Although we're all aware of the big SCOTUS place that took place last week, I wanted to highlight a bunch of different healthcare-specific cases that have pretty interesting implications within their various sub-industries.
Abortion
The Case: Mississippi wrote a law criminalizing abortion after 15 weeks in direct contradiction to the legal precedent set by Roe. Jackson Women's Health sued the state as a result.
The Decision: SCOTUS overturns Roe v. Wade, ending the constitutional right to abortion and leaving the decision up to the states in lieu of federal codified law.
Madden's Musing: I'll be covering this - along with all of the implications for women, businesses, clinicians, and more, on Thursday.
PBMs
The Case: If a PBM has the ability to lower drug prices, does it have a fiduciary duty under ERISA to do so? (Keep in mind that PBMs benefit from higher drug prices by scraping a piece of the drug price for their own benefit in the form of a rebate)
The Decision: SCOTUS decided NOT to take up a lawsuit related to whether PBMs had a fiduciary duty to provide lower drug prices under the Employee Retirement Income Security Act (ERISA).
Madden's Musing: "Your silence is deafening" - me to SCOTUS on PBMs. PBMs exist in this insane space where everyone knows they suck, yet they're untouchable. Plz, FTC, do something.
340B - Outpatient Drug Program
The Case: The 340B program allows certain eligible and critical access hospitals access to outpatient drugs at favorable rates they can make a decent amount of $$ on. Big Pharma hates it, hospitals love it, Feds are trying to fix it. Previously, HHS changed the reimbursement formula for hospitals from cost-plus-6% to average sales price-less 22.5%. Hospitals argued that HHS broke statutes when doing so, saying that certain protocol needed to be followed first.
The Decision: On the 15th, SCOTUS decided that HHS broke the law when it changed the payment formula for hospitals to get reimbursed on drugs from cost-plus-6% to average sales price-less 22.5%. SCOTUS said that in order for HHS to have authority to make that change, the regulatory body would first have to conduct a drug cost survey at the targeted hospitals.
Madden's Musing: I covered this last week but wanted to include it along with the other court decisions. The 340B Program now accounts for 15% of all pharmaceutical sales in what will continue to be a hot battleground between hospitals, big pharma, and the government.
Disproportionate Share Payments
The Case: Disproportionate share payments are extra payments that CMS makes to hospitals that serve a 'disproportionate share' (ha, get it?) of low-income patients. I'll spare you the highly fascinating details, but the hospital in this case was arguing that HHS was underpaying their DSH payments
The Decision: SCOTUS decided that HHS' DSH payments were ultimately consistent with the written statute and adequately accounted for the hospital's entire low-income patient population.
Madden's Musing: Not gonna lie, this case is highly confusing, and what's even more confusing is trying to understand what the heck is going on with hospital supplemental payments. Even the dang Supreme Court was confused about the statute's language if it gives you any indication as to why healthcare is sometimes really stupid when it comes to highly technical, nuanced subjects like DSH. Still, DSH revenue represents a significant chunk of change for hospitals and health systems.
Dialysis
The Case: centered on whether a health plan followed Medicare statute when it purposefully offered extremely low reimbursement rates for outpatient dialysis - AKA "Medicare shouldn't pay for a service that this health plan should cover." DaVita argued that the low rates effectively caused all providers to be out of network and alleged that the plan discriminated against chronic kidney disease patients
The Decision: SCOTUS decided that the plan didn't discriminate against ESRD patients since it cut rates for all plan members…wtf? As a result, a private health insurance plan can cut or limit dialysis coverage uniformly... DaVita
Madden's Musing: On the same week that CMS proposed a 3.1% lift to dialysis providers, DaVita dropped 11% after SCOTUS ruled against the dialysis maker. This ruling has implications beyond just dialysis. The precedent set here could trickle down to other benefits and services. At the end of the day, this decision does nothing good for chronic kidney disease patients across the country, a continual spurned group of individuals.
"It's not like anyone is dying in the emergency room waiting for coverage. Medicare will pay," said Jen Jordan, an attorney who specializes in Medicare Secondary Payer Act cases. "The only fear I would have is that plans may be more inclined to write more bare-bones benefits now that they know that the Supreme Court supports such an outcome."
Sick!!
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