January 15, 2012
from Communities.WashingtonTimes Website
While Big pharmaceutical companies stand to win
Obamacare, this only holds true if the economy improves and local
Accountable Care Organizations (ACOs) allow brand prescription drugs to
remain on formulary (a formulary is an approved list of medications that
physicians can prescribe for their patients under a given insurance/managed
Meanwhile, local physician board members and
medical society leaders stand to profit off of their colleagues’ misery as
they position themselves at the center of ACO ‘medical homes’.
Big Pharma is concerned that legislation must address the issue of neutrality and fairness since (unlike their own corporate ‘drug reps’) the government detailers will not be regulated to insure the accuracy of their information.
In 2009, Senator Kohl introduced The Independent Drug Education and Outreach Act to put limits on what detailing programs can receive grant money and what educational materials can be disseminated by these federally-promoted detailers.
This legislation never advanced to law. The idea
is that the same rules that govern accuracy and other such activity for the
pharmaceutical industry should be universally applied to government
detailers as well.
After all, if Obamacare were to derail the economy, and local ‘mini-HMOs’ called ACOs took hold, there would be less money for new, expensive (and often superior) brand medications as more emphasis would be placed on generic medicines.
The drug industry is now counting on the influx
of tens of millions of additional prescription recipients to offset any
potential losses incurred in the push for a more ‘nationalized’/socialized
medical drug delivery system (i.e., one that would push cheaper generics
over brand name drugs).
All of this played well with the statistics
offered to the public to show that Obamacare was indeed a cost-cutter,
because one only had to look to see that patients were paying less for their
drugs overall. Of course, this was a shell game, but it played well on some
left-leaning media venues.
Thus, federal expenditures on Medicaid grew by
Sometimes called ‘coding for dollars’, Medicare
payment schedules and Medical Advantage contracts with physicians
can be very complicated and confusing.
Here is Medicare's April 2011 Medicare Advantage report that determines rates for 2012.
This will entail having an ethics panel review which patients can have certain surgeries, and have certain plan managers decide if payments to providers should be withheld for ‘inadequate’ or ‘poor’ care; it will also involve deciding how much certain specialty doctors will be paid compared to others in an attempt to save the federal government money (compared to historical, actuarial data).
If the local ACO/’medical home’ is effective at
saving money for a given patient/disease state, it will receive bonuses from
Uncle Sam; if not, it will get less money.
HMOs/IPAs/ACOs may earn more money (i.e., ‘double down’) by having a higher Risk Adjustment Formula (RAF) number.
This number depends on ICD codes and other
factors like age. (e.g., 90 year olds are more frail than 70 year olds, and
diabetic patients with dementia cost more to take care of than non-diabetic,
non-demented patients, etc.).
The SGR (Sustainable Growth Rate) formula for paying doctors for Medicare services is set for a 27.4% cut in 6 weeks if Congress cannot come up with either a semi-permanent ‘fix’ or, as they have done for years, simply apply another 2-6 month deferment on the rate decreases.
Despite the often misquoted ‘rewards’ for
physicians for the utilization of certain performance criteria,
e-prescriptions and the like, doctors will face progressive cuts in Medicare
pay (on top of the SGR cuts) starting in 2014 and beyond if they do not
comply with every onerous layer of new government mandates in practice
According to the Investor Business Daily poll of
September 2009, and several polls by other sources since, upwards of 45% of
physicians may stop seeing Medicare patients altogether or simply retire
If FFS cuts go through, MA plans like Secure
Horizons may still receive, for example, $400/month per capitated patient
life (plus additional dollars for creative coding for various severe disease
states) but then turn around and pay physicians 30% less based on the new
The profits for local and state medical society
leaders who may be involved in such schemes could be multiple times what
they would earn actually taking care of patients.
In the context of struggling community doctors,
who will be facing decreasing slices of this pie, this is particularly
disturbing. The added funds could be used to pad the pockets of the ACO/health
This fraud was widespread and committed over
1,000 times in one year at just one location.
Big Pharma made deals with the creators of Obamacare, and these deals may or may not end up being successful for the drug companies themselves.
Most notably, consumers could end up losing
because if needed new drugs cannot come to market due to restricted brand
drug availability in local ACO formularies, resulting in decreased revenues
and decreased research and development, then future breakthroughs and
patient care innovations may never come to fruition.
Since the American Medical Association
represents only a minority of community physician members, and has existing
conflicts of interest due to tens of millions of dollars annually in
federal-protected copyrights on medical billing codes, they were not an
honest broker in the ‘Act’s’ creation.
This may very well increase costs and waste by
allowing middlemen to control, profit and manipulate community medical care
for self-serving - not community-serving - purposes.