S. history, 40% of families say they are still struggling, according to a new report from the Urban Institute. “Nearly 4 in 10 nonelderly adults reported that in 2018, their families experienced material hardship—defined as trouble paying or being unable to pay for housing, utilities, food, or medical care at some point during the year—which was not significantly different from the share reporting these difficulties for the previous year,” the report says. “Among adults in families with incomes below twice the federal poverty level (FPL), over 60 percent reported at least one type of material hardship in 2018.”
Chart of the Day: Pragmatism on a Public Option
A recent Morning Consult poll 3,073 U.S. adults who say they support Medicare for All shows that they are just as likely to back a public option that would allow Americans to buy into Medicare or Medicaid without eliminating private health insurance. “The data suggests that, in spite of the fervor for expanding health coverage, a majority of Medicare for All supporters, like all Americans, are leaning into their pragmatism in response to the current political climate — one which has left many skeptical that Capitol Hill can jolt into action on an ambitious proposal like Medicare for All quickly enough to wrangle the soaring costs of health care,” Morning Consult said.
Chart of the Day: The Explosive Growth of the EITC
The Earned Income Tax Credit, a refundable tax credit for low- to moderate-income workers, was established in 1975, with nominal claims of about $1.2 billion ($5.6 billion in 2016 dollars) in its first year. According to the Tax Policy Center, by 2016 “the total was $66.7 billion, almost 12 times larger in real terms.”
Chart of the Day: The Big Picture on Health Care Costs
“The health care services that rack up the highest out-of-pocket costs for patients aren't the same ones that cost the most to the health care system overall,” says Axios’s Caitlin Owens. That may distort our view of how the system works and how best to fix it. For example, Americans spend more out-of-pocket on dental services ($53 billion) than they do on hospital care ($34 billion), but the latter is a much larger part of national health care spending as a whole.
