Biden Sides with Insurers, Shifting More Costs to Patients

By: Ranier Simons, ADAP Blog Guest Contributor

The high cost of healthcare is the product of a complex, fragmented financing system. The machinations of multiple public and private payors coupled with the advent of middlemen, such as pharmacy benefit managers, in the healthcare expenditure landscape often hinder the development of common sense solutions. This is especially true in the present discourse surrounding 340B Drug Pricing Program, Prescription Drug Affordability Boards (PDABs), and Alternative Funding Programs, which are all intertwined around 'controlling' prescription drug costs. At the center of the medical, fiscal maelstrom is the patient. Rising medical debt has a crushing impact on many aspects of patients’ lives and healthcare outcomes. Potential solutions come and go. Unfortunately, one remedy to alleviate patient costs recently failed. The Biden Administration fell short of instituting promised regulations surrounding patient protections against insurers abusing copay assistance programs.[1]

Photo Source: Lifepoint Health

The 2026 Notice of Benefit and Payment Parameters (NBPP) proposed rule was posted to the Federal Register on October 10th.[1] This rule addresses many things, including the operations of insurance plans. The executive summary states explicitly, “Our goal with these proposed requirements is providing quality, affordable coverage to consumers while minimizing administrative burden and ensuring program integrity. The changes proposed in this rule are also intended to help advance health equity, mitigate health disparities, and alleviate discrimination.”[1] However, the proposed rule lacks promised provisions that would have closed essential health benefits loopholes and shielded patients from adverse cost-sharing activities by insurers. In the NBPP, insurers won and patients lost.

This is a fight that many advocates felt had already been won, thanks to the combined efforts of the HIV+Hepatitis Policy Institute, Diabetes Leadership Council and the Diabetes Patient Advocacy Coalition. In September of 2023, a federal court struck down a previous federal rule issued under the Trump Administration that allowed insurance companies to use copay accumulators and maximizers, which allowed them to take advantage of manufacturer copay assistance programs to the detriment of patients.[2] This ruling meant that insurers had to follow previous 2020 federal guidelines that prohibited the usage of copay accumulator practices except with regard to brand name drugs that have generic equivalents if allowed by state law.[3]

The court remanded authority back to the U.S. Department of Health & Human Services (HHS), meaning the federal government needed to issue new regulations. The government previously in November 2023 stated in a brief that it would issue new rules directly addressing the prohibition of copay accumulator practices.[4] Yet, it has not, and the 2026 NBPP does not do that. As of January 2024, 19 states have passed legislation that bans or restricts accumulators in individual or small-group health plans.[5] That leaves patients in many states unprotected without federal regulation that explicitly bans copay accumulator practices. Without protection, patients are still victim to insurers using copay accumulators, maximizers, and even alternative funding programs.

The 2026 NBPP also does not include a provision to close an essential health benefits loophole insurers, and PBMs are taking advantage of it. Essential health benefits (EHB) are categories of services the Affordable Care Act (ACA) states insurance plans must cover.[6] One of those categories is prescription drugs. The ACA provides cost-sharing limits on EHBs. What is happening is that PBMs are investigating which drugs have high-cost thresholds or those for which manufacturer copay assistance programs are available. They subsequently identify those drugs as ‘non-essential health benefit’ drugs, removing their shield of protection. That designation enables them to siphon all of the manufacturer copay assistance funds to themselves without applying it to patients' deductibles and other cost-sharing. A 2025 NBPP rule closed this loophole for individual and small group markets but is still open for large group and self-funded plans. The 2026 NBPP does not bring the federal government’s promise to close the loophole to fruition.

Photo Source: Chronic Disease Coalition

Copay accumulators, maximizers, and alternative funding programs increase patients’ financial burden while lowering costs and increasing profits for insurance plan sponsors and other vendors. Copay accumulators accept manufacturer copay assistance funds up to the limits of patients’ insurance deductibles while not counting it towards patients’ out-of-pocket contributions towards their deductible.[5] Adam J. Fein, Ph.D. with the Drug Channels Institute, summarized, "Benefit designs have been shifting drug costs to patients, some of whom are now responsible for a much greater share of their prescription costs. These out-of-pocket expenses can be quite high, especially for more expensive specialty drugs when patients face coinsurance amounts and payment in the deductible coverage phase."[5] Thus, patients still have to meet their out-of-pocket contributions even after they have already been met by the copay assistance program. The insurance plan is effectively being paid twice, known as ‘double dipping.’

Copay maximizers are more nefarious because they drain a disproportionate share of manufacturer assistance funding.[5] Here, the plans set a patient’s out-of-pocket obligation to match the maximum value of support the copay assistance program provides. Thus, even if a deductible is $5,000, a patient’s out-of-pocket obligation could be set to $20,000 if that was the maximum use case of a particular copay assistance program. Patients incur very low out-of-pocket costs, but funding that could be stretched to help more patients is drained into industry coffers.

Alternative funding programs are the newest development in violating patient protections. Here, plans eliminate coverage entirely for specialty or costly drugs, thus leaving patients with the plans effectively uninsured.[5] Then, the patients are made to apply for patient assistance programs, which pay the entire list price for the drug. Patients incur minimal costs. However, plan sponsors and other vendors are paid the entire list cost value, which reduces their plan expenses but is a significant and improper financial depletion of assistance funds.[5] Additionally, there are delays involved in patients applying for these programs, and some are denied. Delays and denials are unnecessary barriers to patient access to medication that should be essential health benefits.

Photo Source: First Federal Credit Control

Since the EHB loophole remains open for large group and self-funded plans, masses of patients are left unprotected. It is not enough for the federal government to acknowledge a problem. Effective remedy requires acknowledgment of a problem, specific delineation of a solution, followed by enforcement of the solution. It is likely this loophole will only exacerbate the growing problem with medical debt.

Carl Schmid, executive director of the HIV + Hepatitis Policy Institute, encapsulates the situation perfectly, stating, “Every day these rules are delayed is another day that insurers and PBMs are pocketing billions of dollars meant for patients who are struggling to afford their drugs. Coming from an administration that prides itself on supporting patients and lowering their prescription drug costs, this is a huge disappointment. While they have gone on record that they will issue these rules, the clock is ticking, and there isn’t much time left.”[7]

[1] National Archives and Records Administration. (2024, October 10). Proposed Rule: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2026; and Basic Health Program. Retrieved from https://www.federalregister.gov/documents/2024/10/10/2024-23103/patient-protection-and-affordable-care-act-hhs-notice-of-benefit-and-payment-parameters-for-2026-and

[2] United States District Court. (2023, September 29). Memorandum Opinion. Retrieved from https://hivhep.org/wp-content/uploads/2023/09/HIV-Hepatitis-Policy-Institute-v.-HHS-DDC-opinion.pdf

[3] HIV+Hepatitis Policy Institute. (2023, October 2). Court Strikes Down HHS Rule that Allowed Insurers to Not Count Copay Assistance. Retrieved from https://hivhep.org/wp-content/uploads/2023/10/copay-accumulator-court-decision-press-release-10.2.23.pdf

[4] United States District Court. (2023, November 27). Defendant's Conditional Motion to Clarify Scope of Court's Order. Retrieved from https://hivhep.org/wp-content/uploads/2023/11/govt-clarification-request.pdf

[5] Fein, A. (2024, February 14). Copay Accumulator and Maximizer Update: Adoption Expands as Legal Barriers Grow. Retrieved from https://www.drugchannels.net/2024/02/copay-accumulator-and-maximizer-update.html

[6] HealthCare.Gov. (2024). Essential Health Benefits. Retrieved from https://www.healthcare.gov/glossary/essential-health-benefits/#:~:text=A%20set%20of%2010%20categories,offers%20when%20you%20compare%20plans

[7] HIV+Hepatitis Policy Institute. (2024, October 4). Biden-Harris Administration Sides with Insurers & Fails to Take Steps to Lower Patient Costs for Prescription Drugs. Retrieved from https://hivhep.org/press-releases/biden-harris-administration-sides-with-insurers-fails-to-take-steps-to-lower-patient-costs-for-prescription-drugs/

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.   

Are Nonprofit Hospitals' Community Benefit Tax Breaks Truly Serving Communities in Need?

By: Ranier Simons, ADAP Blog Guest Contributor

Nonprofit hospitals are supposed to be primarily focused on the communities they serve. They exist, in theory, to provide quality, equitable access to care for all, regardless of the ability to pay. The mission should be community service and improving the healthcare outcomes and well-being of their communities. Unlike for-profit hospitals, which concentrate on generating profits for private shareholders or owners, nonprofit hospitals are mandated to use their profits to invest in the community. Unfortunately, data shows that many nonprofit hospitals are not fiscally operating to properly benefit their communities despite the significant tax exemptions they are afforded, referred to as community benefits. In fact, some nonprofit hospital systems are exploiting their tax incentives and adding to patient and community medical debt. As such, many stakeholders and policymakers are increasingly scrutinizing nonprofit hospitals' tax-exempt status.

Photo Source: Third Way

Over half of the hospitals in the United State are designated by the Internal Revenue Service (IRS) as nonprofit.[1] According to the American Hospital Association (AHA), there are approximately 6,120 hospitals in the United States, with 2,987 of them categorized as nongovernment not-for-profit community hospitals.[2] The nonprofit designation means the entities are tax-exempt from most federal, state, and local taxes. A recent study conducted by researchers at Johns Hopkins Bloomberg School of Public Health, Johns Hopkins Carey Business School, and Texas Christian University found that in 2021, nonprofit hospitals received $37.1 billion in tax benefits.[3] Over the next decade, estimates indicate that the federal revenue lost from nonprofit tax breaks will be approximately $260 billion.[1] The significant tax deductions should spawn considerable community benefits. Nevertheless, the reality paints a different picture.

In turn, for the designation as a charitable non-hospital, these entities are required to use the funding generated from the tax breaks to provide for the needs of the patients served. This help is referred to as community benefit obligations. These obligations can be fulfilled with endeavors such as health education programs, community health improvement initiatives, charity care, and financial assistance programs.[1] Unfortunately, data shows that many nonprofit hospitals are not adequately fulfilling their community benefit requirements and, in some cases, operate like for-profit institutions. In some cases, they even fall short of the level of community benefit given by for-profit institutions. 

One of the most quantifiable and identifiable metrics of community benefit is charity care. Charity care is defined as providing free or significantly discounted medical care for patients who cannot afford it. Many patients who face medical affordability challenges are significantly impacted by emergency room or inpatient hospitalization expenses.[4] Both uninsured/underinsured and insured patients present a need for charity care. 

There is a growing chorus amongst stakeholders invested in improving public health calling for reforms to the lucrative 340B Drug Pricing Program, which was initially designed to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." According to a recent report by IQVIA, the 340B Program ballooned to $124B in 2023, yet another report found 85% of disproportionate share hospitals (DSH) earn more in 340B profit than they spend on charity care. The special interests fighting 340B reform claim clear guidelines already exist for community benefit requirements. 

The IRS first issued guidance for hospitals designated as 501(c)(3) nonprofit entities regarding the specific charity care requirement in 1956.[1] This was before Medicare and Medicaid when there was a dire need for a means to help those in need. It directly specified that nonprofit hospitals could not deny care to those who couldn’t pay if they wanted to maintain their nonprofit status. After the advent of Medicare and Medicaid, the IRS pivoted to the community benefits standard concept of required activity in 1969.[5] This broader definition is part of the present dilemma with qualifying the community help nonprofit hospitals provide.

Whether specifically charity care or community benefit, data shows that most nonprofit hospitals are not adequately utilizing their savings from tax-exempt status to reinvest in the community. According to a March 2024 policy brief issued by the nonpartisan Lown Institute, in 2021, “about 80% of [nonprofit] hospitals spent less on meaningful community investment compared to the value of their tax breaks.”[6] For charity care specifically, in 2018, Johns Hopkins University research data showed that overall, nonprofit hospitals provided charity care valued at only 2.3% of their total operating expenses compared to the valuation of their tax exemption, which was 4.3% of total operating expenses.[7] A 2023 United States Senate HELP Committee report indicated similarly trending 2021 data. The report examined 16 major nonprofit hospital chains, all of which had more than $3 billion in annual revenue. Twelve of the 16 allotted less than two percent of their total revenue to charity care, with six of those twelve allotting less than one percent.[8]

In contrast to most nonprofit hospitals with poor levels of tax break investment, the Lown Institute identified a few positive anomalies for the 2021 fiscal year. Data was taken from information on IRS Form 990. Ten hospitals and ten hospital systems were identified as having community investments that exceeded their tax breaks.[9] The analysis was based on metrics deemed to have a “direct and meaningful impact on community health.”[9] These metrics included financial assistance, community health improvement services, cash and in-kind contributions, community-building activities, and subsidized health services.[9] 

Lakeland (Fla.) Regional Medical Center and Summit Healthcare Regional Medical Center (Show Low, Ariz.) topped the hospital list with high community investment spending at $194 million and $159 million, respectively.[9] Hackensack Meridian Health (Edison, N.J.) and Nebraska Medicine (Omaha) topped the health system list at $358 million and $119 million, respectively.[9] It is unusual for nonprofit entities to have community investments that exceed their tax exemptions. Usually, for-profit entities would have more of an incentive to have high levels of charity expenditures as for-profit entities can write them off to lower their tax burden, unlike nonprofits.

Photo Source: Health Affairs

The actions of nonprofit hospitals that do not adequately satisfy their charity care and community benefit are damaging in multiple ways. Some of the bad actors have low levels of revenue spent on charity care yet aggressively pursue bills of patients who cannot afford their needed care. Nonprofit hospitals have sold patient debts to for-profit collection agencies, garnished wages, put liens on property, and even denied non-emergent care to low-income individuals with insurmountable medical debt.[10] This is in bad faith and not in the community's best interests when there is ample revenue from the tax-exemption profit that can and should be used for charity care. Data shows that many low-income patients who are victims of aggressive debt collection practices are eligible for free and discounted care. Despite the protections put in place by the Affordable Care Act (ACA), many nonprofit hospitals make it difficult for patients to find out they are eligible for charity care, in addition to making the process challenging to navigate.[8]

Some nonprofit hospitals operate more like for-profit entities, especially regarding acquisition. Nonprofit hospitals have merged, acquired for-profit hospitals and insurers, and even opened for-profit businesses in other countries.[11] Several nonprofit hospitals with low percentages of revenue spent on charity care also have high CEO compensation. For example, in 2021, Allina Health System in Minneapolis, Minnesota, paid its CEO a salary equal to 21% of the total charity care provided by the entire hospital system.[8] New York Presbyterian Hospital paid its CEO $10.9 million while only allotting $68.5 million in charity care when the total 2021 hospital system revenue was almost $10 billion.[8]

Reform is needed to ensure nonprofit hospitals operate in the manner for which they were intended. Reforms suggested by the Committee for a Responsible Federal Budget include transparency and refining reporting, clearly delineating what community benefit means, and setting minimum community benefit spending levels.[8] The form entities use to report their community benefit activities is IRS Form 990 Schedule H. That form needs to be revised to require nonprofit hospitals to give significantly more details of categories and amounts of community benefit spending.[8] Moreover, rules should be updated to require reporting at the facility level, not the health system parent organization level.[8]

Community benefit should be more explicitly defined. Currently, it is too nebulous and includes metrics that are hard to measure and do not necessarily provide direct community or patient benefit.[8] Things like physician education and Medicaid shortfall should no longer be considered. Most importantly, things like Medicaid shortfall expenditures are already offset by funding, such as disproportionate share hospital payments.[8]

Federally, Congress should consider setting minimum levels of community benefit spending. Some states have already instituted this. Texas, for example, has stringent state laws around nonprofit hospitals. If an entity is not designated as a Medicaid Disproportionate Share Hospital (DSH), it can fulfill the required charity care levels by: providing charity care and community benefit equaling at least five percent of the entity or system’s net patient revenue with four percent of that being charity care and government-sponsored indigent care, provide charity care that exceeds the amount of funding generated by tax-exempt status, or prove that charity care is being given at proportionate levels corresponding to the community needs and entity’s ability.[12]

Photo Source: NPR

As a part of the continuing examination of the burden of medical debt, this week, ADAP Advocacy launched an online survey to collect data on patient perspectives and experiences with medical debt. It is available nationwide for anyone in the United States to participate. It is also anonymous with the option of providing personal information if you wish to be contacted for additional follow-up.

The ADAP Advocacy-sponsored Ryan White Grantee 340B Patient Advisory Committee commissioned the study to support patient-centered reform. Many hospitals, as recipients of drug rebates under the 340B Drug Pricing Program, are notoriously bad actors. Data from the survey will add color to patients’ lived experiences with medical debt’s whole-person effect on their lives.

Medical debt continues to adversely affect patients' healthcare outcomes and cause stresses on other aspects of daily living. Nonprofit hospitals are supposed to operate in a manner that benefits anyone who needs care regardless of the financial means to pay for it; however, that is not the status quo. Reform is necessary since data shows many nonprofit hospitals are focused on generating profits instead of providing robust investment into their communities.

Senator Bernie Sanders succinctly described the dire situation when he expressed, “At a time when 85 million Americans are uninsured or underinsured, over 500,000 people go bankrupt because of medically-related debt, and over 60,000 Americans die each year because they cannot afford to go to a doctor when they need to, nonprofit hospitals should be providing more charity care to those who desperately need it, not less….And if they refuse to do so, they should lose their tax-exempt status.”

Read our related blog, In the United State, is Medical Debt is Truly Hospital Debt?

[1] Committee for a Responsible Federal Budget. (2024, June 12). The Federal Tax Benefits for Nonprofit Hospitals. Retrieved from https://www.crfb.org/papers/federal-tax-benefits-nonprofit-hospitals

[2] American Hospital Association. (2024, January). Fast facts on U.S. Hospitals. Retrieved from https://www.aha.org/statistics/fast-facts-us-hospitals

[3] Johns Hopkins Bloomberg School of Public Health. (2024, September 26). U.S. Nonprofit Hospitals Received More than $37 Billion in Total Tax Benefits in 2021. Retrieved from https://publichealth.jhu.edu/2024/us-nonprofit-hospitals-received-more-than-37-billion-in-total-tax-benefits-in-2021

[4] Levinson, Z., Hulver, S., Neuman, T. (2022, November 3). Hospital Charity Care: How It Works and Why It Matters. Retrieved from https://www.kff.org/health-costs/issue-brief/hospital-charity-care-how-it-works-and-why-it-matters/

[5] Bai, G., Letchuman, S., & Hyman, D. A. (2023). Do nonprofit hospitals deserve their tax exemption? New England Journal of Medicine, 389(3), 196–197. https://doi.org/10.1056/nejmp2303245

[6] Lown Institute. (2024, March). Hospital Community Benefit Spending: Improving transparency and accountability around standards for tax-exempt hospitals. Retrieved from https://lownhospitalsindex.org/wp-content/uploads/2024/03/lown-institute-fair-share-policy-brief-20240321.pdf

[7] Zare, H., Eisenberg, M. D., & Anderson, G. (2021). Comparing the value of community benefit and Tax‐Exemption in nonprofit hospitals. Health Services Research, 57(2), 270–284. https://doi.org/10.1111/1475-6773.13668

[8] United States Senate HELP Committee. (2023, October 10). Executive Charity Major Nonprofit Hospitals Take Advantage of Tax Breaks and Prioritize CEO Pay Over Helping Patients Afford Medical Care. Retrieved from https://www.sanders.senate.gov/wp-content/uploads/Executive-Charity-HELP-Committee-Majority-Staff-Report-Final.pdf

[9] Gooch, K. (2024, March 26). 20 hospitals, systems where charity care exceeds tax breaks. Retrieved from https://www.beckershospitalreview.com/finance/20-hospitals-systems-where-charity-care-exceeds-tax-breaks.html?oly_enc_id=8229J1560589D4S

[10] Thompson, I. (2023, September 5). Nonprofit Hospitals Pursue Aggressive Medical Debt Collection. Retrieved from https://nonprofitquarterly.org/nonprofit-hospitals-pursue-aggressive-medical-debt-collection/

[11] Rosenthal, E. (2024, July 22). Why many nonprofit (wink, wink) hospitals are rolling in money. Retrieved from https://www.washingtonpost.com/opinions/2024/07/22/nonprofit-hospital-health-care-industry/

[12] Texas Hospital Association. (2024, September). Charity Care and Community Benefit in Texas: Frequently Asked Questions. Retrieved from https://www.tha.org/wp-content/uploads/2024/09/Charity-care-FAQ-September-2024-FINAL.pdf

[13] Muoio, D. (2023, October 11). Sanders: Nonprofit hospitals 'should lose their tax-exempt status' if they 'refuse' to increase charity care. Retrieved from https://www.fiercehealthcare.com/providers/sen-sanders-nonprofit-hospitals-should-lose-their-tax-exempt-status-if-they-refuse

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.   

In the United State, is Medical Debt is Truly Hospital Debt?

By: Ranier Simons, ADAP Blog Guest Contributor

Medical debt continues to be a crippling financial burden to many Americans, with most of the debt being owed to hospitals in the United States. Approximately 100 million adults have medical debt ranging from $500 to over $5,000.[1] Despite changes credit reporting agencies made in 2022, 15 million Americans still have more than $49 billion in unpaid medical collections on their credit reports.[2] Medical debt is a financial hindrance to many aspects of people’s lives and can even result in poor healthcare outcomes and denial of care. The evolution of medical debt relief efforts continues to move forward on the federal and state levels in hopes of unsaddling Americans of debt that they had no choice in incurring.

Photo Source: Rhode Island Currant | Getty Images

In response to a 2022 report conducted by the Consumer Financial Protection Bureau (CFPB), three nationwide credit reporting bureaus - Equifax, Experian, and TransUnion – voluntarily made changes to reduce the number of reported medical bills in collections. They increased the time span that trigger reporting of medical bills in collections from 180 days to one year, stopped reporting and removed bills less than $500, and stopped reporting bills that were previously bad debt in collections but had been paid, thus resolved.[2] Despite these actions, 15 million Americans are still plagued with unpaid medical collections on their credit reporting.

In an attempt to further help Americans, CFPB proposed new rules in June 2024 that would be significant if finalized. The rules would eliminate the special medical debt exception, establish guardrails for credit reporting companies, and ban repossession of medical devices.[3] The CFPBs intent is “to end the senseless practice of weaponizing the credit reporting system to coerce patients into paying medical bills that they do not owe.”[3] These rules would help close existing loopholes that leave medical debt accessible to creditors. Additionally, since much of the collection activity reported is inaccurate, it would prevent predatory collections on false claims. Most of the people who have medical collections on their reports do not have any history of other types of credit problems.[4] It is unfair for creditors to block people from the things that they need when the CFPB found that a medical bill on a credit file is not a good indicator of the likelihood a person will repay a loan.[3]

The Urban Institute has done a great deal of work aggregating medical debt data. They created an interactive mapping tool, which shows the geography of debt in America and the debt differences that can reinforce the wealth gap between white communities and communities of color. Nationwide, roughly five percent of Americans have unpaid medical debt based on their credit reports.[5] However, the South and people of color carry a disproportionate amount of that debt. For example, in North Carolina, 8.5% of the population has medical debt in collections compared to 5% nationally. In terms of demographic distinction, 10.5% of communities of color in North Carolina have bad medical debt in contrast to 7.8% of white communities.[5]

Photo Source: Carolina Journal

Following the trajectory of other states, the administration of Governor Roy Cooper in North Carolina created a plan to alleviate medical debt in the state. With the federal government's support, Governor Cooper created the model for a plan that would link Medicaid expansion dollars to patient debt. Medicaid expansion provides billions in funding for hospitals through state-directed payments that states use to pay hospitals to care for low-income patients.[6] Governor Cooper created a plan that penalizes hospitals, reducing the Medicaid expansion funds they would receive if they do not agree to his debt-relief plan. 

Hospitals would have to expand financial aid criteria to allow more patients to qualify for aid to stave off a future of debt, in addition to eliminating old debts of low-income patients.[6] Eliminating debt would occur via debt buy-back in the manner non-profits such as Undue Medical Debt have succeeded.[6] In essence, bad debt is purchased at extreme discounts and then written off. By agreeing to the plan, hospitals would gain almost twice as much funding as they would if they did not. Atrium Health would receive roughly $1.7 billion by participating, compared to $900 million if they did not.[6] Atrium Health has been historically very aggressive with debt collection efforts against patients. In agreement with Cooper’s plan, Atrium Health announced it would nullify all existing judgments and liens against patients for unpaid bills, some going back as far as twenty years.[7]

Numerous reports have showcased how some large hospital systems have practiced aggressive collection and billing activity against vulnerable low-income patients in conflict with their fiduciary requirements to exercise charity care and institute patient financial assistance. Most of the medical debt is specifically hospital debt.[8] According to a report published by the Robert Wood Johnson Foundation, nearly 75% of adults with medical debt owe some or all of it to hospitals.

Photo Source: Urban Institute | RWJF

Brenda Miller with the Lown Institute previously argued in a blog, "Hospitals have the choice to offer robust financial assistance, set reasonable prices, not sue patients, and pay their fair share in community benefits if they are nonprofit. By adjusting their policies, hospitals have the power to alleviate the long-term financial suffering caused by our broken healthcare system."[9]

As a part of the continuing examination of the burden of medical debt, this week, ADAP Advocacy launched an online survey to collect data on patient perspectives and experiences with medical debt. It is available nationwide for anyone in the United States to participate. It is also anonymous with the option of providing personal information if you wish to be contacted for additional follow-up.

The ADAP Advocacy-sponsored Ryan White Grantee 340B Patient Advisory Committee commissioned the study to support patient-centered reform. Many hospitals, as recipients of drug rebates under the 340B Drug Pricing Program, are notoriously bad actors. Data from the survey will add color to patients’ lived experiences with medical debt’s whole-person effect on their lives.

Many types of consumer spending are voluntary. Most medical spending is not. When one’s health and well-being are threatened, potential financial ruin should not add stress to decisions nor influence them. Capitalism-driven financial toxicity has no place in healthcare. Hospitals should be institutions of optimal healing for all. As Jen Laws (he/him/his), CEO of Community Access National Network, points out, “...equity-minded persons and entities prioritizing impact over intent is a very real thing.”[10]

Read our related blog, Are Nonprofit Hospitals' Community Benefit Tax Breaks Truly Serving Communities in Need?

[1] Vankar, P. (2024, January 31). Medical debt in the U.S. - Statistics & Facts. Retrieved from https://www.statista.com/topics/8219/medical-debt-in-the-us/#topicOverview

[2] Consumer Financial Protection Bureau. (2024, April 29). CFPB Finds 15 Million Americans Have Medical Bills on Their Credit Reports. Retrieved from  https://www.consumerfinance.gov/about-us/newsroom/cfpb-finds-15-million-americans-have-medical-bills-on-their-credit-reports/

[3] Consumer Financial Protection Bureau. (2024, June 11). CFPB Proposes to Ban Medical Bills from Credit Reports. Retrieved from https://www.consumerfinance.gov/about-us/newsroom/cfpb-proposes-to-ban-medical-bills-from-credit-reports/

[4] Pollitz, K. (2015, Jan 8). Medical Debt Among Insured Consumers: The Role of Cost Sharing, Transparency, and Consumer Assistance. Retrieved from https://www.kff.org/health-costs/perspective/medical-debt-among-insured-consumers-the-role-of-cost-sharing-transparency-and-consumer-assistance/

[5] Urban Institute. (2024, July 10). The Changing Medical Debt Landscape in the United States. Retrieved from https://apps.urban.org/features/medical-debt-over-time/

[6] Levey, N., Alexander, A. (2024, September 23). How North Carolina Made Its Hospitals Do Something About Medical Debt. Retrieved from https://kffhealthnews.org/news/article/north-carolina-hospitals-medical-debt/?utm_campaign=KHN%3A%20First%20Edition&utm_medium=email&_hsenc=p2ANqtz-9_BieSj5YKhMJyyO8tuHpBuD1MMqvTUIH1qbLMpxBqXd2wLyVlWUhNZuMd1TjH99Epf8GJEgAie1fXAtiopyrJGRkkQg&_hsmi=325818163&utm_content=325818163&utm_source=hs_email

[7] Crouch, M., Ledger, C. (2024, September 20). Atrium Health cancels thousands of past medical debt judgments

[8] Karpman, Michal. (March 2023). MOST ADULTS W ITH PAST-DUE ME DICAL DE BT OWE MONEY TO HOSP ITAL. Robert Wood Johnson Foundation. Retrieved from https://www.rwjf.org/en/insights/our-research/2023/03/most-adults-with-past-due-medical-debt-owe-money-to-hospitals.html

[9] Miller, Brenda. (2023, March 28). Are Hospitals Driving Medical Debt? The Lown Institute. Retrieved from https://lowninstitute.org/are-hospitals-driving-medical-debt/

[10] Laws, J. (2023, June 19). The Necessity of Patient-Centered 340B Reform. Retrieved from https://www.hiv-hcv-watch.com/blog/june-19-23

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.   

Injectable PrEP a Game Changer for HIV Prevention, But is it Accessible?

By: Ranier Simons, ADAP Blog Guest Contributor

Benjamin Franklin is credited with the phrase ‘an ounce of prevention is worth a pound of cure.’ In other words, it is better to prevent something than to deal with the consequences or attempt to fix the damage after the fact. This sentiment can be applied to many aspects of the human condition, including public health, in general, and specifically HIV/AIDS. That is why developments in Pre-Exposure Prophylaxis (PrEP) are so valuable. Recently, researchers reported a new milestone in clinical trials involving the long-acting injectable antiretroviral lenacapavir as an option for PrEP. It could be a game-changer for HIV prevention, if potential patients can access it.

Photo Source: European AIDS Treatment Group

The FDA approved Gilead Science’s lenacapavir, under the brand name Sunlenca, in December 2022 as an HIV treatment for adults with limited treatment options because of things such as multi-drug resistance.[1] Sunlenca is administered as a twice-yearly injection that is given in conjunction with combinations of other HIV antiretrovirals. Gilead has continued developing additional utilizations of lenacapavir, with clinical trials exploring its efficacy as a pre-exposure prophylaxis option. This month, Gilead released interim results from one of those studies that are so promising it will begin to start seeking global regulatory approval towards the end of the year.[2]

The recent successful clinical trial results came from the Phase III PURPOSE 2 study. This study involved 2,180 subjects who were cisgender men, transgender men, transgender women, and gender non-binary individuals who have sex with partners assigned male at birth.[2] The study compared twice-yearly injections of lenacapavir to taking a once-daily Truvada pill. There were only two cases of HIV infection among the 2,180 subjects, meaning 99.9% of those in the lenacapavir arm did not acquire HIV. The comparative arm consisted of 1,087 people who take a daily Truvada pill. That group contained nine subjects who contracted HIV.[3] The study proved that twice-yearly lenacapavir performed better than the current standard form of PrEP in daily Truvada. Compared to Truvada, researchers reported that lenacapavir reduced the likelihood of contracting HIV by 96% as compared to no intervention.[3]

Photo Source: Amfar

These findings support lenacapavir’s effectiveness, as proven by Gilead’s Phase III PURPOSE 1 Study. The PURPOSE 1 clinical trial involved over 5,300 cisgender adolescent girls and young women ages 16-26 in South Africa and Uganda.[4] This trial also compared twice-yearly injected lenacapavir to daily oral Truvada (emitricitabine/ tenofovir disoproxil fumarate) or daily oral Descovy (emitricitabine/tenofovir alafenamide). The efficacy of lenacapavir was 100%, with none of those receiving lenacapavir contracting HIV. Conversely, 16 of the 1,068 women who took Truvada and 39 of the 2,136 women who received Descovy contracted HIV.[4]

Long-acting injectables for PrEP create a prevention option offering more ease of use than daily pills, thus increasing uptake and consistency.[5] Studies have shown that some people have adherence challenges regarding taking daily medication. For some, keeping up with a daily regimen is too psychologically or logistically taxing. For others, like some of the women in countries in Africa, having their medication discovered could pose personal safety issues. Moreover, various access challenges, including transportation, have an affect on successfully utilizing daily treatments for PrEP. A twice-yearly injection helps maintain privacy, reducing stigma, and requires less of a burden on the frequency of physical access to clinics. Moreover, it is easier to get patient buy-in on a twice-yearly injection compared to adherence to a daily treatment to prevent a disease they do not have.

Lenacapavir as PrEP would also be an injectable PrEP alternative to Apretude (cabotegravir). Presently, cabotegravir is an FDA-approved long-acting injectable for PrEP that is administered bi-monthly. However, in the two years since its approval in the U.S., there have only been about 11,000 prescriptions given compared to the roughly 382,000 annual users of oral PrEP.[6] That is only about 1.4% of PrEP users. Additionally, lenacapavir is administered subcutaneously in the abdominal area, unlike cabotegravir, which is a deep intra-muscular injection. A subcutaneous injection may be more appealing to some than a deep intra-muscular injection. Furthermore, a subcutaneous injection could mean easier access for administration since it requires less expertise than a deep intra-muscular injection.

Photo Source: Daily Caring

The innovation of long-acting injectable PrEP is lost if those who are most in need cannot access it. Thus, financial innovation needs to occur as well. Long-acting injectable PrEP will most likely cost significantly more than the current generic version of Truvada as daily PrEP in pill form, which can be obtained for about $20 a month.[3] Insurers will need to be convinced of the benefits of covering twice-yearly injectable lenacapavir. Most importantly, Medicaid, which provides care for over 40% of adults under the age of 65 living with HIV, will need to effectively cover long-acting injectable PrEP.[7] Data shows that PrEP uptake is lower among those on Medicaid compared to people with private insurance, with privately insured people initiating PrEP at a seven times higher rate.[7]

The O’Neill Institute for National and Global Health Law released a publication suggesting how Medicaid can ensure coverage for long-acting injectables. The two overarching ideas are that the federal government facilitates support for long-acting integration and states modify practices to effect widespread long-acting injectable access.[8] On the federal level, the institute suggests that the Centers for Medicare and Medicaid Services (CMS) issue guidance on Medicaid’s role in supporting PrEP uptake and update their 2016 Informational Bulletin on HIV Prevention and Care Delivery to include all currently available HIV therapies and services. Additionally, they point out there is no senior administrator in CMS with HIV expertise focused on coordinating HIV policy with Medicare and Medicaid regarding the National HIV/AIDS Strategy. Thus, they should appoint an official to handle that task.[8] On a state level, they suggest that states should examine their Medicaid managed care contract standards to ensure all covered HIV medications are available across all health plans.[8]

Ongoing inquiries provide data showing that patients have favorable inclinations toward long-acting injectables, especially once they become fully aware of what is available. One source of this data is a project executed by ADAP Advocacy entitled ‘HIV LONG-ACTING INJECTABLES: Patient Access Considerations for Injectable HIV Therapies & Injectable HIV Pre-Exposure Prophylaxis’. The project consisted of a quantitative survey, a qualitative focus group, and an analysis of data among those who were HIV-positive in terms of long-acting injectables for treatment and those who were HIV-negative regarding long-acting injectables for prevention.

The sample population focused on long-acting injectables for prevention included participants from 35 states, the District of Columbia and Puerto Rico.[9] Of these respondents, the majority reported that they would prefer provider or self-administered long-acting injectable PrEP as opposed to daily oral pills.[9] There was a mixture of awareness of the specific medication, Apretude. However, upon being made aware of it, those who were already aware and those newly aware were mostly open to learning more about using it or would strongly consider switching from a pill-based regimen.[9] A frequent concern was being unsure if they would be able to afford it or worried if their insurance would cover it.[9]

The PURPOSE 1 and 2 clinical trials and ongoing data indicate the promise of effective prevention that long-acting injectables can bring. Future results from PURPOSE 3, 4, and 5 will continue to strengthen proof of efficacy among even more diverse groups. It is imperative that education, policy, funding, and infrastructure be created and maintained to ensure access to those who are most in need of and desire to utilize not only long-acting injectable PrEP, but long-acting HIV treatment of all forms.

[1]  Mahobe, R. (2022, December 22). U.S. FDA approves Gilead's long-acting HIV drug Sunlenca. Retrieved from https://www.reuters.com/business/healthcare-pharmaceuticals/us-fda-approves-gileads-long-acting-hiv-drug-sunlenca-2022-12-22/#:~:text=By%20Raghav%20Mahobe,Licensing%20Rights%20%2C%20opens%20new%20tab 

[2] Manalac, T. (2024, September 13). Gilead touts 96% HIV risk reduction with twice-Yearly PrEP, eyes regulatory filings. Retrieved from https://www.biospace.com/drug-development/gilead-touts-96-hiv-risk-reduction-with-twice-yearly-prep-eyes-regulatory-filings

[3] Mundell, E. (2024, September 13). Twice-yearly injection cuts HIV risk by 96%, but will cost cut access? Retrieved from https://medicalxpress.com/news/2024-09-yearly-hiv-access.html#google_vignette

[4] Foster, Robin. (2024, June 24). Twice-a-year injection gives women full protection against HIV, trial finds. Retrieved from https://www.healthday.com/health-news/infectious-disease/twice-a-year-injection-gives-women-full-protection-against-hiv-trial-finds

[5] Edwards, G. G., Miyashita-Ochoa, A., Castillo, E. G., Goodman-Meza, D., Kalofonos, I., Landovitz, R. J., Leibowitz, A. A., Pulsipher, C., El Sayed, E., Shoptaw, S., Shover, C. L., Tabajonda, M., Yang, Y. S., & Harawa, N. T. (2023). Long-Acting Injectable Therapy for People with HIV: Looking Ahead with Lessons from Psychiatry and Addiction Medicine. AIDS and Behavior, 27(1), 10–24. https://doi.org/10.1007/s10461-022-03817-z

[6] Cairns, G. (2024, March 29). Why is the roll-out of injectable PrEP taking so long?. Retrieved from https://www.aidsmap.com/news/mar-2024/why-roll-out-injectable-prep-taking-so-long

[7] Wirth, D., Crowley, J. (2024, Sept 19). Medicaid must prepare to cover twice-yearly HIV prevention injection. Retrieved from https://www.statnews.com/2024/09/19/medicaid-prep-long-lasting-twice-yearly-prep-hiv-injection-cms/

[8] O'Neill Institute. (2024, July). Medicaid Leadership Must Ensure Access to Longer-Acting HIV Products. Retrieved from https://oneill.law.georgetown.edu/wp-content/uploads/2024/07/ONL_BIIB_Medicaid_Leadership_P5.pdf

[9] ADAP Advocacy. (2024, June). Patient access considerations for  Injectable HIV Therapies  & Injectable HIV Pre-exposure prophylaxis. Retrieved from https://www.adapadvocacy.org/pdf-docs/2024_ADAP_Project_Long_Acting_Injectables_Final_Report_06-25-24.pdf

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.   

HRSA Issues Numerous Guidance Letters Offering Patient Assistance

By: Ranier Simons, ADAP Blog Guest Contributor

The clients who qualify for and receive assistance through the Ryan White HIV/AIDS Program (RWHAP) are often representative of vulnerable populations. Providing a comprehensive means of providing HIV medications, healthcare, and related-services requires a whole-person approach. As such, Health Resources & Services Administration (HRSA) continues to evaluate and update its RWHAP endeavors to meet client needs. Systematic barriers exist that all to often challenge RWHAP clients’ ability to receive appropriate and consistent care. Recently, HRSA issued numerous guidance letters addressing those barriers.

HRSA has created patient assistance initiatives to enable a more seamless delivery service system aimed at addressing various socio-economic and systemic structural needs. Two of the program letters HRSA released in June 2024 address services for people living with HIV/AIDS (PLWHA) who have been involved in the criminal justice system, and those who are affected by housing insecurity.

PLWHA, who have been involved with the criminal justice system face barriers to access to care, among many other things. A person having legal involvement is defined as anyone who is engaged at any point along the continuum of the legal system as a defendant, including arrest, incarceration, and community supervision.[1] The HRSA HIV/AIDS Bureau (HAB) released guidance emphasizing how RWHAP funds may be used to support this demographic. RWHAP funds can be used to assist PLWHA who have been incarcerated or who are incarcerated and have an expectation of eligibility for RWHAP services upon release.[1] One effective means of support is assistance with the expungement of criminal records.

Photo Source: ADAP Advocacy | iStock Images

A criminal history is an obstacle to a person obtaining employment, housing, and education and subsequently affects access to healthcare. Expungement of criminal records improves the chances of successful reintegration into the community, reduces stigma, and protects privacy.[2] HRSA recognizes the importance of decreasing disparities to improve health outcomes for PLWHA. The expungement of criminal records facilitates obtaining gainful employment and securing housing, both of which translate into improving healthcare access. HRSA’s guidance informs providers that according to HRSA/HAB Policy Clarification Notice (PCN) #18-02, using RWHAP funds to help pay for expungement falls under the purview of allowable legal services because it is a matter “related to or arising from [an individual’s] HIV.”[1] Stipulations require any RWHAP recipients offering expungement services to research local laws, partner with legal counsel to create policies to determine how the services will be enacted, and ensure they are available to all eligible clients who seek help.[1]

In a related vein, in April 2024, HRSA announced new funding to support healthcare services for people transitioning out of incarceration. It earmarked $51 million to create funding opportunities for HRSA-funded health centers to develop innovative ways to give healthcare services to people in the 90-day period before their incarceration release.[3] Many people who are incarcerated have mental health conditions, substance abuse challenges, and chronic disease conditions such as HIV. The funding will enable HRSA-funded centers to provide care that ensures the continuity of medical services. This population needs case management services to help navigate things such as reinstating insurance eligibility, continuing access to medications and mental health counseling, reducing drug overdose risk, and even addressing housing and food insecurity.[3]

Regarding housing assistance, HRSA also released guidance educating providers, Policy Clarification Notice (PCN) #16-02, on an additional pathway RWHAP funds can be used to assist with housing instability. HRSA listened to clients who explained that statutory stipulations against using RWHAP funds to help pay housing security deposits for clients were a roadblock to helping them access stable and permanent housing.[4] As a result, HRSA/HAB issued guidance explaining that RWHAP funds can be used to pay for housing security deposits only if procedures are in place to ensure the security deposit is returned to the RWHAP service provider and not the RWHAP client.[4] It is not mandatory for RWHAP funds to be used for this purpose. Other funding sources, such as Ending the HIV Epidemic (EHE) funds, income generated from 340B program proceeds, and non-RWHAP grant awards, can also be used to help pay for housing security deposits.[4] This guidance is simply education on the existence of the option if needed.

HRSA has additional endeavors targeting the housing needs of PLWHA in the RWHAP. One of these is the SURE Housing initiative. SURE stands for Supporting Replication of Housing Interventions in the Ryan White HIV/AIDS Program. It is a program funded from 2022 through 2026 through HRSA’s RWHAP Part F Special Projects of National Significance Program.[5] Under this initiative, ten implementation sites are funded to create replicable effective interventions for rapid re-housing and housing stability for PLWHA who fall into one of three categories: those who have been involved with the legal system, those who identify as LGBTQ+, and young adults aged 18-24.[5]

With these guidance letters, HRSA/HAB has demonstrated its commitment to fostering an effective system, offering continuity of care and services for ADAP and RWHAP clients. HRSA continues to evaluate and modify current RWHAP offerings, communicate with recipients to investigate needs of new offerings, and examine how changing policy and legal landscapes affect funding rules and statutes. Housing instability and incarceration continue to complicate the lives of many PLWHA. It is imperative that government funding continues and scales with changing needs to ensure that no one falls through the cracks.

[1] HRSA HIV/AIDS Bureau. (2024, June 6). Ryan White Colleague Letter. Retrieved from https://ryanwhite.hrsa.gov/sites/default/files/ryanwhite/grants/hrsa-hab-expungement-program-letter.pdf

[2] Hamann, K., Riley, P., Bismuth, C. (2024, January 22).The evolving landscape of sealing and expungement statutes. Retrieved from https://www.americanbar.org/groups/criminal_justice/publications/criminal-justice-magazine/2024/winter/evolving-landscape-sealing-expungement-statutes/

[3] U.S. Department of Health and Human Services. (2024, April 10). Press Release: During Second Chance Month, HRSA Takes Policy Action, Releases First-Ever Funding Opportunity for Health Centers to Support Transitions in Care for People Leaving Incarceration. Retrieved from https://www.hhs.gov/about/news/2024/04/10/health-centers-to-support-transitions-in-care-for-people-leaving-incarceration.html

[4] HRSA HIV/AIDS Bureau. (2024, June 26). Ryan White Colleague Letter. Retrieved from https://ryanwhite.hrsa.gov/sites/default/files/ryanwhite/grants/hrsa-hab-security-deposit-program-letter.pdf

[5] Target HIV. (2024). SURE Housing Initiative. Retrieved from https://targethiv.org/spns/SUREHousing

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.  

Fireside Chat Retreat in New Haven, CT Tackles Pressing Public Health Issues

By: Brandon M. Macsata, CEO, ADAP Advocacy

ADAP Advocacy hosted its Health Fireside Chat retreat in New Haven, Connecticut among key stakeholder groups to discuss pertinent public health issues facing patients in the United States. The Health Fireside Chat convened Thursday, September 5th through Saturday, September 7th. An analysis of the negative impact pharmacy benefit managers (PBMs) are having on the nation's drug supply chain, how state prescription drug "affordability" boards (PDABs) are threatening to undermine the 'Ending the HIV Epidemic' initiative, and the explosive growth in executive compensation among Covered Entities participating in the 340B Drug Pricing Program were each evaluated and discussed by the 31 diverse stakeholders.

Photo Source: Getty Images

The Health Fireside Chat kicked-off with a stakeholders reception. The retreat also featured three moderated white-board style discussion sessions on the following issues:

• Ripple Effect: How PBMs and Counterfeit Drugs Threaten Patients — moderated by Shabbir Imber Safdar, Executive Director at Partnership for Safe Medicines (PSM) 
• Prescription Drug Affordability Boards: A Threat to Ending the HIV Epidemic — moderated Jen Laws, President & CEO at Community Access National Network (CANN)
• 340B Greed: Rising Revenues, Rising Executive Compensation, Rising Medical Debt...but Lower Charity Care — moderated by Brandon M. Macsata, CEO at ADAP Advocacy & Marcus J. Hopkins, Executive Director, Appalachian Learning Initiative (APPLI)

The discussion sessions were designed to capture key observations, suggestions, and thoughts about how best to address the challenges being discussed at the Health Fireside Chat. The following represents the attendees:

• Tez Anderson, Executive Director, Let's Kick ASS (AIDS Survivor Syndrome)
• Guy Anthony, President & Founder, Black, Gifted & Whole Foundation
• Ninya Bostic, National Policy and Advocacy Director, IDV, Johnson & Johnson
• Erin Bradshaw, EVP, Advancement of Patient Services & Navigation, Patient Advocate Fndn.
• Caleb Brown, Patient Advocate, and Research Associate, Yale University 
• De’Shea Coney, Vaccine Access and Equity Coordinator, Iowa Department of Health
• Brady Etzkorn-Morris, Patient Advocate
• Earl Fowlkes, President & CEO, Center for Black Equity — unable to attend
• Vanessa Gannon, Head, Issue Advocacy, Genentech — unable to attend
• Alexander Garbera, Member, New Haven Mayor’s Task Force on AIDS, City of New Haven, CT
• Dusty Garner, Patient Advocate
• Kelsey Haddow, Patient Engagement, Rare Access Action Project (RAAP) 
• Marcus J. Hopkins, Founder & Executive Director, Appalachian Learning Initiative
• Lisa Johnson-Lett, Peer Support Specialist, AIDS Alabama
• Ben Kelly, Senior Vice President of Pharmacy Management, Maxor National Pharmacy Services — unable to attend
• Jax Kelly, President, Let's Kick ASS (AIDS Survivor Syndrome) Palm Springs
• Karen King, Harm Reduction Specialist
• Kamaria Laffrey, Co-Executive Director, The SERO Project
• Jen Laws, President & CEO, Community Access National Network
• Kevin Lish, Patient Advocate, and Finance Director, SERO Project
• Brandon M. Macsata, CEO, ADAP Advocacy
• Judith Montenegro, Program Director, Latino Commission on AIDS
• Steve Novis, Director, Community Alliances & Government Relations, ViiV Healthcare
• Warren O'Meara-Dates, Founder & CEO, The 6:52 Project Foundation — unable to attend
• David Pable, Patient Advocate
• Kalvin Pugh, Patient Advocate
• Shabbir Imber Safdar, Executive Director, Partnership for Safe Medicines
• Dmitri Siegel, Alliance Development Director, Bristol-Myers Squibb
• Ranier Simons, Policy Consultant, Community Access National Network
• Jonathan Sosa, Patient Advocate
• Robert Suttle, Patient Advocate
• Nicole Tomassetti, Government Affairs Associate, Capitol Strategies Group
• Jeremy Toney, Patient Advocate, and Research Coordinator, Henry Ford Health
• Denise Tucker, Executive Director, State Policy, Merck
• Olivier Viel, Associate Director, Policy & Government Affairs, Merck

ADAP Advocacy is pleased to share the following brief recap of the Health Fireside Chat.

Pharmacy Benefit Managers:

The first policy session was Ripple Effect: How PBMs and Counterfeit Drugs Threaten Patients, which was led by the Partnership for Safe Medicine's (PSM) Executive Director, Shabbir Imber Safdar. PSM is committed to the safety of prescription drugs and protecting consumers against counterfeit, substandard or otherwise unsafe medicines. Shabbir shared some general background on PBMs, and what they have to do with the cost of medicines. In doing so, Shabbir also dissected the role PBMs play in the cost a pharmacy pays for and gets reimbursed for medicine they dispense you? Using several attendees as props, attendees witnessed how pharmacies often lose money on filling high-cost prescriptions, as well as how patients unknowingly put other patients at risk by selling their prescriptions to criminal counterfeiter rings pretending to be "Buyers Clubs" trying to help patients. The discussion also did a deep dive on online pharmacy-only marketplaces, and how these criminal rings get these diverted and counterfeit medicine.

Earlier this year, PSM published a report unveiling how criminal entities exploit vulnerabilities in the supply chain, made worse by PBMs, whose reimbursement policies often leave pharmacies on the edge of financial viability. According to that report, "Over the past decade, PBMs have been cutting the reimbursements pharmacies receive for the medicine they dispense to insured patients into smaller and smaller amounts. In many places, those reimbursements don’t fully cover the acquisition cost of medicine. Pharmacies now routinely dispense medication that they lose money on."

The discussion also largely centered around how the problem is being exacerbated by these criminal rings are using dating apps, such as Grindr, to targeted unsuspecting patients. Earlier this year, ADAP Advocacy, in collaboration with PSM, issued an important safety alert warning Grindr's users to stop selling their HIV and other medications on the popular gay dating App. Medicine buyback schemes falsely claim to be "Buyers Clubs" making medicine available to people who cannot afford them. In reality criminals buy medicine, and sometimes empty bottles, from patients and sell them at a discount to unsuspecting pharmacies who dispense it to patient victims. The safety alert urged Grindr's users to be more mindful of patient safety.

The following materials were shared with retreat attendees:

• To understand the PBM problem, read: "Are below cost reimbursement practices by Pharmacy Benefit Managers creating opportunity for criminals to enter the legitimate supply chain?" (PSM article, handout, and video)
• To understand why pharmacists are looking for bargains, read the story of pharmacist Jackie Weaver in: "Drugmaker Gilead Alleges Counterfeiting Ring Sold Its HIV Drugs" (WSJ)
• To understand how criminals operate in this space, watch: "Fraud in a bottle: How Big Pharma takes on criminals who make millions off counterfeit drugs" (CNBC)
• To see a recent example of this ongoing problem, read: "Gilead Sciences alleges dangerous drug-counterfeiting operation at two NYC pharmacies in lawsuit"

Prosecutions (DOJ) and other resources:

• "Leader of Black-Market HIV Medication Fraud Scheme Pleads Guilty"
• "United States v. Lazaro Hernandez"
• "Man Sentenced for Illegally Distribution Over $16M of Adulterated HIV Medication"
• "Safe Chain owners indicted for counterfeit drug scheme"
• "Safe Chain Settles Unsafe Med Case" (PSM Video)

ADAP Advocacy would like to publicly acknowledge and thank Shabbir for facilitating this important discussion.

PDABs:

The discussion, Prescription Drug Affordability Boards: A Threat to Ending the HIV Epidemic, was led by the Community Access National Network's (CANN) President & CEO Jen Laws. CANN focuses on public policy issues relating to HIV/AIDS and viral hepatitis. Previously characterizing PDABs as "price control wolves in sheep's clothing", Jen once again stressed the potential dangers behind these entities making potentially life and death decisions without having all of the facts and real-world implications of how those decisions could adversely impact patient care. Aside from cancer drugs, antiretroviral therapies for HIV are disproportionally being targeted by PDABs in numerous states. The mechanism being eyed by these boards to "control" drug costs is what is known as the Upper Payment Limit (UPL), which is the maximum reimbursement rate above which purchasers throughout the state may not pay for prescription drug products.

Photo Source: CANN

Earlier this year, CANN untangled the warnings and concerns regarding PDABs. On the surface, they are presented as a simple solution to a complex issue. As further background, Jen pointed to an analysis done by CANN's State Policy Consultant, Ranier Simons, in which he summarized: "The complex problem is the extremely high healthcare expenditure in the United States. Accessing modern healthcare results in high amounts of spending from costs associated with hospitals and other facilities, medical technology creation and utilization, and even prescription drugs. Although prescription drug expenditures are only a small part of the billions spent annually on healthcare, the price of prescriptions is the low-hanging fruit that PDABs aim to attack. The money patients pay for prescription drugs is assuredly a financial burden for many. However, while PDABs aim to expressly lower the direct cost of prescription drugs for patients, their trajectory does not achieve that goal. Their actions have the potential to cause access issues in addition to potentially increasing out-of-pocket costs to consumers. This is especially true since the primary means PDABs lean toward to lower costs is the upper payment limit. Moreover, while CANN has a focus on PDAB potential outcomes regarding HIV drugs, all drugs are of concern, given that people living with HIV (PLWH) have multiple co-morbidities. Any threat to any drug utilized by vulnerable chronic disease communities is a threat to all."  

Jen walked attendees through how 340B rebates, often the lifeline for smaller, community-based providers, could be drastically reduced as a result of the "affordability determinations" being made by PDABs. He noted how CANN has routinely pushed back against the fast-paced approach in some states to rush into making affordability determinations, including submitting testimony to the PDABs in both Colorado and Maryland. Jen outlined why UPL adjustments won’t address patient access or affordability, nor will is save patients a dime. He demonstrated his point with a fictitious provider and the 340B rebates it would receive under current law, as compared to the amount after UPL adjustments. Most providers would be forced to cut services, layoff staff, and potentially cease operations.

The following materials were shared with retreat attendees: 

• NASHP Model State Legislation
• CANN PDABs Action Center
• Health Plans Predict: Implementing Upper Payment Limits May Alter Formularies And Benefit Design But Won’t Reduce Patient Costs
• NMQF Webinar: State Prescription Drug Affordability Boards & Health Equity
• NMQF: 340B As a Health Equity Tool 
• Ripple Effect: How PBMs and Counterfeit Drugs Threaten Patients
• Prescription drug affordability boards do more harm than good

ADAP Advocacy would like to publicly acknowledge and thank Jen for facilitating this important discussion.

340B:

Marcus J. Hopkins, Founder & Executive Director, Appalachian Learning Initiative, concluded the retreat with a discussion focused on the 340B Drug Pricing Program and its potential impacts on the annual revenues and executive compensation amounts at Covered Entities that are eligible to receive rebates from the program, as well as the provision of charity care at cost by hospital entities who qualify. There has been an exponential increase in the number of Covered Entities from 1992 to 2021, increasing from just ~1,000 entities in 1992 to over 50,000 in 2021 (increasing from 12,700 in 2020 as a result of relaxed standards and enforcement due to the COVID-19 pandemic), which Jen Laws, President & CEO of the Community Access National Network, explained, along with additional insights from other attendees with professional knowledge of the program, that the first major increase that occurred in 2010 happened because the Health Resources Services Administration (HRSA)—the federal agency in charge of administering the program—lifted the cap on the number of contract pharmacies with which covered entities could provide medications. This decision essentially allowed organizations that did not have an on-site pharmacy to contract with external pharmacies to provide their services either at another in-person location or via mail delivery, which was becoming a more popular way to provide medications in the late-2000s and early-2010s.

The discussion brought attention to many of the barriers encountered when attempting to access information about 340B revenues from Covered Entities other than those that qualified as an AIDS Drug Assistance Program (ADAP) entity, including (but not limited to):

• The total lack of transparency required by HRSA for non-ADAP covered entities to disclose the amount of revenues received from the program or how those revenues are utilized;
• The numerous methods through which hospitals are able to legally create multiple other legal entities to shift funds, profits, and losses away from the primary hospital, and;
• The ability of hospitals to purchase other hospitals and private practices and counting those purchases as both revenues increases and losses on separate line items in the federal and state tax filings.

This brought up the issue of vertical integration—the practice of a company purchasing and controlling different stages within a chain of goods or services. For example, large hospital systems across the United States have spent much of the last two decades purchasing regional hospitals, local private practices, and private pharmacies, essentially making themselves the largest single employers in many states. This benefits the hospital system by increasing their revenues through ensuring that they are essentially the only providers of healthcare services and medications in a region. This allows them to absorb the 340B revenues from many of these entities, as each entity they purchase (known as "child sites") then fall under their 340B eligibility. Major hospital systems, such as Bon Secours Mercy Health based in Virginia, have been accused of using 340B revenues (which are supposed to be utilized to increase the availability and affordability of care for lower-income patients) to open new locations in more affluent areas in order to decrease the amount of uncompensated care and increase the amount of paid services, further driving up annual revenues.

Questions centered around how ADAP Advocacy (and CANN) can better elucidate abuses in the 340B program by hospital entities and mega service providers, but also highlighting good faith actors—Covered Entities who are using the program as it was intended to be used—in order to better compare and contrast the difference between Covered Entities.

The following materials were shared with retreat attendees:

• The 340B Drug Pricing Program and its Potential Impacts on Annual Revenues, Executive Compensation, and Charity Care Provision in Eligible Covered Entities
• For 340B hospitals, financial strength does not translate into charity care
• Reforming 340B to serve the interests of patients, not institutions
• What Should a Compliance Officer Do About 340B These Days? Journal of Health Care Compliance
• Public hospitals may use the 340B program differently than nonprofit hospitals
• Access to the 340B Drug Pricing Program: is there evidence of strategic hospital behavior?
• US hospital service availability and new 340B program participation

ADAP Advocacy would like to publicly acknowledge and thank Marcus for facilitating this important discussion.

Additional Fireside Chats are planned for 2024 in New York City (December).

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.