When the first Humira biosimilar — essentially a generic version — finally hit the market in January, it came with an unpleasant surprise. The biosimilar’s maker, Amgen, launched two versions of the drug, which treats a host of conditions including rheumatoid arthritis. They were identical in every way but this: One was priced at about $1,600 for a two-week supply, 55% off Humira’s list price. But the other was priced at around $3,300, only about 5% off. And OptumRx, one of three powerhouse brokers that determine which drugs Americans get, recommended option No. 2: the more expensive version.

As Murdo Gordon, an Amgen executive vice president, explained in an earnings call, the higher price enabled his company to give bigger rebates, or post-sale discounts, to Optum and other intermediaries. Most of that money would be passed on to insurers, and patients, he said. Gordon did not mention that the higher-priced option would leave some patients paying much more out-of-pocket, undermining the whole rationale for generic drugs.

The Optum-Amgen announcements perfectly elucidated why, after years of thundering against drugmakers, Congress and the administration have now focused on regulating the deal-makers known as pharmacy benefit managers, or PBMs. Sen. Bernie Sanders’ health committee grilled a panel of PBM and pharmaceutical executives Wednesday in preparation for a vote on PBM legislation, expected Thursday.

The three biggest PBMs — OptumRx, CVS Caremark, and Express Scripts — control about 80% of prescription drug sales in America and are the most profitable parts of the health conglomerates in which they’re nestled. CVS Health, the fourth-largest U.S. corporation by revenue on Fortune’s list, owns CVS Caremark and the insurer Aetna; UnitedHealth Group, a close fifth, owns Optum; and Cigna, ranking 12th, owns Express Scripts. While serving as middlemen among drugmakers, insurers, and pharmacies, the three corporations also own the highest-grossing specialty drug and mail-order pharmacies.

“John D. Rockefeller would be happy to be alive today,” said David Balto, a former Federal Trade Commission attorney who represents clients suing PBMs. “He could own a PBM and monopolize economic power in ways he never imagined.”

Drug manufacturers claim that exorbitant PBM demands for rebates force them to set high list prices to earn a profit. Independent pharmacists say PBMs are driving them out of business. Physicians blame them for unpredictable, clinically invalid prescribing decisions. And patients complain that PBMs’ choices drain their pocketbooks.

With PBMs driving prices, competition has had the opposite effect from what economic theory predicted Medicare patients would spend out-of-pocket on drugs, one large study showed. Over a five-year period, patients were paying 50% more for branded drugs that had competitors than for those that didn’t.

All this makes the PBMs ripe targets for politicians of both parties. Yet the complexity and obscurity of their role in the drug marketplace have skeptics wondering whether legislation advancing in the House and Senate will actually help patients or lower prices at the pharmacy counter.

“We may try to make things better and actually make things worse,” Sen. Rand Paul (R-Ky.) said at Wednesday’s hearing.

The PBMs pass along most of their rebates to health plans, which will bear a larger share of patient drug costs in coming years under Medicare changes that are part of the 2022 Inflation Reduction Act. It’s likely that pressure on insurers will be passed along to PBMs and result in even more aggressive limits on physician prescription decisions, said Troyen Brennan, an adjunct Harvard University professor who was chief medical officer for CVS Health from 2008 to 2022.

Several congressional bills target drug company rebates to PBMs and what’s known as “spread pricing” — the extra money PBMs collect from insurers over what they pay pharmacies for drugs.

But those aren’t the big PBM revenue sources anymore, Brennan said. PBMs today mostly make money by owning mail-order and specialty pharmacies and from the government’s 340B program, created to help hospitals that treat a disproportionately elderly and poor population. Medicare requires drugmakers to provide big discounts to participating hospitals and the growing rosters of affiliated physician groups they own, and some of those discounts end up with PBMs.

Employers and the federal government decide where most of the rebate money goes, PBM leaders testified Wednesday — and health plans decide what out-of-pocket costs their covered members will pay.

In other words, drug companies blame PBMs for high drug counter prices, PBMs blame insurers, and insurers blame the drug companies, all part of a health care system that hinges on an unspoken bargain: Make life comfortable for some — mostly the upper and middle classes — at the expense of lower-income and poorly insured people who get what they get.

 PBMs’ extraction of money from patients in the name of “copayments” at the pharmacy counter “reintroduces medical underwriting” that was stripped away by the Affordable Care Act, Craig Garthwaite, a health care researcher at Northwestern’s Kellogg School of Management, told a Senate panel last year. Insurers can no longer pick and choose whom to insure, as they could before the landmark 2010 health law. But they are finding ways to make the sickest pay.

“People with expensive conditions are paying more for insurance so healthy people can pay less,” he said.

PBMs Evolve From Minnows to Whales

In 1967, a year before the first PBM was founded, spending on prescription drugs outside of a hospital in the U.S. totaled around $3.3 billion, compared with more than $600 billion in net payments last year. By 2005, when Medicare expanded to include coverage of outpatient drugs, government and private insurers depended on PBMs’ negotiating power to keep rising drug prices in check.

The Federal Trade Commission and Justice Department allowed the largest PBMs to gobble up competitors and merge with insurers during the Bush and Obama administrations on the grounds that bolstering their powers might rein in prices. The FTC fought state investigations of anti-competitive behavior, saying that pressure on PBMs would benefit consumers.

The FTC under President Joe Biden has switched course, at least partly because of the arrival of Chair Lina Khan, a vigorous proponent of antitrust policy who launched an investigation of the PBMs last June.

It came partly at the request of independent pharmacists, who rely on PBM reimbursements for the drugs they purchase and provide consumers. Thousands of pharmacists complained to the FTC that PBMs force them to accept unfairly low reimbursements — then slam them with opaque rules requiring them to pay back some of the money months later. Pharmacists returned $12.6 billion to PBMs in 2021, according to a recent Medicare Payment Advisory Commission report.

During a recent week, said Ashley Seyfarth, who owns Kare Drug in Aztec, New Mexico, a PBM reclaimed money from one prescription because the paperwork was faxed. It clawed back cash from another sale because Kare had kept the drug on the shelf an extra day, beyond the PBM’s time limit, to accommodate a patient delayed getting to the store.

And her reimbursements are “beyond low,” Seyfarth said. She laughed when asked whether contract terms with the PBMs were negotiable. “You aren’t negotiating anything,” she said. “It’s take it or leave it.”

PBMs “have the right to audit whether contract terms are agreed to,” Angela Banks, vice president of policy at the Pharmaceutical Care Management Association, the PBM trade group, said at a recent conference. “A lot of the complaints about PBMs come from two parties from whom we are extracting money: manufacturers and pharmacists.”

PBM pricing decisions are often murky. According to a recent study, in 2018 Medicare spent $2.6 billion more through PBMs for a year’s worth of 184 generic drugs than they would have cost at Costco. Doctors and hospitals find PBM formularies baffling, with dozens of variations depending on a patient’s health plan.

When Philadelphia-area internist Amy Davis writes a prescription, she has no idea what the pharmacy will bill her patients, she said, or whether a PBM has decided the drug needs prior authorization. Sometimes she doesn’t find out until a patient returns months later saying they skipped the drug because it was too expensive.

“We physicians are completely in the dark,” she said. “And it’s designed that way.”

The PBMs’ growing use of proprietary pharmacies, including mail-order operations, can interfere with the care of patients like Jasmine St. Clair, a 45-year-old restaurant manager and mother of six in Mount Juliet, Tennessee.

In October 2021, St. Clair’s treatment for a rare, non-smoking-related lung cancer was delayed three weeks after PBM giant Express Scripts insisted her prescription be filled by Accredo, the mail-order pharmacy it owns.

In the meantime, her fatigue and lower-back and neck pain became so bad “I couldn’t pick up my daughter, who was 2,” St. Clair said. “And I was really getting scared.”

After St. Clair started the four-pills-twice-a-day regimen, her tumor rapidly shrank. But in January, her husband’s insurance changed and the medications didn’t arrive on time. When she called Accredo to see what was wrong, “they said, ‘You owe $8,000. Would you like to pay by card?’”

The pharmacy attached to her oncology practice straightened out the payment issue and ensured her continued use of the drug, St. Clair said. Her oncologist, Johnetta Blakely, said these are daily occurrences in her practice.

“The problem with the PBMs and the specialty pharmacies they own is that they are so complicated and intertwined it’s hard to figure out what the heck they are doing,” Blakely said. “All this bureaucratic stuff is a distraction and takes away from things I could be doing, like asking Jasmine about her kids.”

What’s the Remedy?

Bipartisan House and Senate bills would require PBMs to reimburse pharmacies serving Medicaid patients based on an authorized price list, rather than using standards that allegedly allow PBMs to lowball pharmacies. The Congressional Budget Office has estimated the bills would save the federal government $1 billion over 10 years. Another Senate bill would require PBMs to report more of their earnings to the FTC, and would ban deceptive and unfair fees.

But PBMs have shown themselves adept at finding ways around regulation. A federal rule scheduled to take effect next year would curtail PBM “clawbacks” on independent pharmacies. But PBM contracts sent out to pharmacies in recent weeks get around that by lowering reimbursement fees and putting a percentage of their payments to pharmacies into a kind of escrow, said Douglas Hoey, CEO of the National Community Pharmacists Association.

When the Trump administration considered banning brand-name drug rebates in 2017, PBMs set up companies in Ireland and Switzerland to take over the negotiations and purchases. Doing so offered a tax advantage and allowed the PBMs to avoid scrutiny of the quantity and nature of those deals. Recently, Express Scripts set up another company to purchase generic drugs, in the Cayman Islands.

And PBMs appear adept at moving money from one pocket to another. “Yesterday’s rebates are today’s fees and potentially tomorrow’s something else,” said John O’Brien, CEO of the pharmaceutical industry-funded research group, the National Pharmaceutical Council.

Every arrangement that PBMs make with manufacturers, employers, and insurers is secret and proprietary, said Barak Richman, a Duke University Law School professor. This makes it nearly impossible to examine what kind of deals PBMs are making.

Antitrust law could be brought to bear on the PBMs, Richman said. And the Biden administration has shown an eagerness to possibly reverse mergers that have increased PBM clout. The Justice Department has taken similar steps.

But federal officials will have to move fast to slow the PBMs. Insurers that don’t have PBMs as part of their business have been shrinking in recent years because of the growing clout and buying power of the companies.

“I predict that any health insurer that doesn’t have a PBM is going to disappear in 10 years,” said Neeraj Sood, a professor at the University of Southern California Sol Price School of Public Policy. “Otherwise, there is no way to compete with the big three.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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Julie Rovner is chief Washington correspondent and host of KFF Health News’ weekly health policy news podcast, “What the Health?” A noted expert on health policy issues, Julie is the author of the critically praised reference book “Health Care Politics and Policy A to Z,” now in its third edition.

If Congress fails to raise the nation’s debt ceiling in the next few months, the U.S. could default on its debt for the first time in history. Republicans in Congress, however, say they won’t agree to pay the nation’s bills unless Democrats and President Joe Biden agree to deep cuts to health and other programs. Among the proposals in a bill House Republicans passed April 26 is the imposition of new work requirements for adults who receive Medicaid.

Meanwhile, many of the states passing restrictions on abortion are also passing bills to restrict the ability of trans people to get health care. The two movements — both largely aimed at conservative evangelicals, a key GOP constituency — have much in common.

This week’s panelists are Julie Rovner of KFF Health News, Jessie Hellmann of CQ Roll Call, Shefali Luthra of The 19th, and Sarah Karlin-Smith of the Pink Sheet.

Panelists

Jessie Hellmann
CQ Roll Call

@jessiehellmann

Read Jessie's stories

Shefali Luthra
The 19th

@Shefalil

Read Shefali's stories

Sarah Karlin-Smith
Pink Sheet

@SarahKarlin

Read Sarah's stories

Among the takeaways from this week’s episode:

• The Republican-controlled House’s proposal to raise the debt ceiling contains enough politically poisonous measures that the plan is a non-starter in the Senate. They include substantial funding cuts to major federal health programs, including the FDA and the National Institutes of Health — cuts that would force the federal government to cut back on grants and other funding.
• The proposal would also impose work requirements on adults enrolled in Medicaid — which covers low-income and disabled Americans, as well as pregnant women — and in the Supplemental Nutrition Assistance Program, which helps needy families buy food. Under the plan, the government would save money by cutting the number of people helped. But most beneficiaries cannot work or already do so. Experience shows the change would mostly affect people who struggle to report their work hours through what can be complicated online portals.
• Multiple congressional committees have released plans to fight high drug costs, promoting efforts to explore how pharmacy benefit managers make decisions about cost and access, as well as to encourage access to cheaper, generic drugs on the market. And during congressional testimony this week, the administrator of the Centers for Medicare & Medicaid Services, Chiquita Brooks-LaSure, said the agency would no longer issue warnings to hospitals that fail to comply with a law that requires them to post their prices, but instead would move directly to fining the holdouts.
• Also in news about cost-cutting legislation, a plan to address an expensive glitch in Medicare payments to hospital outpatient centers and physician offices is gaining steam on Capitol Hill. Hospital consolidation has helped increase costs in the health care system, and lawmakers are eager to keep health spending under control. But the hospital industry is ramping up advertising to make sure lawmakers think twice before legislating.
• In abortion news, it will likely be at least a year before the Supreme Court rules on whether the abortion pill mifepristone should remain accessible. Some justices suggested in last summer’s Dobbs decision, which overturned abortion rights, that they would leave further abortion questions to the states, yet the nation is finding that overturning a half-century of legal precedent is messy, to say the least. Meanwhile, reporting and polling are revealing just how difficult it is for doctors in states with abortion bans to determine what constitutes a “medical emergency” worthy of intervention, with a grim consensus emerging that apparently means “when a woman is near death.”

Also this week, Rovner interviews Renuka Rayasam, who wrote the latest KFF Health News-NPR “Bill of the Month” feature, about a pregnant woman experiencing a dangerous complication who was asked to pay $15,000 upfront to see one of the few specialists who could help her. If you have an outrageous or exorbitant medical bill you want to share with us, you can do that here.

Plus, for “extra credit,” the panelists suggest health policy stories they read this week that they think you should read, too:

Julie Rovner: The Nation’s “The Poison Pill in the Mifepristone Lawsuit That Could Trigger a National Abortion Ban,” by Amy Littlefield.

Shefali Luthra: The Washington Post’s “The Conservative Campaign to Rewrite Child Labor Laws,” by Jacob Bogage and María Luisa Paúl.

Jessie Hellmann: Politico’s “Gun Violence Is Actually Worse in Red States. It’s Not Even Close,” by Colin Woodard.

Sarah Karlin-Smith: The Wall Street Journal’s “Weight-Loss Drugmakers Lobby for Medicare Coverage,” by Liz Essley Whyte.

Also mentioned in this week’s episode:

• In Oklahoma, a Woman Was Told to Wait Until She’s ‘Crashing’ for Abortion Care,” by Selena Simmons-Duffin.
• Anti-Trans Bills Have Doubled Since 2022. Our Map Shows Where States Stand,” by Annys Shin, N. Kirkpatrick, and Anne Branigin.

click to open the transcript

Transcript: Dancing Under the Debt Ceiling

KFF Health News’ ‘What the Health?’

Episode Title: Dancing Under the Debt Ceiling

Episode Number: 295

Published: April 27, 2023

[Editor’s note: This transcript, generated using transcription software, has been edited for style and clarity.]

Julie Rovner: Hello and welcome back to “What the Health?” I’m Julie Rovner, chief Washington correspondent at KFF Health News. And I’m joined by some of the best and smartest health reporters in Washington. We’re taping this week on Thursday, April 27, at 10 a.m. As always, news happens fast — really fast this week — and things might have changed by the time you hear this. So here we go. We are joined today via video conference by Jessie Hellmann of CQ Roll Call.

Jessie Hellmann: Good morning.

Rovner: Sarah Karlin-Smith, the Pink Sheet.

Sarah Karlin-Smith: Hi, everybody.

Rovner: And Shefali Luthra of The 19th.

Shefali Luthra: Hello.

Rovner: Later in this episode, we’ll have our KFF Health News-NPR “Bill of the Month” interview with Renuka Rayasam. This month’s patient had a happy ending medically, but a not-so-happy ending financially. But first, the news. We’re going to start this week with the budget and, to be specific, the nation’s debt ceiling, which will put the U.S. in default if it’s not raised sometime in the next several weeks, not to panic anyone. House Republicans, who have maintained all along that they won’t allow the debt ceiling to be raised unless they get spending cuts in return, managed to pass — barely — a bill that would raise the debt ceiling enough to get to roughly the middle of next year. It has no chance in the Senate, but it’s now the Republicans’ official negotiating position, so we should talk about what’s in it. It starts with a giant cut to discretionary spending programs. In health care that includes things like the National Institutes of Health, most public health programs, and the parts of the FDA that aren’t funded by user fees. I mean, these are big cuts, yes?

Hellmann: Yeah, it’s about a 14% cut to some of these programs. It’s kind of hard to know exactly what that would mean. But yeah, it’s a big cut and there would have to be, like, a lot of changes made, especially to a lot of health care programs, because that’s where a lot of spending happens.

Rovner: Yeah, I mean, sometimes they’ll agree on cuts and it’ll be like a 1% across the board, which itself can be a lot of money. But I mean, these are, these are sort of really deep cuts that would seriously hinder the ability of these programs to function, right?

Karlin-Smith: NIH for a number of years was operating on only getting budget increases that were not keeping up kind of with inflation and so forth. And they just finally, over the last few years, got back on track. Even though their budget seemed like it was going up, really, if you adjusted for inflation, it had been going down. And then when you have an agency like FDA, which, the line is always that they do an incredible amount of work on really a shoestring budget for the amount they regulate, so they never get — NIH sometimes gets, you know, that bipartisan popularity and does get those bigger increases back, and they never really get those big increases, so I think it would be harder for them also to get that back later on if they did get such big cuts.

Hellmann: There are like also a lot of health programs that just operate on flat funding from year to year, like Title X.

Rovner: Yeah, the family planning program.

Hellmann: And so obviously, like HHS said last year, We are only able to fund a certain number of providers, like, less than previously, because of inflation, and stuff like that. So obviously if you take a 14% cut to that, it would make it even harder.

Rovner: All right. Another major proposal in the package would institute or expand work requirements for people on food stamps and on Medicaid. Now, we’ve had work rules for people on welfare since the 1990s, but most people on Medicaid and food stamps, for that matter, either already work or can’t work for some reason. Why are the Republicans so excited about expanding or instituting work requirements?

Hellmann: I think there are a few reasons. No. 1, it’s a big money saver. The CBO [Congressional Budget Office] came out with their analysis this week showing that it would save the federal government about $109 billion. A lot of that would be shifted to the states because the way the bill is written, states would still be allowed to cover these individuals if they can’t prove that they’re working. But they’d have to pick up the costs themselves, which, I’ve seen experts questioning if that would really happen, even in states like, you know, New York and California, who probably wouldn’t want these people to lose coverage. But I think an argument that you hear a lot too, especially during the Trump administration when they were really pushing these, is they say that work is what provides fulfillment and dignity to people. Former CMS [Centers for Medicare & Medicaid Services] administrator Seema Verma talked about this a lot. The argument I heard a lot on the Hill this week is that Medicaid and other — SNAP [Supplemental Nutrition Assistance Program], TANF [Temporary Assistance for Needy Families], programs like that — trap people in poverty and that work requirements will kind of give them an incentive to get jobs. But as you said, like, it wouldn’t apply to most — you know, most people are already working. And most people who lost coverage under some of the previous iterations of this just didn’t know about it or they were unable to complete the reporting requirements.

Rovner: And to be clear, the CBO estimate is not so much because people would work and they wouldn’t need it anymore. It’s because people are likely to lose their coverage because they can’t meet the bureaucratic requirements to prove that they’re working. Shefali, you’re nodding. We’ve seen this before, right?

Luthra: I was just thinking, I mean, the savings, yes, they come from people losing their health insurance. That’s very obvious. Of course, you save money when you pay for fewer people’s coverage. And you’re absolutely right: “This will motivate people to work” argument has always been a little bit — complicated is a generous word. I think you could even say it’s a bit thin just because people do already work.

Rovner: And they — many of them work, they don’t earn enough money, really, to bring them out of poverty. And they don’t have jobs that offer health insurance. That’s the only way they’re going to get health insurance. All right. Well, where do we go from here with the debt ceiling? So now we’ve got this Republican plan that says work — everybody has to work and prove that they work and we’re going to cut all these programs — and the Democrats saying this is not a discussion for the debt ceiling, this is a separate discussion that should happen down the road on the budget. Is there any sign that either side is going to give here?

Hellmann: It doesn’t seem like it. Democrats have been saying, like, this is a non-starter. The president has been saying, like, we’re not going to negotiate on this; we want a clean increase in the debt ceiling, and we can talk about some of these other proposals that you want to pursue later. But right now, it seems like both sides are kind of at a standstill. And I think Republicans see, like, passing this bill yesterday as a way to kind of strengthen their hand and show that they can get all on the same page. But I just do not see the Senate entertaining a 14% cut or, like, Medicaid work requirements or any of this stuff that is just kind of extremely toxic, even to some, like, moderate Democrats over there.

Rovner: Yeah, I think this is going to go on for a while. Well, so at this high level, we’ve got this huge partisan fight going on. But interestingly, this week elsewhere on Capitol Hill things seem surprisingly almost bipartisan, dare I say. Starting in the Senate, the chairman and the ranking member of the Health, Education, Labor and Pensions Committee, Democrat Bernie Sanders and Republican Bill Cassidy, announced that they’ve reached agreement on a series of bills aimed at reining in prescription drug costs for consumers, including one to more closely regulate pharmacy benefit managers and others to further promote the availability of generic drugs. Sarah, we’ve talked about the target on the backs of PBMs this year. What would this bill do and what are the chances of it becoming law?

Karlin-Smith: So this bill does three things: One is transparency. They want to pull back the cover and get more data and information from PBMs so that they can better understand how they’re working. So I think the idea would then be to take future policy action, because one of the criticisms of this industry is it’s so opaque it’s hard to know if they’re really doing the right thing in terms of serving their customers and trying to save money and drug prices as they say they are. The other thing is it would basically require a lot of the fees and rebates PBMs get on drug prices to be given back directly to the health plan, which is sort of interesting because the drug industry has argued that money should be given more directly to patients who are paying for those drugs. And when that has scored by the CBO, that often costs money because that leads to PBMs using less money to lower people’s premiums, and premiums are subsidized from the government. So I’m curious if the reason why they designed the bill this way is to sort of get around that, although then I’m not sure exactly if you get the same individual … [unintelligible] … level benefit from it. And then the third thing they do is they want to eliminate spread pricing, which is where — this is really a pharmacy issue — where PBMs basically reimburse pharmacies less than they’re charging the health plans and, you know, their customers for the drug and kind of pocketing the difference. So I think, from what I’m seeing on the Hill, there’s a ton of momentum to tackle PBMs. And like you said, it’s bipartisan. Whether it’s this bill or which particular bills it’s hard to know, because Senate Finance Committee is sort of working on their own plan. A number of committees in the House are looking at it, other parts of the Senate. So to me, it seems like there’s reasonable odds that something gets done maybe this spring or summer on PBMs. But it’s hard to know, like, the exact shape of the final legislation. It’s pretty early at this point to figure out exactly how it all, you know, teases out.

Rovner: We have seen in the past things that are very bipartisan get stuck nonetheless. Well, across the Capitol, meanwhile, the House Energy and Commerce Committee is also looking at bipartisan issues in health care, including — as they are in the Senate — how to increase price transparency and competition, which also, I hasten to add, includes regulating PBMs. But, Jessie, there was some actual news out of the hearing at Energy and Commerce from Chiquita Brooks-LaSure, who runs the federal Medicare and Medicaid programs. What did she say?

Hellmann: So they’ve instituted two fines against hospitals that haven’t been complying with the price transparency requirements. So I think that brings the number of hospitals that they’ve fined to, like, less than five. Please fact-check that, but I’m pretty sure that I can count it on one hand.

Rovner: One hand. They have, they have actually fined a small number of hospitals under the requirement. Yeah. I mean, we’ve known — we’ve talked about this for a while, that these rules have been in effect since the beginning of 2022, right? And a lot of hospitals have just been not doing it or they’re supposed to be showing their prices in a consumer-understandable way. And a lot of them just haven’t been. And I assume CMS is not happy with this.

Hellmann: Yeah, so Brooks-LaSure said yesterday that CMS is no longer going to issue warnings for hospitals that aren’t making a good-faith effort to comply with these rules. Instead, they’ll move straight to what’s called the corrective action phase, where basically hospitals are supposed to, like, say what they’re going to do to comply with these. And after that, they could get penalized. So we’ll see if that actually encourages hospitals to comply. One of the fines that they issued is like $100,000. And so I think some hospitals are viewing this, you know, as a cost of doing business because they think it would cost them more to comply with the price transparency rules than it would to not comply with them.

Rovner: So transparency here is still a work in progress. There’s also a fight in the House over the very wonky-sounding site-neutral payment policy in Medicare, which, like the surprise bill legislation from a few years back, is not so much a partisan disagreement as a fight between various sectors in the health care system. Can you explain what this is and what the fight’s about?

Hellmann: So basically hospital outpatient departments or, like, physician offices owned by hospitals get paid more than, like, independent physician’s offices for providing things like X-rays or drug administration and stuff like that. And so this is —

Rovner: But the same care. I mean, if you get it in a hospital outpatient or a doctor’s office, the hospital outpatient clinic gets paid more.

Hellmann: Yeah. And there’s not much evidence that shows that the care is any different or the quality is better in a hospital. And so this has kind of been something that’s been getting a lot of attention this year as people are looking for ways to reduce Medicare spending. It would save billions of dollars over 10 years, I think one think tank estimated about 150 billion over 10 years. It’s getting a lot of bipartisan interest, especially as we talk more about consolidation in hospitals, you know, buying up these physician practices, kind of rebranding them and saying, OK, this is outpatient department now, we get paid more for this. There are fewer independent physician’s offices than there used to be, and members have taken a really big interest in how consolidation increases health care prices, especially from hospitals. So it does seem like something that could pass. I will say that there is a lot of heat coming from the hospital industry. They released an ad on Friday last week warning about Medicare cuts, so, they usually do whenever anyone talks about anything that could hurt their bottom lines. Very generalist ad and kind of those “Mediscare” ads that we’ve been talking about. So it’ll be interesting to see if members can withstand the heat from such a powerful lobbying force.

Rovner: As we like to say, there’s a hospital in every single district, and most of them give money to members of Congress, so anything that has the objection of the hospital industry has an uphill battle. So we’ll see how this one plays out. Let us turn to abortion. The fate of the abortion pill mifepristone is still unclear, although the Supreme Court did prevent even a temporary suspension of its approval, as a lower court would have done. Now the case is back at the 5th Circuit Court of Appeals, which has swiftly scheduled a hearing for May 17. But it still could be months or even years before we know how this is going to come out, right, Shefali?

Luthra: It absolutely could be. So the fastest that we could expect to see this case before the Supreme Court again, just — what from folks I’ve talked to is, I mean, we have this hearing May 17, depending on how quickly the 5th Circuit rules, depending on how they rule, there is a chance that we could see if we get, for instance, an unfriendly ruling toward mifepristone, the federal government could appeal to the Supreme Court this summer. We could see if the Supreme Court is willing to take the case. The earliest that means that they would hear it would be this fall, with a decision in the spring a year from now, but that would be quite fast. I think what’s striking about it is that we may all recall last year, when the Supreme Court issued its decision in the Dobbs case, they said this will put the issue of abortion back in the hands of the states, out of the judiciary, we will no longer be involved. And anyone at the time could have told you there’s no way that this would happen because it is too complicated of an issue, when you undo 50 years of precedent, to assume there will be no more legal questions. And here we are. Those critics have been proven right, because who could have seen that, once again, we’d have the courts being asked to step in and answer more questions about what it means when a 50-year right is suddenly gone?

Rovner: Indeed. And of course, we have the … [unintelligible] … This is going to be my next question, about whether this really is all going to be at the state level or it’s going to be at the state and the federal level. So as red states are rushing to pass as many restrictions as they can, some Republicans seem to be recognizing that their party is veering into dangerously unpopular territory, as others insist on pressing on. We saw a great example of this over the weekend. Former vice president and longtime anti-abortion activist Mike Pence formally split on the issue with former President Trump, with Pence calling for a federal ban and not just leaving the issue to the states. Nikki Haley, the former governor of South Carolina and the lone woman in the Republican field so far, managed to anger both sides with the speech she made at the headquarters of the hard-line anti-abortion group the Susan B. Anthony List. Haley’s staff had suggested ahead of time that she would try to lay out a middle ground, but she said almost nothing specific, which managed to irritate both full abortion abolitionists and those who support more restrained action. Is this going to be a full-fledged war in the Republican Party?

Luthra: I think it has to be. I mean, the anti-abortion group is still very powerful in the Republican Party. If you would like to win the nomination, you would like their support. That is why we know that Ron DeSantis pursued a six-week ban in Florida despite it being incredibly unpopular, despite it now alienating many people who would be his donors. This is just too important of a constituency to annoy. But unfortunately, you can’t really compromise on national abortion policy if you’re running for president. A national ban, no matter what week you pick, it’s not a good sound bite. We saw what happened last year when Sen. Lindsey Graham put forth his national 15-week ban: Virtually no other even Republicans wanted to endorse that, because it’s a toxic word to say, especially in this post-Dobbs environment, especially now that we have all of this polling, including NPR polling from yesterday, that showed us that abortion bans remain quite unpopular and that people don’t trust Republicans largely on this issue. I think this is going to be incredibly interesting because we are going to eventually have to see Nikki Haley take a stance. We will have to see Donald Trump, I think, frankly, be a bit more committal than he has been, because meanwhile, he has lately told people publicly that he would not issue any federal policy, would leave this up to the states, we also know that he has said different things in other conversations. And at some point those conflicts are going to come to a head. And what Republicans realize is that their party’s stance and the stance they need to take to maintain favor with this important group is just not a winning issue for most voters. People don’t want abortion banned.

Rovner: Yeah, it’s a real problem. And Republicans are seeing they have no idea how to sort of get out of this box canyon, if you will. Well, back in the states, things seem to be getting even more restrictive. In Oklahoma this week NPR has another of those wrenching stories about pregnant women unable to get emergency health care. This time, a woman, a mom of three kids already with a nonviable and cancerous pregnancy who was told literally to wait in the hospital parking lot until she was close enough to death to obtain needed care. And that case turned out not to be an outlier. A quote-unquote “secret shopper” survey of hospitals in Oklahoma found that a majority of the 34 hospitals contacted could not articulate what their policy was in case of pregnancy complications or how they would determine if the pregnant person’s life was actually in danger. I can’t imagine Oklahoma is the only state where this is the case. We have a lot of these bans and no idea where sort of the lines are, even if they have exceptions.

Luthra: We know that this is not isolated to Oklahoma. There is a lawsuit in Texas right now with a group of women suing the state because they could not access care that would save their lives. One of those plaintiffs testified in Congress about this yesterday. Doctors in virtually every state with an abortion ban have said that they do not know what the medical exceptions really are in practice other than that they have to wait until people are on death’s door because there isn’t — medical emergency isn’t really a technical term. These bills, now laws, were written without the expertise of actual physicians or clinicians because they were never really supposed to take effect. This really has been just another example of a way that the dog chased the car and now the dog has the car.

Rovner: And the dog has no idea what to do with the car. Well, meanwhile, in Iowa, the attorney general has paused the state’s policy of paying for abortions as well as emergency contraception for rape victims. This is where I get to rant briefly that emergency contraception and the abortion pill are totally different, that emergency contraception does not cause abortion — it only delays ovulation after unprotected sex and thus is endorsed for rape victims in Catholic health facilities across Europe. OK, end of rant. I expect we’re going to see more of this from officials in red states, though, right, with going — not just going after abortions, but going after things that are not abortion, like emergency contraception.

Luthra: And I mean, if we look at what many of the hard-line anti-abortion groups advocate, they don’t just want to get rid of abortion. They specifically name many forms of hormonal contraception, but specifically the emergency contraception Plan B, and they oppose IUDs [intrauterine devices]. It would just be so, so surprising if those were not next targets for Republican states.

Rovner: So abortion isn’t the only culture war issue being fought out in state legislatures. There’s also a parallel effort in lots of red states to curtail the ability of trans people, mostly but not solely teenagers, to get treatment or, in some cases, to merely live their lives. According to The Washington Post, as of the middle of this month, state legislators have introduced more than 400 anti-trans bills just since January. That’s more than the previous four years combined. Nearly 30 of them have become law. Now, I remember in the early aughts when anti-gay and particularly anti-gay marriage bills were the hot items in red states. Today, with some notable exceptions, gay marriage is as routine as any other marriage. Is it possible that all these attacks on trans people, by making them more visible, could have the same effect? In other words, could this have the opposite effect as the people who are pushing it intended? Or am I just looking for a silver lining here?

Luthra: I think it’s too soon to say. There isn’t incredible polling on this issue, but we do know that in general, like, this is not an issue that even Republicans pick their candidates for. It’s not like they are driven to the ballot box because they hate trans people this much. I wouldn’t at all be surprised if there is a backlash, just because what we are hearing is so, frankly, horrific. What I have been really struck by, in addition to the parallels to anti-gay marriage, have been the ways in which restrictions on access to health care for trans people really do parallel attacks to abortion in particular, thinking about, for instance, passing laws that restrict access to care for minors, passing laws that restrict Medicaid from paying for care, that restrict how insurance covers for care. It’s almost spooky how similar these are, because people often think minors are easier to access first. People often think health insurance is an easier, sort of almost niche issue to go for first. And what we don’t often see until afterward is that these state-by-state laws have made care largely inaccessible. The other thing that I think about all the time is that these are obviously, in both cases, forms of health care restriction that are largely opposed by the medical community, that are often crafted without the input of actual medical expertise, and that target health care that does feel incredibly difficult to extricate from the patient’s gender.

Rovner: Yeah. The other thing is that people are going from state to state, just like with abortion. In order to get health care, they’re having to cross state lines and in some cases move. I mean, we’re starting to see this.

Luthra: The high-profile example being Dwyane Wade, formerly of the Miami Heat, moving away from Florida because of his child.

Karlin-Smith: The other thing, Julie, you were saying in terms of how optimistic to be, in terms of maybe the other side of this issue sort of pushing back and overcoming it, is that Politico had this good story this week about doctors in states where this care is perfectly legal and permissible but they’re getting so many threats and essentially their health care facilities feel that they’re so much in danger that they are concerned about how to safely provide and help these people that they do want to help and give care, while also not putting their families and so forth in danger, which perhaps also has a parallel to some of how there’s tons of, like, constant protests outside abortion clinics. And people have volunteered for years just to kind of escort people so they can safely feel comfortable getting there, which of course is, you know, can be very traumatic to patients trying to get care.

Rovner: Yeah, the parallels are really striking. So we will watch that space too. All right. That is the news for this week. Now, we will play my “Bill of the Month” interview with Renuka Rayasam. Then we will come back and share our extra credit. We are pleased to welcome to the podcast Renuka Rayasam, who reported and wrote the latest KFF Health News-NPR “Bill of the Month” story. Renu, welcome to “What the Health?”

Renuka Rayasam: Thanks, Julie. Thanks for having me.

Rovner: So this month’s patient was pregnant with twins when she experienced a complication. Tell us who she is, where she’s from, and what happened.

Rayasam: Sure. Sara Walsh was 24 weeks pregnant with twins — it was Labor Day weekend in 2021 — and she started to feel something was off. She had spent a long time waiting to have a pregnancy that made it this far — eight years, she told me. But instead of feeling excited, she started to feel really nervous and she knew something was off. And so on Tuesday, she went to her regular doctor. And then on Wednesday, after that Labor Day, she went to her maternal fetal specialist, who diagnosed her with a pretty rare pregnancy complication that can occur when you have twins, when you have multiple fetuses that share blood unevenly through the same placenta. And it’s called twin-to-twin transfusion syndrome. And, you know — and this was Wednesday — she went into the office in the morning and she waited a long time for the doctor to kind of come back with the results, she and her husband, and just kind of spent the morning sort of back-and-forth between her maternal fetal specialist and her OB-GYN. And they told her she needed to get treatment immediately, that if she didn’t have treatment that she could lose one or both twins, she herself could even die. She needed to keep her fluid intake low. So they referred her to a specialist about four hours away from where she was. She was in Winter Haven, Florida, and they referred her to a specialist near Miami. And the specialist there apparently does not contract with any private insurance. And so that afternoon, hours after her diagnosis, she was packing her bags; she was getting ready to go, figuring out a place to stay, a hotel room and all that. And she gets a call from the billing office of this specialist in Coral Gables, Florida, near Miami. And they said, “Listen, we don’t contract with private insurance. You have to pay upfront for the pre surgical consultation for the surgery and then the post-surgical consult. And you need to have that money before you show up tomorrow in our office at 8 a.m.”

Rovner: And how much money was it?

Rayasam: About $15,000 in total for the consultations and the surgery itself. She told me she burst into tears. She didn’t want to lose these twins. She wasn’t given any option of shopping around for another provider. And she spent some time trying to figure out what to do. She couldn’t get a medical credit card because I guess there’s a 24-hour waiting period and she didn’t have that long. And so finally, her mother let her borrow her credit card. She checked into a hotel at midnight and at 8 a.m. the next morning she handed over her credit card and her mother’s credit card before she could have the procedure — before she could even see the doctor, I should say.

Rovner: And the outcome was medically good, right?

Rayasam: Yeah. The provider who did her surgery is a pioneer in this field. And that was why those doctors sent Sara to this provider, Dr. Ruben Quintero. He came up with this staging system that helps assess the symptom’s severity and even pioneered the treatment for it. But he sort of used all that to kind of say, OK, you have to pay me; I’m not even going to deal with insurance in this case. And so that afternoon, it was that Thursday, the day after she was diagnosed, she had a procedure, it went well, she had a couple of follow-ups in the following weeks. And then five weeks later, she delivered premature but otherwise healthy twin girls.

Rovner: So is that even legal for a doctor to say, “I’m not even going to look at you unless you pay me some five-figure amount”?

Rayasam: Generally, no. We have the federal No Surprises Act, as you know, and that’s meant to do away with surprise billing. But that was really designed for kind of inadvertent medical bills or surprises. Things get really complicated when there’s this appearance of choice where, you know, she had time to call the insurer, she had time to call the provider. It wasn’t as if she was unconscious and sort of rushed to the nearest doctor. Technically, she had a choice here. She could have chosen not to get the procedure. She could have gone to a different state. But obviously, those are not real choices in her situation when she needed the procedure so urgently. And so in those cases, you know, the billing experts I spoke with said this is a real loophole in federal billing legislation and state surprise billing legislation because the bill wasn’t a surprise. She knew how much to expect upfront. And that’s what makes this situation tricky.

Rovner: And she knew that the doctor wasn’t in network.

Rayasam: Absolutely. She knew the doctor wasn’t in network, and she knew how much she had to pay, and she willingly forked over the money, of course, as anyone would have in that situation or tried to in that situation.

Rovner: So after the fact, she went back to her insurance company to see if they could work something out, since it was pretty much the only place she could have gone at that point to get the treatment. But that didn’t go so well.

Rayasam: That didn’t go so well, and it’s one complication in this story that I myself don’t know what to make of, but the provider does not contract with any insurer, I should say. But he did take her insurance card and — or, the billing person did — and they say that they bill as a courtesy to the patient. So they file the paperwork for the patient. They say, “OK, your insurer will reimburse you. We’re going to provide all the paperwork.” In Sara’s case, it took a long time for this doctor and his practice to get Blue Cross Blue Shield the paperwork they needed to kind of pay for her claim. And in addition to that, they didn’t really send over the right paperwork right away. So it took a long time. And eventually she got only $1,200 back and she ended up paying far more than that out-of-pocket.

Rovner: And of course, the next obvious question is, doesn’t her insurance have an out-of-pocket maximum? How did she ever end up spending this much?

Rayasam: That’s a great question. We reached out to her insurer, and they didn’t really give us much of an explanation, but they, you know, on their billing statements and what they said to her was, “Hey, you went willingly out of network; this doesn’t qualify you for those out-of-pocket maximums.” They didn’t give us an explanation as to why. This seems to be a classic case of where those maximums should apply. But like I said, I think, you know, she had very little recourse. She tried to appeal the bills. She’s, you know, been on the phone with her insurer multiple times. The thing that makes this story more complicated is that it’s such a rare procedure and there aren’t that many providers in the country that even perform this procedure. So at first she was having to struggle with billing codes and all that with her insurance, so a lot of the people she was dealing with on the insurance side were really confused. It wasn’t something that they had a playbook for, knew what to do with, and that’s what made this a little bit more complicated.

Rovner: So what’s the takeaway here? I mean, obviously this was a rare complication, but if you multiply the number of rare complications of different things, you’re talking about a lot of people. Is there any way to get around this? I mean, it sounds like she did everything she could have in this case.

Rayasam: She did. In this case, it turns out there was another provider in Florida. There was no way for her to know that. Neither her OB-GYN nor the maternal fetal specialist told her about this other provider. I found out about it. I called around and did the reporter thing. And there are now four providers in Florida that will treat this. But of course, you know, if I was a patient, I wouldn’t shop around and risk my pregnancy either. So it’s unfortunate, in this case, there’s not much a person can do other than make sure that they’re keeping all the paperwork. And, you know, one thing that one of the billing experts I spoke with told me is that when you pay upfront, it makes things a lot harder. And in this case, like I said, she didn’t have a choice. But if there’s ever a way to get the bill on the back end, then there’s more of an incentive for the provider and the insurer to work together to get paid. But once the provider was paid, the insurer is not going to rush to reimburse the patient.

Rovner: And the provider is not going to rush to help the insurer figure out what to do. Ah well, another cautionary tale. Renu Rayasam, thank you so much.

Rayasam: Thank you.

Rovner: OK, we’re back and it’s time for our extra credit segment. That’s when we each recommend a story we read this week we think you should read too. As always, don’t worry if you miss it. We will post the links on the podcast page at kffhealthnews.org and in our show notes on your phone or other mobile device. Sarah, why don’t you go first this week?

Karlin-Smith: Sure. I took a look at a story in The Wall Street Journal, “Weight-Loss Drugmakers Lobby for Medicare Coverage. Adding Ozempic, Mounjaro to federal plans could stoke sales.” It really documents well sort of the range of lobbying organizations and groups and where they’re sort of putting money to try and get Medicare to shift its policies and cover treatments for obesity, which was something that in the early creations of Part D was banned. And I think largely at that time it was because weight loss was seen as more of a cosmetic treatment than something that impacted health in the same way we appreciate now.

Rovner: And also, there wasn’t anything that worked.

Karlin-Smith: Right. The things that prior to this, the things that were available at different times were not very effective and in some cases turned out to be fairly unsafe. And of course, now we have treatments that seem to work very well for a number of people, but there’s a fear of just how much money it would cost Medicare. So the other interesting thing in this story is they talk about some lawmakers in Congress thinking about ways to maybe narrowly start opening the floodgates to access by potentially maybe limiting it to people with certain BMIs [body mass indexes] or things like that to maybe not have the initial cost hit they might be concerned about with it.

Rovner: And of course, whether Medicare covers something is going to be a big factor in whether private insurance covers something. So it’s not just the Medicare population I think we’re talking about here.

Karlin-Smith: Right. There’s already I know lobbying going on around that. My colleague wrote a story a few weeks ago about Cigna sort of pushing back about having those drugs be included potentially in, like, the essential health benefits of the ACA [Affordable Care Act]. So it’s going to be, yeah, a broader issue than just Medicare.

Rovner: Yeah, it’s a lot. I mean, I remember when the hepatitis C drugs came out and we were all so, you know, “Oh my God, how much this is going to cost, but it cures hepatitis C.” But I mean, that’s not nearly as many people as we’re talking about here. Jessie, why don’t you go next?

Hellmann: My stories from Politico. It’s called “Gun Violence Is Actually Worse in Red States. It’s Not Even Close.” It takes a weird twist that I was not expecting. Basically, the premise is about how gun deaths are actually higher in areas like Texas and Florida. They have higher per capita firearm deaths, despite messaging from some Republican governors that it’s actually, like, you know, cities like Chicago and New York that are like war zones, I think it’s the former president said. The author kind of makes an interesting argument I didn’t see coming about how he thinks who colonized these areas plays into kind of like the culture. And he argues that Puritans like had more self-restraint for the common good. And so areas like that have less firearm deaths where, you know, the Deep South people were — had like a belief in defending their honor, the honor of their families. So they were kind of more likely to take up arms. Not sure how I feel about this argument, but I thought it was an interesting story and an interesting argument, so —

Rovner: It is. It’s a really good story. Shefali.

Luthra: My story is from The Washington Post. It is called “The Conservative Campaign to Rewrite Child Labor Laws.” It’s a really great look at this Florida-based group called the Foundation for Government Accountability, which, despite its innocuous-sounding name, is trying to help states make it easier to employ children. This is really striking because we have seen, in states like Arkansas, efforts to make it easier to employ people younger than 16 in some cases, which is just really interesting to watch in these states that talk about protecting children and protecting life to, to then make it easier to, to employ kids.

Rovner: And in dangerous profess — in dangerous jobs sometimes. I mean, we’re not talking about flipping burgers.

Luthra: No, no. We’re talking about working in, like, in meat plants, for instance. But I think what’s also interesting is that this same organization that has made it easier to employ children has also tried to fight things like anti-poverty and try to fight things like Medicaid expansion, which is just sort of, if you’re thinking about it from an access-to-health standpoint, like, anti-poverty programs and Medicaid are shown to make people healthier. It’s sort of a really interesting look into a worldview that in many ways uses one kind of language but then advance the policy agenda that takes us in a different direction.

Rovner: Maybe we should go back to to Jessie’s story and depend on who settled that part of the country. We shall see. Speaking of history, my story’s from The Nation, and it’s called “The Poison Pill in the Mifepristone Lawsuit That Could Trigger a National Abortion Ban,” by Amy Littlefield. And it’s about the Comstock Act, which is a law from the Victorian era — it was passed in 1873 — that banned the mailing of, quote, “lewd materials,” including articles about abortion or contraception. A lot has been written about the Comstock Act of late because it was used to justify part of the opinion in the original mifepristone case out of Amarillo. But what this article makes clear is that reviving the law is actually a carefully calculated strategy to make abortion illegal everywhere. So this is not something that just popped up in this case. It’s a really interesting read. OK, that is our show. As always. if you enjoyed the podcast, you can subscribe wherever you get your podcasts. We’d appreciate it if you left us a review; that helps other people find us too. Special thanks, as always, to our ever-patient producer, Francis Ying. As always, you can email us your comments or questions. We’re at whatthehealth@kff.org. Or you can tweet me, at least for now. I’m @jrovner. Sarah?

Karlin-Smith: I’m @SarahKarlin.

Rovner: Jessie.

Hellmann: @jessiehellmann.

Rovner: Shefali.

Luthra: @Shefalil.

Rovner: We’ll be back in your feed next week. Until then, be healthy.

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Supreme Court justices could act at any moment on access to the abortion pill mifepristone. Beyond reproductive health, their ruling could carry significant implications for states’ rights and FDA independence and integrity. For now, though, observers are unsure what the court will do — or what exactly prompted justices to again delay their decision this week.

At the Capitol, lawmakers grumbled, scoffed, and bickered this week as House Speaker Kevin McCarthy revealed the Republican proposal to cut government spending. The package would be dead-on-arrival in the Democratic-controlled Senate. But of note is the pushback from within McCarthy’s own caucus, with some hard-right conservatives pressing to go further by demanding the repeal of the Inflation Reduction Act in exchange for raising the debt ceiling.

And President Joe Biden pursued new efforts to grant legal status to young immigrants living in the country illegally who were brought here as children, sometimes called “Dreamers,” as his administration announced a plan to grant them access to government-funded health coverage.

This week’s panelists are Mary Agnes Carey of KFF Health News, Rachel Cohrs of Stat, Sandhya Raman of CQ Roll Call, and Joanne Kenen of the Johns Hopkins Bloomberg School of Public Health and Politico.

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Rachel Cohrs
Stat News

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Joanne Kenen
Johns Hopkins Bloomberg School of Public Health and Politico

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Sandhya Raman
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Among the takeaways from this week’s episode:

• The Supreme Court extended its stay on the use of mifepristone through Friday, giving justices longer to act on a major, complicated case with nationwide implications for reproductive health. It is unclear what the court will do, though there are several actions it could take — including sending the case back to the lower courts or again extending the stay and buying justices even more time to come to agreement or pen dissents.
• GenBioPro, which produces the generic version of mifepristone, sued the FDA on Wednesday, attempting to preserve access to the drug. About two-thirds of the mifepristone currently used in the United States is generic.
• In congressional news, House Speaker McCarthy released what is effectively Republicans’ opening offer in the fight over raising the debt ceiling. The package includes GOP health priorities that would not garner needed support in the Senate, like work requirements for Medicaid and the clawback of unspent covid-19 pandemic funds.
• While health costs are high across government programs, Medicaid takes the big hit in the Republican proposal to cut federal spending. Republicans have embraced work requirements for government assistance since at least the 1980s, yet in Arkansas — a state that implemented work rules for Medicaid — it has proved challenging to verify that enrollees are meeting those requirements.
• The Senate Finance Committee, which has jurisdiction over much of federal health spending, revealed a package this week to tackle drug pricing. While the proposal is in the early stages, it seeks to incorporate bipartisan measures touching pharmacy benefit managers, insulin users, and more.
• And on the coverage front, the Biden administration announced that immigrant kids brought to the United States who remain here under the Deferred Action for Childhood Arrivals program will be able to apply for Medicaid and Affordable Care Act coverage. This eligibility expansion comes as states prepare to disenroll those who no longer qualify for Medicaid as the public health emergency’s coverage protections expire. Expect a fight from some states as they resist being forced to cover insurance for individuals living in the U.S. without legal permission.

Plus, for “extra credit,” the panelists suggest health policy stories they read this week that they think you should read, too:

Mary Agnes Carey: The New York Times’ “A Beauty Treatment Promised to Zap Fat. For Some, It Brought Disfigurement,” by Anna Kodé

Joanne Kenen: The New York Times’ “My Transplanted Heart and I Will Die Soon,” by Amy Silverstein

Sandhya Raman: ABC News’ “Puerto Rico’s Water Supply Is Being Depleted, Contaminated by Manufacturing Industry on the Island, Experts Say,” by Jessie DiMartino, Lilia Geho, and Julia Jacobo

Rachel Cohrs: The Wall Street Journal’s “‘I Hate You, Kathie Lee Gifford!’ Ozempic Users Report Bizarre Dreams,” by Peter Loftus

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Transcript: Will They or Won’t They (Block the Abortion Pill)?

KFF Health News’ ‘What the Health?’Episode Title: Will They or Won’t They (Block the Abortion Pill)?Episode Number: 294Published: April 20, 2023

[Editor’s note: This transcript, generated using transcription software, has been edited for style and clarity.]

Mary Agnes Carey: Hello and welcome back to “What the Health?” I’m Mary Agnes Carey, partnerships editor for KFF Health News. I’m filling in this week for Julie Rovner, and I’m joined by some of the best and smartest health reporters in Washington. We’re taping this week on Thursday, April 20, at 10 a.m. Eastern. As always, news happens fast and things might have changed by the time you hear this. So here we go. Joining us today by video conference are Joanne Kenen of the Johns Hopkins Bloomberg School of Public Health and Politico.

Joanne Kenen: Hi, everybody.

Carey: Rachel Cohrs of Stat.

Cohrs: Morning, everyone.

Carey: And Sandhya Raman of CQ Roll Call.

Raman: Good morning.

Carey: Let’s start with the current court action on mifepristone. The Supreme Court was scheduled to rule yesterday on a decision from the U.S. Court of Appeals for the 5th Circuit that rolled back FDA action since 2016, allowing patients to get mifepristone through the mail, authorizing prescriptions by medical professionals other than doctors, and approving the drug’s use up to 10 weeks into a pregnancy instead of seven. Supreme Court Justice Samuel Alito Jr, who’d previously set Wednesday as the deadline for the court to act, extended that stay until Friday, and the justices could certainly act before they choose to —hopefully not while we’re taping. But I wanted to get everyone’s thoughts on why do you think the court didn’t act yesterday? Joanne, can I start with you?

Kenen: I mean, presumably they’re still hashing it out. There’re probably two or three judges who are still thinking about it or discussing it with their colleagues, or colleagues who want to think they can persuade them to their side. I mean, there’s something internal. On the other hand, I mean, they didn’t originally give themselves a lot of time to consider a complicated and historic case. We know there’s an anti-abortion majority. We know they’re not crazy about medical abortions any more than they are about surgical abortions. But this has large implications about states’ rights and about the sort of integrity of the FDA. So they may just wanted to sleep on it. They’re human, but the two sides are battling for two or three in the middle.

Carey: So what does this signal about how they might rule? I mean, to your point about the split, the battle, what are the options? What do you — Sandhya, what do you think about what they might —

Kenen: Well, if it was slam dunk, we’d have had it.

Carey: That is true. That is true. It is not a slam dunk.

Raman: And everyone that I have talked to in the last few weeks on this is just that there are so many different options, different permutations, that it’s difficult even for people that are experts on FDA policy, like expert lawyers, experts on abortion policy, to just kind of like predict the nuances. You know, they could let the stay expire. They could send it back to the 5th Circuit. They could decide to hold arguments and let it expire or not expire. They could decide something different than the 5th Circuit. You know, there’s so many different ways that things could happen that I think it makes it difficult. And then yesterday, the other manufacturer of mifepristone, GenBioPro, also filed suit against the FDA. So now we have, since Dobbs, like five different lawsuits related to mifepristone and three of them, post-Dobbs, are related to the FDA in particular. And I think it just gets very, very complicated to make a decision, even if ideologically some people might align with one way versus the other, given all of these different permutations and that we still have that Washington case that is attacking another part of this. So it’s just complicated to get people to do something. And the fact that this case has been moving so, so quickly.

Carey: Could we be in the same place on Friday? Could we get another stay? Could the justices certainly ask for more time, and are there any thoughts about the probability of that actually happening? Rachel, what are your thoughts?

Cohrs: I think they can do what they want.

Carey: That’s true.

Cohrs: They gave themselves time once more, and I think obviously there’s a benefit to having some certainty and predictability for people, for providers, but certainly they could stay again.

Carey: So, Sandhya, you just mentioned the Washington state case. So while this Texas ruling is before the Supreme Court, a federal district judge in Washington state issued a ruling in a separate case that instructed the FDA to not alter the current availability of the drug in 17 states and the District of Columbia. And as you just mentioned, a manufacturer of the generic version of the drug — the company’s name is GenBioPro; they make the generic version of mifepristone — they’re arguing that if the FDA implements a court order suspending approval of the drug, the agency would deprive the company of its rights to market the drug without due process of law. And as I understand, this company is a major manufacturer of the generic version of the drug, right? So let’s talk a bit more about this confusion of these split rulings. I mean, what is the public to make of it? What’s the reaction with facilities that are providing this medication or doctors who want to prescribe it or just the general public? The person who might be interested in this situation is very confused. I mean, talk a little bit about how people sort through it and what this means for them.

Raman: So the suit that was filed yesterday about the generic, they make two-thirds of the mifepristone that is used in the U.S. So if they were unable to be manufacturing theirs based on a ruling that only allowed the name-brand version of the drug, that’s a huge percentage of the market that is gone, and more than half of abortions are done through medication abortion. So that’s one thorn in it. And I think that another is that we have all of these states that have been stockpiling the drugs — several that have been, you know, in case they don’t know what is happening with the ruling. Washington is one of them. And there’s still not clarity depending on what happens with these cases of, you know, will they be able to use what that they have stockpiled? And then we have other states like New York and I think California that have been stockpiling misoprostol as another way to — in case there’s a court ruling that doesn’t go in their favor — to just give patients in their states access to medication abortion. I think that there are so many different permutations that it’s very difficult for even folks that are confident that the rule may go a different way to know what to predict, just because we’re in such uncertain territory, from all of the different former FDA officials that have said, “You know, this is a very different situation. We don’t even know, after decades of experience at the FDA, like, how this would play out, what it would mean, whether we’d have to pull everything off the market.” How it would play out, it’s just a lot of unknown territory given all of the different things going on.

Kenen: Well, also, whatever they do now isn’t necessarily the end of the story, right? I mean, if the court issues a stay, it will still go through the courts and it presumably ends up at the Supreme Court again. If they issue a stay pending full hearing of the case, it’ll be going on for months more. But either they issue a stay saying the 5th Circuit ruling, which did not totally — the lower federal court banned the use of the pill; the appeals court limited it to seven weeks instead of the FDA has ruled it’s for 10 weeks. So if they uphold the 5th Circuit Court of Appeals, there would still be use, but it would be limited. If they put a stay saying, “Yes, it can stay legal in the states that allow it for now,” then it would still be legal in those states but we’d still be back discussing what is the Supreme Court going to do a couple of months from now.

Carey: And how — where is the drug industry on this? I mean, this would have sweeping ramifications.

Kenen: They’re horrified. One of you might know the number — was it like 250 companies signed the brief that you’re going to have a court decide what drug is safe and what drug is not safe, rather than the FDA? I mean, the pharmaceutical company fights with the FDA all the time, but they need the FDA and they know they need the FDA and they admit they need the FDA. You know, you have one voice in this country saying a drug is safe or a drug is not safe or a drug is safe under the following conditions.

Raman: There have been hundreds of the drug companies that have spoken out against it, and PhRMA [Pharmaceutical Research and Manufacturers of America] more recently also finally came out against it. It’s been pretty uniform in a way that I have not really seen in the past where there have been, you know, the drug companies, the various people that have been regulators, the folks that are in favor of abortion rights, then just advocates — and just very unified in this response.

Carey: Rachel, what is the impact of the drug industry’s weighing in in this manner? How could that shape the decision? Was there anything surprising in how they worked together on this? I know you’ve done some reporting on this area.

Cohrs: Yes. Yeah. So I think certainly them actually filing briefs with the court will kind of help drive home the ramifications of this, just on a much larger scale. I mean, we’re not just talking about abortion now. We’re talking about any medication that could be at all controversial. You know, we’re talking PrEP for HIV. You know, there are so many areas where companies genuinely are concerned about lawsuits and about judges who aren’t experts. So I think this uniform voice will drive home the larger impacts here beyond this one issue. And also, I think, the drug industry has significant resources to invest. And I think, it took a little while, but the trade groups PhRMA and BIO [Biotechnology Innovation Organization] have said that they are willing to invest, and they haven’t made any specific commitments, but certainly I think down the line there could be legal challenges. And now that they have put themselves out there, they certainly are a significant player in the space, with resources.

Raman: The drug industry is also a huge player in, you know, donating to various campaigns and lobbying on the Hill. And it’s definitely going to be — put increasingly different folks in a tight spot if they are receiving a lot of backing from the pharmaceutical industry and if they’ve spoken out in favor of restricting the drug. And it’ll be interesting to see kind of as it goes on what happens there with some of these folks.

Carey: Sure. Well that’s a perfect segue way because we have lawmakers on Capitol Hill are also weighing in on this. About 150 Republicans are urging the Supreme Court to uphold the 5th Circuit’s ruling, while more than 250 Democrats have urged the court to not prevent access to mifepristone. Are Republicans taking a political risk here speaking out? Because I know it’s been talked about on the podcast before, about the abortion rights opponents have some splits on how far to go on some of these restrictions on abortion. You know, Republicans didn’t really seem eager to engage when the decision came out, but now they are. What does that mean? What do you make of it?

Raman: We’ve had that delay first that, you know, a lot of Republicans did not even comment on the case, which was kind of interesting, given that, you know, after a lot of these decisions, we see a lot from both sides kind of weighing in. And I think when you look at some of these briefs, they say a lot of the similar talking points as before, which is something that you can kind of look to. But I mean, the conversation is still moving, even on the Hill. Yesterday, Robert Califf from the FDA was facing questions about mifepristone from different Republicans, from Cindy Hyde-Smith, who had agreed with the lower court decision, from Susan Collins, who was kind of against the decision as one of the Republicans who generally supports abortion rights. And I think it’ll be very interesting if this gets taken up by a committee that has jurisdiction over the FDA, which we have not really seen a commitment to. Energy and Commerce [Committee] Democrats have asked for something on this to come up. But, you know, under Republican leadership, I don’t know that that would necessarily happen. The only committee that is really committed to looking at this issue has been, like, Senate Judiciary, which with Democratic control is going to look a different way. And they don’t really have the jurisdiction over FDA in the same way as some of the other committees do. So I think that’ll be interesting to look at if that changes.

Kenen: There is a divide in the Republican Party about how far to go. I mean, some are for rape and incest exceptions, some are not. Some are for six weeks, some are for 15 weeks, some are for zero weeks. This is reflecting those divisions. It also depends on the individual lawmaker’s district. You know, if you come from an extremely conservative district and you are an anti-abortion absolutist, then you’re going to speak out on this. But we’ve noted they don’t really want to antagonize pharma either. So you’ve seen, I guess it’s 150ish — you haven’t seen all of them. It’s a complicated issue for some of them, given the competing interests, you know. Is abolishing all abortions in the United States of America your top goal? In which case you’re going to want to support the lower court. If you have a more nuanced view, where you’re worried about precedent for overriding the FDA, you have competing — I mean, there are very few abortion rights Republicans, but they don’t all want to draw the line in the same place.

Carey: So while we’re on the subject of Capitol Hill, let’s talk about the debt ceiling. We have a little bit of action there this week. Speaker of the House Kevin McCarthy unveiled his plan to raise the debt ceiling. McCarthy and many Republicans have said they don’t want to raise the debt ceiling without spending cuts. President Biden and many Democrats are pushing for a clean debt ceiling increase. So among its provisions, Speaker McCarthy’s plan would cut federal spending by roughly $130 billion, and that would take spending back to fiscal 2022 levels. Health-related provisions include new work requirements for Medicaid and food stamp recipients, and the package would also claw back unspent covid aid funds. And there’s a bit of a twist on the work requirement proposals of the past: States could opt to keep those that don’t comply with the work rules covered under Medicaid, keep them on the rolls. But if they do, the state would bear the full cost of that coverage and forgo the federal money for those enrollees, right? The proposal also requires states to make use of existing resources like payroll databases, state health and human service agencies, to verify compliance with a work rule when possible. There’s a lot to unpack here. It’s pretty clear that, I mean, House Democrats aren’t going to vote for this. Does the speaker even have enough votes in his own caucus to pass it? I think he can only lose like four.

Kenen: TBD. But I don’t think the conventional wisdom is that he has the votes. You know, it’s a starting offer, but they can change, you know, has to go Rules [Committee]. They’ll change — you know, they could change things.

Carey: It is a starting offer. But your vote is next week and it’s Thursday. OK. Rachel, what’s your take on this?

Cohrs: Yeah, I think it was a bit of a roller coaster this week, as some members of the Freedom Caucus were demanding wholesale repeal of the Inflation Reduction Act around midweek, and they certainly backed off from that, especially the health care portion. So I think that is worth noting, at least right now. Again, unclear if he has the votes, or if the speaker has the votes, and then obviously Senate Democrats aren’t going to go for it and President Biden isn’t going to go for this. So I think, like Joanne said, it is kind of an opening offer here. And again, there isn’t a lot on Medicare in here. So I think we just, you know, finally, after so much rhetoric and so much back-and-forth, have some sort of tangible starting point from Republicans here, which is significant.

Kenen: But, you know, as soon as they made that pledge that we’re not going to touch Medicare, meaning traditional Medicare actually, and we’re not going to touch Social Security, we all knew that, Oh, that means that it’s all going to go to Medicaid. So this is a big Medicaid hit. And work rules have been something the Republicans have embraced at least since the Reagan era, maybe even before, but certainly since the 1980s. A few states tried them or at least said they were going to impose them under the Obama administration. At that point, the administration didn’t approve them and the courts didn’t uphold them. But we have a different court now. So I think this court would uphold; that’s likely. But this is not acceptable for Democrats, nor is it meant to be.

Raman: And when we had the various states propose these and in some cases implement them during the Trump administration, every single one of them was struck down by the court once, sometimes twice. You know, we had Arkansas, we had New Hampshire, we had Kentucky, we had Michigan. Every single time the judge at hand was, you know, “This is going against the function of Medicaid,” which — historically we’ve had work requirements in some of the other programs, but the way the Medicaid statute is written, it has been difficult to find a way to keep those in place. So if they were able to get that past, I mean, even the House, which seems like is a, is a question mark, I mean — whatever could get through would absolutely face court battles from some of the same folks that challenged them during the Trump administration.

Kenen: But I think the only one that actually went into effect was Arkansas. And in addition to it being thrown out by a court, it also just didn’t work. The mechanism didn’t work. It became really hard for people. The verification that you’re working, which this proposal actually addresses, that Mary Agnes just alluded to that, the verification was extraordinarily cumbersome. I mean, you had like lots of poor people in Arkansas — and rural Arkansas don’t have access to Internet — and you only had a few hours a day where you could use the portal and you have to leave work to go to the local library to prove that you were working. I mean, it was just — forget the ideology of it — the mechanics didn’t work, and people were thrown off even though they were compliant. And but this [is] just like a deep philosophical divide between the two parties, and they have compromised, and back in the Clinton years they compromised on welfare, what’s now called TANF [Temporary Assistance for Needy Families]. There’s work requirements for SNAP, for what we used to call food stamps. But Medicaid has been a red line for Democrats, that this is an entitlement based on health; it’s not like you deserve — some people deserve it and some people don’t. It’s been a philosophical, ideological, you know, something that Democrats feel very strongly about.

Cohrs: Oh, I just want to jump in on the covid money as well — much smaller deal, fewer impacts on patients — but it has been kind of interesting and over the last couple of weeks that the Biden administration has rolled out some new programs that cost quite a bit of money, as there’s this horizon, this call for Congress to claw back unspent covid funds. I mean, they’re spending $5 billion now on developing vaccines and therapeutics, $1 billion on vaccine access, when they said they didn’t have any money. So it’s just kind of interesting that, you know, when these funds are committed to a program legally, then Congress can’t claw them back. So I’m curious to see what else we’ll see as these negotiations solidify.

Carey: All right. We’ll keep our eye on it. And I want to just check in briefly on the Senate side. I know we’ve discussed these issues on the podcast before. The Senate Health, Education, Labor and Pensions Committee has been working on legislation focused on drug prices and pharmacy benefit managers. This morning we have a framework introduced from the Senate Finance Committee. It’s with Sen. Wyden, the chair from Oregon, who’s a Democrat, and Sen. Mike Crapo, Republican from Idaho, that also seeks to address PBMs in the prescription drug supply chain. We also have the moving, or maybe not moving, but introduce legislation, anything new there on insulin prices with Sen. Warnock and Sen. Kennedy to cap the out-of-pocket price at $35. Any movements there in the Senate, any insight you could offer?

Cohrs: On the Senate Finance [Committee] side, that is a very significant development, that they’ve decided to get in on the fun this week of putting together a package, just because their committees do have jurisdiction over so much federal spending. And Sen. Wyden has been involved in this issue. He’s put out — I found a package of bills from 2019, and, you know, he’s been on this issue a long time. So I think his team has proven they can craft big-picture, very impactful policy with the Inflation Reduction Act. So I think that’s certainly something to watch with that much federal spending on the line. And on insulin, you know, Sen. Schumer this week has committed to have some sort of insulin pricing provision in whatever package might come together — it’s still pretty amorphous — but it’s unclear what that’s going to look like. There is another proposal from Sen. Collins and Sen. Shaheen, two much more senior members of the caucus, and that mechanism works differently. For patients, it would look pretty similar. But on the back end, for insurers, for drugmakers, both of those programs would work differently. So they haven’t sorted that out yet. HELP hasn’t even picked a date for their hearing and formally announced it yet. So we are in early stages, but there’s certainly a lot swirling around.

Carey: Absolutely. And we’ll keep our eye on all of that as well. So I’d like to also chat a little bit about some ACA developments that happened this week. President Biden recently announced that hundreds of thousands of immigrants brought to the United States illegally as children will be able to apply for Medicaid and the Affordable Care Act’s health insurance exchanges. This allows participants in the Obama-era Deferred Action for Childhood Arrivals program, also known as DACA, to access government-funded health insurance programs. You can expect pushback from conservative leaders of states that have been reluctant to expand Medicaid, possibly also pushback from Republican members of the Hill on this provision. And then, in other ACA news, the administration has finalized new rules that are aimed at making it easier for consumers to sign up for ACA plans, in particular those who are losing their coverage through Medicaid or the Children’s Health Insurance Program. The Centers for Medicare & Medicaid Services, also known as CMS, will also give state marketplaces the option to hold a special enrollment period for people who lose their Medicaid or CHIP coverage. What could this possibly mean for enrollment in the program, right, to making it easier for DACA participants to enroll in the ACA or people losing their coverage through CHIP or Medicaid? I think it’s about 16 million people now in the program. Does this build more support for it? Are Republicans going to engage against it? Do they think that’s simply a losing battle because they’ve never agreed on an alternative?

Raman: I mean, right now, we’ve had historic levels of people in Medicaid and CHIP just because states have been unable to unenroll them from coverage during the public health emergency for covid. And now that states are starting to recheck their rolls and see who’s still eligible, who’s not eligible, we’ve been expecting just, you know, a big drop in different people that would be either getting uninsured or maybe moving to a different type of plan with a private or the exchanges. And I think it’s been something that, you know, states and the federal government have been working on for the entire time of just, you know, different ways to make sure that that drop-off in the number of uninsured folks doesn’t skyrocket as states are going through this process. And so I think the timing is important in that, you know, you’re trying to counteract the drop. And HHS [the U.S. Department of Health and Human Services] has been touting, you know, the high levels of uptake in the ACA and just like the low uninsured rate and this has been something they’ve just kind of been pushing, you know, month after month. This has been something that has been like a big achievement for them. And so now really like push comes to shove to say that, you know, it doesn’t drop off dramatically if you want to continue touting some of these achievements and making sure that people don’t drop off just because the emergency is ending and that guaranteed coverage isn’t there.

Kenen: So there are multiple issues in the question that are exposed, the DACA, which —

Carey: Of course it can’t be just one question I have to ask four at once.

Kenen: The DACA, which is also known as the Dreamers, Biden is trying to cover them. Democrats have been trying to give them legal status and got nowhere. In fact, they’re probably further away from that than they were five or six years ago. But to get them health coverage is something the Democrats — it’s like the least they can do to this population. But I can’t imagine there’s not going to be a political and/or a legal fight from the states who are going to have to pay for their share of it, right? I mean, Medicaid is a state-federal joint expenditure, and the states that don’t want to cover these people will well resist or sue. Or, I mean, everything ends up in court; I would imagine this will, too, or baked into the debt ceiling — you know, one more thing to fight about with the debt ceiling. So that’s one issue. I mean, the other issue is this unwinding of this huge Medicaid population. Most of these people are going to be eligible for some kind of coverage. Some of them are still going to be eligible for Medicaid. Some of them are going to be eligible for very good deals for sort of low-income working people on the ACA. And some have jobs that they can get insured through — theirs or a partner or a family member. But really, the only ones who are ineligible for anything would be those in the remaining Medicaid gap states. But that’s like theoretically, if we did everything right, the only people that would be ineligible are the Medicaid gap population, which is now down to about 10 states, assuming North Carolina, you know, finalizes their approval or, you know, enacts their expansion. But like, that’s the perfect world, and we don’t live in a perfect world. I mean, some of these people are going to get lost in the shuffle. And in fact, maybe several million; their estimates are like maybe 6 million, you know, no one knows. But, you know, our health care system is complicated. You know, getting a letter in the mail saying, you know, “Sayonara, Medicaid,” is not all of them will know how to negotiate new coverage even when they’re eligible, and we’re going to have to do a really good job of helping them. And that has to be from the federal government, from the state governments, from the health system itself, from advocates, from Congress. You know, everyone’s going to have to pitch in to get these people what they’re eligible for. And I don’t see that as an overnight success story. I think that there are people who should be covered and can be covered who won’t be covered. Eventually we’ll probably catch up and most of them enrolled. But I think that some of them have periods of uninsurance.

Carey: It’s absolutely a major undertaking. I know we’ll all be watching closely. OK, that’s the news for this week. Now it’s time for our extra credit segment. That’s when we each recommend a story we read this week and think you should read it too. As always, don’t worry if you miss it. We’ll post the links on our podcast page at kffhealthnews.org and in our show notes on your phone or other mobile device.

Kenen: I actually want to read the first sentence of this piece. This is a guest essay in The New York Times by Amy Silverstein. She’s a heart transplant recipient. She’s, I guess, about 60 now, and she’s about to die, not because her heart, her transplanted heart is failing — she writes about how she kept that in pristine condition — but because she’s got cancer. And it’s called “My Transplanted Heart and I Will Die Soon,” and it begins, “Today, I will explain to my healthy transplanted heart why, in what may be a matter of days or weeks at best, she — well, we — will die.” And in addition to being just a heart-tugger, I did not know a lot of what she explores about transplant medicine, that we think of transplants as medical miracles — and they are; you know, she had like an extra 35 years of life — but they’re also, transplant medicine itself hasn’t really, according to what she writes, transplant medicine itself — the drugs, the care they get, these heavy-duty drugs haven’t improved in 40 years. While she has a healthy heart, she has metastatic lung cancer because of these drugs. The medical care around transplant can be quite dangerous. And I knew nothing about that, and I’ve covered health for a long time. So it’s a tragic story and it’s also a scientific failure or a medical system or a medical research failure story that I hope a lot of people who have the power to change it read.

Carey: Sandhya, what’s your extra credit?

Raman: So my extra credit is from ABC News. It’s called “Puerto Rico’s Water Supply Is Being Depleted, Contaminated by Manufacturing Industry on the Island, Experts Say.” It’s a triple byline from Jessie DiMartino, Lilia Geho, and Julia Jacobo. And I thought their story was really interesting because it looks at the effects of the manufacturing industry on the water supply in Puerto Rico. The manufacturing there is, in Puerto Rico, is really high because there used to be a tax incentive that’s now lapsed to create a huge boom in manufacturing in the ’60s and ’70s. And kind of looking at the impacts of that, and over time and to the environment, and pharma manufacturing in particular, is 65% of what has been the industrial groundwater withdrawals. So in areas that rely heavily on groundwater on an island, this is felt especially hard. And so they go through a lot of the implications of some of that and how the manufacturing affects it, especially in an island with a finite water supply.

Carey: Rachel.

Cohrs: Mine is, the headline is, “‘I Hate You, Kathie Lee Gifford!’ Ozempic Users Report Bizarre Dreams,” in The Wall Street Journal and by Peter Loftus. Our newsroom has been covering the weight loss drug explosion this year, and I think this story was just so colorful and just a great example of reporting on the side effects that emerge when so many people are interested or want to take a drug. And I think there is certainly a public service to people understanding what they’re getting into and just hearing from all sorts of people, because certainly there are agencies who are supposed to be doing that. But I think there’s also just a lot of buzz that’s fascinating. The writing was just so rich and bizarre. And yeah, it was a great read and a great illustration on it, too.

Carey: Well, speaking of weight loss and getting fat out of our bodies, my story is from The New York Times, called “A Beauty Treatment Promised to Zap Fat. For Some, It Brought Disfigurement,” by Anna Kodé, and I hope I’m pronouncing your name correctly. You might have heard or seen all these ads about the treatment called CoolSculpting. It uses a device on a targeted part of the body to freeze fat cells. Patients typically undergo multiple treatments in the same area, and in successful cases, the cells die and the body absorbs them. “But for some people,” Anna writes, “the procedure results in severe disfigurement. The fat can grow, harden and lodge in the body, sometimes even taking on the shape of the device’s applicator.” The manufacturer says this is a rare side effect, but a Times investigation that drew on internal documents, lawsuits, medical studies, and interviews indicates the risk to patients may be considerably higher. So that’s our show. As always, if you enjoyed the podcast, you can subscribe wherever you get your podcasts. We’d appreciate it if you left a review; that helps other people find us too. Special thanks, as always, to our ever-patient producer, Francis Ying. And as always, you can email us with your comments or questions. We’re at whatthehealth@kff.org. Or you can tweet me @maryagnescarey. Rachel?

Cohrs: @rachelcohrs.

Carey: Joanne?

Kenen: @JoanneKenen.

Carey: Sandhya.

Raman: @SandhyaWrites.

Carey: We’ll be back in your feed next week. Until then, be healthy.

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In 2014, Lisa French had spinal surgery. Before the operation, she was told she would have to pay $1,337 in out-of-pocket costs and that her insurance would cover the rest. However, the hospital ended up sending French a bill for $229,000. When she didn’t pay, it sued her.

The case went all the way to the Colorado Supreme Court. In this episode of “An Arm and a Leg,” host Dan Weissmann finds out how the court ruled and how the decision is reshaping the fine print on hospital bills in ways that could cost patients a lot of money.

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Transcript: A $229,000 Medical Bill Goes to Court

Note: “An Arm and a Leg” uses speech-recognition software to generate transcripts, which may contain errors. Please use the transcript as a tool but check the corresponding audio before quoting the podcast.

Dan: Hey there–

Lisa French was a clerk for a trucking company in Denver. She’d been in a car crash, and her doctor told her that to keep her spine stable, she ought to get surgery.

She asked the folks at the hospital what it was gonna cost her, out of pocket. They ran her insurance and told her: Your end is going to be one thousand, three hundred thirty-six dollars, and ninety cents.

She said, thanks.

Then, she and her husband sat down at their kitchen table and talked it over: They had a rainy-day fund. A thousand dollars they’d socked away, they kept it at home, in cash. Were they ready to spend it all for this? 

They decided they were, and Lisa went to the hospital with a thousand dollars cash. 

She had the surgery, it went fine. The hospital had been expecting about 55 thousand dollars from Lisa’s insurance. They actually got more like 74 thousand.

But they decided that wasn’t enough. They decided they wanted their full sticker price: 303 thousand dollars. So they billed Lisa French for the rest: 229 thousand dollars.

And when they didn’t get it, they sued her.

Lisa French had her surgery in 2014. The court case finally got resolved last year, in 2022, by the Colorado Supreme Court.

If you’ve been listening to this show for a while, you probably remember: We have gotten VERY interested in understanding, when we get a wild medical bill, what legal rights do we have? How can we use those rights to fight back? Even on a small scale, like in small claims court? 

And even though Lisa French’s case is a LONG way from small claims court, it has a LOT to teach us about these questions.

This is An Arm and a Leg, a show about why health care costs so freaking much, and what we can maybe do about it. I’m Dan Weissmann. I’m a reporter, and I like a challenge. So our job on this show is to take one of the most enraging, terrifying, depressing parts of American life, and bring you something entertaining, empowering, and useful.

And I should say upfront: We won’t be hearing from Lisa French directly.

Her case made a lot of headlines– in 2018, when a jury heard it, in YEAR when an appeals court overturned the trial court, and last year when the state supreme court made its ruling.

Not in the kind of detail that we’re gonna go into, but come on: Who can resist the headline?

Male Anchor: Well, tonight we have a story of David versus Goliath. David being a woman who needed spinal surgery in 2014 Goliath, the hospital that charged her more than $200,000 to do it.

Dan: So over the years, a lot of reporters wanted a sound bite from Lisa French. Her attorney used to let her know when there was an inquiry, and she’d say yes or no.

Eventually, she told her lawyer: Don’t even tell me when they call anymore. I just want to live my life.

Fair enough.

So here’s who we’ve got.

Ted Lavender: I’m Ted Lavender. I’m an attorney in Atlanta, Georgia. I’ve been practicing law for 26 years,

Dan: And he spent several of those years representing Lisa French.

It’s probably worth answering one question up front: If Lisa French had to empty her family’s rainy-day fund to pay the hospital a thousand bucks, who’s paying the lawyer from Atlanta?

The insurance from her job. Which had played a role in starting the whole mess.

Ted Lavender: the company that she worked for had a health benefits plan that was slightly different than what you might call run of the mill health insurance.

Dan: It worked this way: They weren’t in-network with any hospitals. Instead, they’d just take whatever bill any hospital sent, make their own evaluation of what a fair price would be, and send the hospital a check.

It’s a somewhat unusual model– one survey says about 2 percent of employers use a plan like this– but Ted Lavender says it often works.

Ted Lavender: a very large percentage of the time , the hospital would accept the check and no one would hear anything more from the hospital, which in legal parlance would mean acceptance

Dan: And as a backstop, in case there was any trouble, the health plan would send a lawyer. That’s Ted.

And here’s what happened that led to all the trouble in Lisa French’s case: Whoever ran her insurance card at the hospital, they didn’t read it very carefully.

If they had, they would’ve seen a little logo under the insurance-company name that said, “provider only” — that is: This plan only has doctors and nurses and other PROVIDERS in network.

With hospitals, there’s no network, no “in-network rate.” We’ll just send a check for what we think is right.

The same health-benefits company has a different plan, one that does have a hospital network. You know how it is. Insurance companies, a million different plans, every one its own snowflake.

The hospital mistook Lisa French’s snowflake for another one, and that’s how they came up with that estimate.

Ted Lavender: based on their calculation, they expected to collect a total of

$56,000, the 1,336 from Ms. French and the remainder from her health plan.

Dan: And they presumably would’ve been happy with 56 thousand. But they got more. They got about 75 thousand dollars.

But once they got it, they wised up to the mistake they had made about Lisa French’s insurance. They had no agreement with the insurance plan to accept 56 thousand.

So, they decided: There’s no reason for us not to charge our full sticker price here.Three hundred and three thousand dollars.

So Lisa French had been expecting a bill for three hundred thirty-six dollars and ninety cents. That’s the difference between what she’d been quoted and the thousand dollars she’d paid in advance. But the bill she got wasn’t what she expected.

Ted Lavender: it turned out to be a whopper of a bill. We ended up with an itemized bill that showed every line item for every charge that totaled this

$303,000

And then at the bottom was, you know, subtracting the thousand she paid, subtracting the money the insurance paid, leaving a balance of 229,000 and change

Dan: Of course, Lisa French did not have 229 thousand dollars, or anything like it.

Ted Lavender: Eventually she got a visit from the sheriff who served her with a lawsuit and she was sued for that $229,000.

Dan: And that’s where Ted Lavender entered the scene.

The jury trial in 2018 took six days. As Ted Lavender says, it wasn’t exactly a splashy murder trial, in terms of drama.

Ted Lavender: this was a six day trial involving hospital billing. So, you know, there was no murder weapon. There was no aha, big, gotcha moment that was really exciting.

Dan: But Ted Lavender did his best. Like one time, when he got a hospital executive on the witness stand.

To stabilize Lisa French’s spine, surgeons had implanted 13 pieces of metal into her body. So Ted Lavender had the hospital executive walk the jury through the price for each of those bits of metal. Or actually, the prices..

Ted Lavender: And I first showed him the itemized bill and asked him to identify what they charged for these 13 pieces of hardware .

I had given him sort of an oversized calculator that was sitting there in front of him on the witness stand, admittedly, for some dramatic effect

And through adding these up on the itemized bill, he arrived at the number which was $197,000.

Dan: A hundred and ninety-seven thousand dollars. So that’s about two-thirds of the three hundred and three thousand dollars the hospital is trying to charge Lisa French.

And then the next thing I did was I handed in the 13 invoices that we had received from the hospital,

Dan: That is, Ted handed the guy the invoices the hospital had received — and paid — when it bought those bits of metal..

Ted Lavender: and I asked him to add up and tell this jury what did the hospital pay for these 13 pieces of hardware.

He’s adding, and he’s adding and he’s punching in numbers, and he’s turning pages and he’s adding, and he’s adding with each addition, with each plus the jury seemed to ease a little closer up to the front of their chair, and ultimately he arrived at the total, which was $31,000 and change.

Dan: So the hospital’s charging like six and a half times what they paid. And that’s two thirds of this 300 thousand dollar bill.

Ted Lavender: It just, you know, the jury seemingly did not like that.

Dan: So that was a good moment for Lisa French’s side. I mean getting the jury mad at the other side, that’s a win.

And the big calculator wasn’t Ted Lavender’s only visual: He also had a giant post-it note, where he wrote down, in magic marker, all the different prices the hospital accepted for the surgery, depending on who was paying.

Ted Lavender: and we got these numbers from the hospital, they would’ve accepted $146,000 from private insurance.

Dan: That’s less than half of what they were trying to charge Lisa French. And they accepted less than that — a LOT less — from government-funded insurance, like Medicare, Medicaid, or Tricare, which covers folks in the military.

Ted Lavender: The average of what they would’ve accepted for these. Procedures that Ms. French had were $63,199. Again, Ms. French and her insurance company combined paid almost $75,000.

Dan: You can hear that post-it rustling around. It was a good prop, he’s held onto it. So, he’d shown the jury that the hospital charged a HUGE markup, and that what they were suing Lisa French for was way, way more than they charged anybody else.

On the hospital’s side, they were like, Yeah, but this is our actual sticker price. And Lisa French signed a piece of paper that said she would pay “all charges of the hospital.”

So the hospital was like, yep, and these are our charges. That 303 thousand dollars, it comes from a list we keep. It’s called the chargemaster. That’s what Lisa French was signing up for.

And this became something the jury had to decide:

When Lisa French signed a piece of paper saying she’d pay “all charges of the hospital” — was she specifically agreeing to pay what was on the chargemaster?

And here’s one thing that might’ve made jurors a little skeptical on that score: The hospital never showed that chargemaster list to Lisa French. Not before her surgery, not after it. They said it was a trade secret.

Ted Lavender: they went all the way through trial. Never producing it though. We, we, we asked at the very beginning, once the lawsuit was filed, , basically you get to ask questions. Give me this information, give me information that supports your case or helps my case.

And we ask specifically for the charge master and they refuse to produce it on the basis that it was confidential and proprietary.

Dan: By withholding that list, the hospital may have helped Ted Lavender make his argument: How could Lisa French have known what she was signing up for, if she couldn’t see the prices?

Ted Lavender: if we can’t get it through our subpoena power, how in the world would Lisa Friendship been able to use it by, had she asked?

And admittedly she didn’t ask for it, but if she had, surely they wouldn’t have given it to her either.

Dan: In the end, the jury agreed: Lisa French had not specifically agreed to pay the hospital’s chargemaster prices.

And the only other alternative was: She agreed to pay something reasonable.

The jury decided she owed the hospital seven hundred seventy six dollars and 74 cents

Basically, that’s the three hundred and some left over from the original estimate, plus some extra — because she wound up staying in the hospital one night more than expected: She owed a fee for late check-out.

Of course the hospital did not take that lying down. They appealed the outcome– and won! Ted Lavender appealed that decision, which is how the case ended up in front of the Colorado Supreme Court.

We’ve actually got tape of those proceedings. They’re kinda juicy. Plus the outcome, and why it matters for the rest of us. That’s right after this.

This episode of An Arm and a Leg is produced in partnership with KFF Health News–formerly known as Kaiser Health News.

They’re a national newsroom producing in-depth journalism about health care in America. We’ll have more information about KFF Health News at the end of this episode.

OK, so Lisa French’s case was headed to the Colorado Supreme Court.

And here’s the big issue. Remember how the jury found that Lisa French hadn’t actually agreed to pay the hospital’s chargemaster price, the three hundred and three thousand dollars?

The hospital argued: The jury never should’ve been asked to consider that question.

The law — legal precedent — makes it open and shut: The appeals court had agreed. And it had cited other cases from courts around the country.

So when the hospital’s lawyer, Mike McConnell, got up to address the Supreme Court, he led with those citations.

Mike McConnell: All of the questions that you have raised have been addressed in more than a dozen cases around the country. carefully and thoroughly.

Justice Richard L. Gabriel: Well, let me push back on you. Good morning to you, Mr. McConnell.

Mike McConnell: Good morning.

Dan: This is Justice Richard L Gabriel, stepping right in. He notes that these dozen other decisions all rest on one original case, from 2008, where a court had said: We can’t intervene in health care pricing. Courts shouldn’t try. Health care is too complicated.

Justice Gabriel wasn’t convinced.

Justice Richard L. Gabriel: I guess the question I have is why, you know? I, you know, we may not be the smartest people in the world, but this is a contract and why should the hospital industry— different than any other industry on the planet —have different rules for contract principles?

Dan: The hospital lawyer argued that hospitals couldn’t predict everything that would happen in a patient’s care. In fact, the hospital can’t even control it: Only physicians can decide what treatment to order.

Mike McConnell: You can, uh, I guess imagine that hospitals ought to be able to predict in advance what a particular physician is going to order for a particular patient. Um, and, uh, perhaps, you know, obviously you feel that is the way it ought to be. It is not the way it is, but now

Justice Melissa Hart: Mr. Mr. McConnell, I’m sorry, to interrupt…

Dan: Here’s justice Melissa Hart breaking in

Justice Melissa Hart: …the hospital did provide an estimate in this case. They did calculate what they thought this was going to cost and tell her that. So it is, it seems false to me that they can’t do it. Of course, they can’t predict with absolute certainty. In this case, she had the extra night stay in the hospital and she paid for that. But they can predict in a case like this, and they do.

Dan: The justices didn’t seem super-persuaded by McConnell’s response to that. And that left one more big question in front of the justices.

When Lisa French signed a document promising to pay “all charges,” was she definitely agreeing to pay three hundred and three thousand dollars? Or 229 after insurance.

The appeals court found that the chargemaster rate — the 303 thousand — had been “incorporated by reference” to the document she’d signed, officially called the “hospital services agreement.”

The supreme court wasn’t convinced. Here’s Justice Richard Gabriel again.

Justice Richard L. Gabriel: There’s no reference to the charge master on the face of the hospital services agreement.

How could she have assented to something she never even knew existed?

Dan: And here’s how the hospital’s lawyer responded.

Mike McConnell: When she read the provision, all charges not otherwise paid by insurance. She understood that the hospital charges would, she was responsible for paying the hospital charges that her insurance company did it,

Justice Richard L. Gabriel: Whatever it was. They could have charged her a billion dollars and she’s your position to be she’s bound because she agreed. All charges means all charges.

Dan: Huh! There wasn’t a real comeback to that.

The Supreme Court ruled against the hospital, unanimously. Specifically, they ruled that the chargemaster– the 303 thousand dollars– had not been “incorporated by reference” to the piece of paper Lisa French had signed.

She didn’t know those chargemaster list prices even existed. How could she agree to pay them?

So that meant, the court ruled that, quote, “the hospital services agreements left the price term open.”

Which is language that may ring a bell, if you’ve been listening to this show. It’s a legal principle — a bedrock of contract law:

How the law treats an open-price contract — a contract that doesn’t specify a price term.

Here’s a refresher on that principle from Ted Lavender.

Ted Lavender: if you go to McDonald’s and order a, a quarter pounder with cheese and you know, value meal number three, they tell you the price and that is the price that you have to pay. And then they give you your meal.

You enter that contract with an actual price term

Dan: But you can also enter an open-price contract — a contract without a price term.

Ted Lavender: if you have a contract without a price term, without a specific price in it, then the law infer into that contract a reasonable price.

Dan: In other words, a contract with the price term OPEN is not a blank check. I don’t have to pay whatever number the other side makes up.

And that’s what the Colorado Supreme Court found here.

They ruled that, quote, “principles of contract law can certainly be applied to hospital-patient contracts.” They say, a court may have ruled otherwise in 2008, and other courts may have cited that opinion. We disagree.

The Colorado Supreme Court is saying, even in health care, when no price is specified– when the price term is open– you have the right to a reasonable price.

Yes!

And that’s why Lisa French’s case is so interesting to us, here on this show.

Because we’ve talked here about using this legal principle to fight back against outrageous bills.

We’ve heard from one guy, Jeffrey Fox, who actually took a hospital to small claims court to enforce his right to a reasonable price. And won.

We’ve heard from a listener who tried and failed, but said, more of us should try this.

And this Colorado decision seems like good news for anybody interested in doing something like that.

But honestly, it also raises a few concerns that I had not known about before. First:

Well, there ARE all those other cases out there, in other states, that follow the 2008 case, the one that says health care is too complicated for courts to get into.

And yeah, here’s Colorado saying, “No it isn’t.”

But courts in other states aren’t bound by Colorado’s decision. Hm. And second: there’s also something the Colorado court DIDN’T decide:

What if the paper Lisa French signed had specified, “I agree to pay the hospital’s CHARGEMASTER rates?” Could she be required to pay them then? Even if they were a billion dollars?

In their decision, The Colorado court wrote that the chargemaster rates are “increasingly arbitrary” and “inflated” and “have lost any direct connection to hospitals actual cost.”

So Ted Lavender thinks they might’ve said, No, we can’t be held to a billion dollars, just by adding the word “chargemaster.”

Ted Lavender: I think they would’ve answered that. No, but they did not come right out and actually answer that.

Dan: Because they didn’t HAVE to answer that question.

Ted Lavender: Courts routinely, in fact, it’s almost an objective of appeals courts. They answer as few a number of questions as possible to get to an answer. ,

Dan: So the Colorado court simpley ruled that in Lisa French’s case, the chargemaster rates weren’t “incorporated by reference” into papers she signed.

Those papers didn’t didn’t mention the chargemaster at all– and the hospital kept that chargemaster as a trade secret. Open, shut.

But… hospitals aren’t supposed to keep those rates secret anymore. For the last couple of years, thanks to an executive order from the Trump administration, federal rules have required them to post their chargemaster to the internet.

And so I had all that in mind when I heard from a listener in Atlanta.

Cindi Gatton: my name is Cindy Gatton and I’ve been an independent patient advocate for 11 years now.

Dan: Cindi’s job is helping people deal with medical bills, but she had actually written to me about her experience as a patient.

Before a medical appointment, she got the usual forms online, including one for “Patient Financial Agreement and Responsibilities”

Cindi Gatton: so I thought, you know what? I’m gonna print it and just see exactly what it says. And I’m reading through the thing it says, patient understands and agrees that he, she will be charge. The Piedmont Healthcare Standard charge master rates for all services not covered by a payer or that are self-pay.

I’ve never seen that before, and it shocked me that there was a reference to charge master rates in the financial disclosure.

Dan: And Cindi has been dealing with medical bills full-time for a decade. She’s seen a lot. So when she says it’s new, and that it’s shocking, that seems worth noting.

Cindi Gatton: it just feels wrong to me. It feels really wrong because it, it reminds me of, you know, you, you go to a website and they give you their terms and conditions. Nobody reads those. I don’t read them. You click yes so that you can move on with what it is you wanna do, which is to get care, to be seen by the doctor to, you know, have your procedure.

And I don’t know this, this feels, um, it feels manipulative to me

Dan: Yeah, and to me, it feels ominous. Like lawyers who work for hospitals have been paying attention to the Lisa French decision and thinking:

There’s a wedge here maybe we could exploit. Like, if we get you to sign a document that says “chargemaster” on it, we’re getting you to sign away your right to a reasonable price. After all, the court in Colorado didn’t come out and say that wouldn’t be kosher.

So, where I’m landing at the end of this story is: I’ve got a couple big homework assignments:

First, if I’m interested in seeing how we can use our legal rights to fight back against outrageous, unreasonable bills — and I am —

I need to learn more about which states recognize our rights to a reasonable price in health care, and which ones … maybe don’t. I’m on it, and if you’ve got any tips, please bring them.

That’s the first assignment, and for the second, I’d love your help: How many hospitals are using this “chargemaster” language these days in those financial responsbility documents they ask us to sign?

Do me a favor: See if you can get a copy of that document from any hospital system or doctor group where you get seen. And send me a copy of it?

Redact anything you need to. And also know: we’re not aiming to share this with anybody outside our reporting team.

Here’s what happened when I tried this.

A hospital where I get seen uses a portal called MyChart– a lot of hospitals use it. I just logged on to MyChart there, and I did a little digging around. I found a link to something called “My Documents.” And I found a form there called Universal Consent.”

It has stuff about financial responsibility.

It doesn’t mention chargemaster rates. But it’s a year old. It also says it’s expired.

And here’s an idea I got from Cindi, which I’m gonna try– and which seems worth passing around.

When Cindi found that chargemaster language in the document from her Hospital, here’s what she did. She printed it out and changed it:

Cindi Gatton: what I did is instead of the standard charge master rates, I drew a line through it and I wrote in two x Medicare rates.

Dan: In other words, instead of saying “I’ll pay the chargemaster rates,” it says, “I’ll pay two times the Medicare rate.”

We’ve heard about this strategy before, from former ProPublica reporter Marshall Allen, who wrote about it in his book, “Never Pay the First Bill.”

Here’s the rationale. Medicare pays less than most commercial insurance; hospitals say that at least sometimes they lose money on Medicare. Doubling it seems … generous enough. But it also sets a limit.

So that’s what Cindi wrote on her printout.

Cindi Gatton: I have been taking it with me when I go to be seen that if they ask me for the document that I can say, you know, here it is.

Dan: So far, she says, nobody’s asked for it.

And, I don’t think anybody will be confused, but just to make sure, I’ll say: This isn’t legal advice. I’m not a lawyer. Cindi’s not a lawyer.

She’s just a person going to the doctor, doing her best not to leave too many openings where she could get really screwed. And I’m gonna try following her example.

And I’ve got another request for you: If you try this trick of printing the thing out, exxing out the chargemaster language and writing 2 x medicare rates– LET ME KNOW WHAT HAPPENS, OK?

The place to do all this is on our website at arm and a leg show dot com, slash contact. That’s arm and a leg show dot com, slash, contact.

You are this show’s secret weapon. You’re our eyes and ears. Cindi Gatton’s a listener who got in touch.

How did I first learn about Lisa French’s case? Email from a listener. [Thank you, Terry N, for that note last year! Took us a minute, but we got to this.]

Thank you for listening. You absolutely rule. I’ll catch you soon.

Till then, take care of yourself.

This episode of An Arm and a Leg was produced by me, Dan Weissmann, with help from Emily Pisacreta, and edited by Afi Yellow-Duke.

Daisy Rosario is our consulting managing producer. Adam Raymonda is our audio wizard. Our music is by Dave Winer and Blue Dot Sessions.

Gabrielle Healy is our managing editor for audience. She edits the First Aid Kit Newsletter.

Bea Bosco is our consulting director of operations. Sarah Ballema is our operations manager.

An Arm and a Leg is produced in partnership with KFF Health News–formerly known as Kaiser Health News.

That’s a national newsroom producing in-depth journalism about health care in America, and a core program at KFF — an independent source of health policy research, polling, and journalism.

And yes, you did hear the name Kaiser in there, and no: KFF isn’t affiliated with the health care giant Kaiser Permanente. You can learn more about KFF Health News at arm and a leg show dot com, slash KFF.

Zach Dyer is senior audio producer at KFF Health News. He is editorial liaison to this show.

Thanks to Public Narrative — That’s a Chicago-based group that helps journalists and nonprofits tell better stories– for serving as our fiscal sponsor, allowing us to accept tax-exempt donations. You can learn more about Public Narrative at www dot public narrative dot org.

And thanks to everybody who supports this show financially.

If you haven’t yet, we’d love for you to join us. The place for that is arm and a leg show dot com, slash support.

Thank you!

“An Arm and a Leg” is a co-production of KFF Health News and Public Road Productions.

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USE OUR CONTENT

This story can be republished for free (details).

[UPDATED on April 18]

The new drug looked so promising — except for that one warning sign.

At the American College of Rheumatology’s annual meeting in 2008, Duke University’s Dr. John Sundy proudly announced that pegloticase, a drug he’d helped develop, was astoundingly effective at treating severe gout, which affects perhaps 50,000 Americans. In about half of those who had taken it, the drug melted away the crystalline uric acid deposits that encrusted their joints to cause years of pain, immobility, or disfigurement.

But Sundy also disclosed an unsettling detail: In one clinical trial, patients who got the drug were more likely to develop heart problems than those who didn’t. The day after Sundy’s talk, the stock price of Savient Pharmaceuticals, which developed the drug with Duke scientists, plunged 75%.

That danger signal would disappear in later studies, and the FDA approved pegloticase, under the trade name Krystexxa, two years later. But the small biotech company never recovered. In 2013, Savient was sold at auction to Crealta, a private equity venture created for the purpose, for $120 million.

Two years later, a young company now called Horizon Therapeutics bought Crealta and its drug portfolio for $510 million.

Even at that price, it proved a good deal. Krystexxa brought in $716 million in 2022 and was expected to earn $1 billion annually in coming years.

Although Horizon says it now has 20 drugs under development, in its 15 years of existence it has yet to license a product it invented. Yet the company has managed to assemble a war chest of lucrative drugs, in the process writing a playbook for how to build a modern pharmaceutical colossus.

As the White House and both parties in Congress grapple with reining in prescription drug prices, Horizon’s approach reveals just how difficult this may be.

Horizon’s strategy has paid off handsomely. Krystexxa was just one of the many shiny objects that attracted Amgen, a pharmaceutical giant. Amgen announced in December that it intends to buy Horizon for $27.8 billion, in the biggest pharmaceutical industry deal announced in 2022.

Horizon’s CEO, Tim Walbert, who will reportedly get around $135 million when the deal closes, has mastered a particular kind of industry expertise: taking drugs invented and tested by other people, wrapping them expertly in hard-nosed marketing and warm-hued patient relations, raising their prices, and enjoying astounding revenues.

He’s done this with unusual finesse — courting patients with concierge-like attention and engaging specialist clinicians with lunches, conferences, and research projects, all while touting his own experience as a patient with a rare inflammatory disease. Walbert’s company has been particularly adept at ensuring that insurers, rather than patients, bear the costly burdens of his drugs.

A federal prosecutor in 2015 began examining allegations that Horizon’s patient assistance program had worked with specialty pharmacies to evade insurers’ efforts to shun Horizon’s expensive drugs. A separate probe opened in 2019 over alleged kickbacks to pharmacy benefit managers, companies that negotiate to get Horizon’s drugs covered by insurers. Those investigations appear to be no longer active, Horizon spokesperson Catherine Riedel said. The company this year disclosed a third probe, concerning methods the company allegedly used to get prior authorization of its drugs. Justice officials did not respond to requests for comment on the investigations.

An Injection of Marketing

To help sell its drugs, Horizon blankets specialist physicians with marketing and peer-to-peer appeals. Its payments to physicians for things like consulting, speeches, and meals totaled $8.7 million in 2021, compared with the $10 million it paid them for research, federal records show. By contrast, Seagen, a biotech company of roughly the same size, paid doctors a total of $116 million, with nearly $112 million of that pegged for research. Riedel said Horizon’s marketing and educational approaches were “necessarily unique” because of the challenges of treating rare and neglected diseases.

Walbert launched Horizon in 2008 in the Chicago area by combining and refashioning generic drugs into single pills. Duexis, Horizon’s first drug, is a mixture of generic Motrin and Pepcid. Its Vimovo combines generic Aleve and Nexium. In a 2017 article, a ProPublica reporter described being prescribed Vimovo for a shoulder injury. It cost him nothing, but his insurer was billed $3,252 for pills that together cost about $40 for a month’s supply in generic form. Horizon sold more than $57 million worth of Vimovo that year.

In 2014 and 2015, respectively, Horizon picked up two relatively new drugs that had no generic versions: the immunosuppressant Actimmune and Ravicti, which treats a rare genetic disorder. Soon Horizon was charging more than $50,000 a month for each, placing Actimmmune fourth and Ravicti second on GoodRx’s 2020 list of the most expensive U.S. drugs.

Horizon’s net sales soared from $20 million in 2012 to $981 million in 2016; Walbert’s pay package followed suit, topping an astronomical $93.4 million in 2015 in salary and stock. Stock analysts questioned the long-term soundness of a strategy of simply selling old drugs for mind-boggling prices, but Walbert was using the cash to refashion the company as a rare-diseases franchise.

His approach would make Walbert a darling of pharmaceutical investors and his board, which lavished him with over $20 million in compensation each of the past three years. While most biotechs and startups borrow heavily from venture capital to do science and have no idea how to develop and market a drug, Walbert got cash coming in quickly. “He did it backwards,” said Annabel Samimy, an analyst at Stifel Financial Corp. “Horizon built commercial platforms before they got into drug development.”

Generating “robust sales of what sounded like not very interesting drugs” allowed Walbert “to start a company on not very much,” said Oppenheimer analyst Leland Gershell. All the while, Horizon funded and cultivated the patient advocacy groups that can help lobby for a drug to be approved by the FDA and placed on insurers’ formularies, the lists of drugs health plans cover for patients.

Speaking From Experience

As Walbert and his spokespeople often point out, Walbert and his youngest son suffer from a rare disease, and Walbert also has an autoimmune disease. Walbert won’t name the diseases, but has said he’s taken the anti-inflammatory injectable Humira since 2003 — the year he led that drug’s commercial launch as a vice president at Abbott Laboratories. Humira has become the bestselling drug in history, with about $200 billion in all-time global sales.

In 2014, Walbert moved Horizon’s headquarters to Ireland, which nearly halved its tax rate. A year later it gained control of Krystexxa, and in 2017 it bought, for $145 million, a failing company that produced Tepezza, a drug for thyroid eye disease, which causes unsightly eye bulging and pain.

Tepezza quickly became a blockbuster, with $3.6 billion in total sales in 2021 and 2022. The company conducted additional clinical research on both Tepezza and Krystexxa, but it also spent heavily promoting these and other drugs to specialists who could prescribe them.

All the while it steadily raised prices. Savient put Krystexxa on the market in 2011 at $2,300 per injection. Horizon charges roughly 10 times as much. Six months of Tepezza treatment can run more than $400,000.

Horizon’s publicity emphasized the company’s sensitivity to patients, and its constant contact with disease advocates.

“Our scientists are attuned to the unmet needs of patients, their diagnostic and therapeutic journey,” Bill Rees, Horizon’s vice president for translational sciences, told KFF Health News. “It’s the marrying of the basic clinical science with a focus on the needs of the patient that differentiates us.”

To make sure patients keep using its drugs, clinicians say, Horizon staffers negotiate with insurance carriers, and the company offers drug discounts to lower-income patients while swaddling them with attention from its medical staff.

“Horizon has a nurse talk to each and every patient before every appointment,” said Dr. Brigid Freyne, who treats around half a dozen patients each year with Krystexxa at her Murrieta, California, rheumatology clinic. “The patients who come in here are highly motivated to get their IV. They get the message that it’s very important and they are fortunate to get the medicine.”

None of the manufacturers of her other infusion drugs shower patients with this kind of attention, she said.

While at Abbott, Walbert pioneered direct-to-consumer advertising for specialty drugs like Humira, a trend that aggravated insurers, who anticipated, correctly, that they would soon be shelling out billions for expensive drugs.

Horizon’s marketing plan for Krystexxa includes direct-to-consumer ads aimed at driving patients to specialists. The drug is designed for recalcitrant gout patients, who often have large lumps on their fingers, feet, and kidneys. Many, though not all, are heavy drinkers of beer or soda sweetened with high-fructose corn syrup, which can increase the buildup of uric acid, the cause of gout, said Dr. Robert McLean of Yale University.

While Krystexxa can help patients with advanced gout, the American College of Rheumatology views it as a drug of last resort, with plenty of cheaper, early intervention alternatives available.

“I prescribe it maybe once a year,” McLean said. “From a cost-effectiveness standpoint, it warrants questioning.”

Horizon recently started a publicity campaign addressed to all gout sufferers, urging them to see a rheumatologist or a nephrologist — the specialists it has targeted with Krystexxa educational materials — before the disease does too much harm.

“Horizon would like you to say, ‘Everyone with serious gout should be started on Krystexxa,’” said Dr. James O’Dell, a rheumatologist at the University of Nebraska Medical Center. The Horizon pitchmen he deals with are “nice guys, but we don’t believe that’s the best way.”

The company defends its marketing practices. “We learn what matters most to patient communities and act. This approach has been validated by independent third-party research,” said Riedel.

The Federal Trade Commission said in January it was seeking more information on the Amgen-Horizon merger. Sen. Elizabeth Warren (D-Mass.), citing high prices for Horizon and Amgen drugs, urged the agency to nix the deal.

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Dieciocho meses después de que April Adcox se enterara de que tenía cáncer de piel, el pasado mes de mayo, regresó por fin a la Universidad Médica de Carolina del Sur en Charleston para recibir tratamiento.

Para entonces, la zona rojiza a lo largo de la línea del cabello había pasado de ser un círculo de 2 pulgadas a cubrirle casi toda la frente. Supuraba líquido y le dolía.

“La verdad es que esperaba morir de esto, porque pensaba que eso era lo que tenía que pasar”, afirmó la mujer de 41 años, madre de tres hijos y residente en Easley, Carolina del Sur.

Adcox se había reunido por primera vez con los especialistas del centro médico a finales de 2020, después de que una biopsia diagnosticara un carcinoma basocelular. La operación para extirpar el cáncer requeriría varios médicos, le dijeron, incluido un neurocirujano, debido a lo cerca que estaba de su cerebro.

Pero Adcox no tenía seguro. Había perdido su trabajo en una fábrica de automóviles en los primeros días de la pandemia y, en el momento del diagnóstico, sentía pánico ante la complejidad de la operación y la perspectiva de una factura elevada. En lugar de seguir el tratamiento, intentó camuflar la zona cancerosa en expansión durante más de un año con sombreros y flequillos largos.

Si hubiera padecido cáncer de mama o de cuello uterino, probablemente habría tenido derecho a cobertura por una ley federal que amplía el Medicaid a los pacientes de bajos ingresos diagnosticados con esos dos tipos de cáncer.

Para las mujeres con otros tipos de cáncer, así como para casi todos los hombres, las opciones son escasas, especialmente en Carolina del Sur y los otros 11 estados que aún no han implementado la expansión de Medicaid, según oncólogos y expertos en política sanitaria que estudian el acceso a la atención.

Los estudios demuestran que, a veces, los adultos sin seguro retrasan la atención, lo que puede perjudicar las probabilidades de supervivencia. Pero que los pacientes obtengan un seguro para cubrir el tratamiento se parece un poco al juego de la ruleta, es decir, depende de dónde vivan y del tipo de cáncer que padezcan.

“Es muy aleatorio; creo que eso es lo más desgarrador”, afirmó el doctor Evan Graboyes, cirujano de cabeza y cuello, y uno de los médicos de Adcox. “Vivir o morir de cáncer no debería depender del estado en el que vives”.

La Ley de Cuidado de Salud a Bajo Precio (ACA) dio a los estados la opción de ampliar Medicaid para cubrir a más personas. Poco después de la aprobación de la ley, sólo el 2,6% de los adultos de 18 a 64 años con un nuevo diagnóstico de cáncer carecían de seguro en los estados de Medicaid ampliado frente al 7,8% en los estados sin expansión, según un estudio publicado en JAMA Oncology en 2018.

Investigadores de la Sociedad Americana del Cáncer, que realizaron el análisis, estiman que unas 30,000 personas sin seguro son diagnosticadas con cáncer cada año.

Pero en todos los estados, los pacientes sin seguro, de bajos ingresos, con cáncer de mama o de cuello uterino pueden obtener cobertura, incluso si no califican para Medicaid.

Los adultos con cáncer detectado a través del Programa Nacional de Detección Temprana de Cáncer de Mama y de Cuello Uterino pueden inscribirse en Medicaid durante la duración de su tratamiento contra el cáncer, gracias al activismo y la legislación federal que comenzó hace más de tres décadas.

En 2019, se inscribieron 43,549 pacientes con estos tipos de cáncer, según un informe de la Oficina de Rendición de Cuentas del Gobierno (GAO) publicado en 2020.

“Si te diagnostican cáncer de mama o de cuello uterino, tienes suerte”, dijo la doctora Fumiko Chino, oncóloga radioterapeuta del Memorial Sloan Kettering Cancer Center de Nueva York, que estudia el acceso y los costos del tratamiento del cáncer. “De no ser así, puedes enfrentar obstáculos importantes”.

El importe total facturado a la aseguradora durante el año siguiente a un diagnóstico de cáncer puede ser abultado. Por ejemplo, los costos en 2016 ascendieron a un promedio de $168,730 por cáncer de pulmón y $137,663 por cáncer colorrectal, según un estudio de 2022 que calculó las reclamaciones a la aseguradora por varias neoplasias malignas comunes diagnosticadas en pacientes con seguro privado.

Dado que los adultos sin seguro pueden tener dificultades para pagar la atención preventiva, su cáncer puede no ser identificado hasta que esté avanzado, por lo que es más costoso para el paciente y el sistema de salud, explicó Robin Yabroff, autor del estudio en JAMA Oncology y vicepresidente científico de la Sociedad Americana del Cáncer.

Los pacientes que no pueden obtener ayuda financiera a través de un centro de la red a veces acumulan deudas médicas, utilizan tarjetas de crédito o lanzan campañas de recaudación de fondos en internet, dijo Yabroff. “Nos cuentan historias de personas que hipotecan sus casas para pagar el tratamiento del cáncer”.

Los pacientes de cáncer pueden adquirir un seguro a través del mercado de seguros de salud de ACA. Pero a menudo deben esperar hasta el período de inscripción regular al final del año, y esos planes de salud no entran en vigor hasta el comienzo del año siguiente.

Esto se debe a que la ley federal fue diseñada para animar a la gente a inscribirse cuando están sanos, lo que ayuda a controlar los costos, señaló MaryBeth Musumeci, profesora de política y gestión de la salud en la Universidad George Washington en Washington, DC. Si un nuevo diagnóstico te calificara para la nueva cobertura, dijo, “entonces se incentivaría a la gente a permanecer sin seguro mientras están sanos y piensan que no van a necesitar cobertura”.

Mientras tanto, el acceso a la cobertura de Medicaid para pacientes de bajos ingresos con cáncer de mama y de cuello uterino, es una historia de éxito que se remonta a una ley de 1990 que creó el programa nacional de cribado de mama y cuello de útero. Las mamografías empezaron a recomendarse de forma generalizada en la década de 1980, y los activistas presionaron para llegar a más personas desfavorecidas, explicó Katie McMahon, directora de políticas de la Red de Acción contra el Cáncer de la Sociedad Americana del Cáncer.

Sin embargo, una investigación demostró que algunos adultos sin seguro tenían dificultades para recibir atención por los cánceres detectados a través de los cribados, dijo McMahon. Una ley del año 2000 permitía a los estados extender Medicaid a estas personas, y en 2008 los 50 estados y el Distrito de Columbia ya lo habían hecho, según el informe de la GAO de 2020.

Para otros enfermos de cáncer, una de las vías de cobertura que les quedan, según Chino, es reunir los requisitos para la discapacidad a través de la Administración de la Seguridad Social, tras lo cual pueden solicitar Medicaid. La agencia federal tiene una larga lista de criterios para los pacientes con cáncer. También cuenta con el programa Compassionate Allowances, (Beneficios por Compasión), que ofrece revisiones más rápidas para pacientes con determinadas afecciones médicas graves, incluidos cánceres avanzados o agresivos.

Aunque las normas varían, muchos pacientes no califican hasta que la enfermedad se ha extendido o el cáncer requiere al menos un año de tratamiento intenso, explicó Chino. Esto supone un dilema para las personas que no tienen seguro pero padecen cánceres curables.

“Para tener derecho a Medicaid, tengo que esperar a que mi cáncer sea incurable”, dijo, “lo cual es muy deprimente”.

Por ejemplo, el programa de Beneficios por Compasión no incluye el carcinoma basocelular, y sólo cubre el cáncer de cabeza y cuello si se ha extendido a otras partes del cuerpo o no puede extirparse quirúrgicamente.

Adcox dijo que antes de su operación de 12 horas, el pasado mes de junio, su solicitud de ayuda económica a la Universidad Médica de Carolina del Sur estaba aún pendiente. Alguien del hospital calculó que su factura ascendería a $176,000 y le preguntó cuánto podía adelantar. Consiguió reunir $700 con la ayuda de sus seres queridos.

Pero pudo optar a una ayuda económica y no ha recibido ninguna factura, salvo de un proveedor externo de servicios de laboratorio. “Se acabó”, exclamó Adcox. Desde entonces ha recibido radioterapia y se someterá a más operaciones reconstructivas. Pero ya no tiene cáncer. “No me ha matado. No me mató”.

Aun así, no todo el mundo encuentra una red de seguridad.

Brian Becker, de El Paso, Texas, no tenía seguro ni trabajo cuando supo que padecía leucemia mielógena crónica en el verano de 2021, según contó Stephanie Gamboa, su ex mujer y madre de su hija pequeña. Su médico oncólogo le exigió un pago por adelantado, dijo, y tardó varios meses en pedir prestado el dinero suficiente.

Empezó la quimioterapia al año siguiente y, con el paso de los meses, perdió peso y se debilitó, volviendo a urgencias con infecciones y un empeoramiento de la función renal, explicó Gamboa. La última vez que su hija vio a su padre, “no podía levantarse de la cama. Era literalmente piel y huesos”, dijo Gamboa.

Becker inició los trámites para solicitar prestaciones por incapacidad. El mensaje de texto que envió a Gamboa, y que ella compartió con KHN, decía que la revisión de su solicitud comenzó en junio de 2022 y se esperaba que durara seis meses.

La carta de denegación, fechada el 4 de febrero de 2023, llegó más de un mes después de la muerte de Becker en diciembre, a los 32 años. Decía en parte: “Basado en una revisión de sus condiciones médicas, usted no califica para beneficios en esta reclamación”.

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Prashar, now 14, did a finger stick, saw her blood sugar was 127, and went back to the mat. For most people with diabetes, the target range is about 80-130, and up to 180 two hours after meals.

Prashar doesn’t have to check her blood sugar often. She wears a continuous glucose monitor, or CGM, that gives her blood glucose readings on her phone every five minutes. When she’s feeling differently than her CGM is showing, as on that March day at the gym, she checks her level by doing a finger stick.

But most of the time, she simply glances at her phone to see whether her numbers are trending low or high, which beats repeatedly pricking her finger, she said.

“I would hate it so much,” Prashar said. “It’s such a pain and it’s harder to see trends.”

Montana lawmakers are considering a bill that would require insurance companies to cover CGMs for people with Type 1 and Type 2 diabetes. Multiple studies and experts back up the effectiveness of the devices, showing better blood test results, fewer long-term complications, and a reduction in health care costs.

Studies show CGMs can greatly benefit people with Type 1 diabetes. There are also promising results for people with Type 2 diabetes, the more prevalent of the two types, but the research is limited compared with that on Type 1.

House Bill 758 has broad support from lawmakers, but it faces opposition from insurance companies and some providers. That opposition focuses on the cost, whether a CGM is medically necessary at all stages of diabetes, and the possibility that CGM manufacturers will raise their prices if there is an insurance mandate.

CGMs can be worn on the legs, stomach, or arms, and they stay in place with an adhesive patch. A thin tube goes under the skin and measures blood glucose levels from tissue fluid. The data is transmitted via Bluetooth to a phone or similar device. Instead of a finger prick, which provides a reading for a single point in time, a CGM gives the wearer a continuous stream of data.

According to GoodRx Health, CGMs can cost between $1,000 and $3,000 each year out-of-pocket.

Blue Cross and Blue Shield of Montana, the state’s largest insurer, estimates the bill, if passed, would cost the organization nearly $5 million a year, spokesperson John Doran said.

CGMs aren’t medically necessary in all circumstances, Doran said, and medical necessity should be determined through a partnership between provider and payer. But Doran said that he understands there are instances in which a CGM may be necessary and that Blue Cross already covers CGMs in those cases.

“These things are a convenience,” Doran said. “They provide you real-time information and there is some benefit to a person’s lifestyle to these monitors.”

Lawmakers in several states are considering bills to regulate coverage of CGMs, and Illinois’ governor signed one such bill into law last year.

A study published in the Journal of Diabetes Science and Technology in 2022 says about 30 million Americans have diabetes, a condition in which a person’s body can’t make enough insulin (as in Type 1) or use it effectively (as in Type 2). By 2030, the study estimated, 55 million people in the U.S. will have diabetes, with total medical and societal costs of more than $622 billion — a 53% increase from 2015. According to the American Diabetes Association, nearly 78,000 Montanans have been diagnosed with diabetes.

Various studies, diabetes educators, and health care providers say that CGMs can help people with diabetes reduce their A1C levels, a common measure of blood sugar levels used in diabetes management. Proper management can reduce complications from diabetes — like retinopathy, heart attack, and nerve damage — that lead to higher costs in the health care system through emergency room visits and hospitalizations.

Dr. Brian Robinson, an endocrinologist at St. Peter’s Health in Helena, said supplies for people with Type 1 diabetes are generally covered by insurance. When he considers recommending a glucose monitor for a patient, he said, the decision is driven by insurance rules that are informed by the American Diabetes Association’s standards of care.

“My patients are better because of CGMs, there’s no doubt about that,” Robinson said. But he noted the science doesn’t yet support his opinion that CGMs should be given to everyone with diabetes, no matter what.

Not all physicians, especially in endocrinology, agree that a person with Type 2 diabetes needs a continuous glucose monitor, Robinson said. But if a person needs a shot each day to manage diabetes, he said, that patient should have access to a CGM.

Lisa Ranes, manager of the diabetes, endocrinology, and metabolism center at Billings Clinic, said the benefits of a CGM are the same for people with Type 1 and Type 2 diabetes.

Many studies have shown that CGMs are just as effective for patients on lower quantities of insulin, like some people with Type 2 diabetes, as for people with Type 1 diabetes, who rely on insulin throughout the day.

“It gives patients that complete picture to help them make the decisions on what they need to do to keep their blood sugar safe,” Ranes said, giving examples like upping the frequency or dose of insulin, having some food, or exercising.

For people with Type 2 diabetes, Ranes said, CGMs could be helpful in early diagnosis. Type 2 diabetes is progressive, Ranes said, so the sooner it is under control, the better.

When Cass Mitchell, 76, was diagnosed with Type 2 diabetes over 30 years ago, her doctor told her that people with Type 2 diabetes don’t live long because they have a hard time managing their care.

Mitchell, who lives in Helena, warmed to finger pricks. But test strips were expensive, about $1 each at the time, she said.

About 10 years ago, she got a CGM. Mitchell went from testing maybe twice a day to looking at her blood sugar on an app 20 to 25 times each day. She said she’s more in tune with her diabetes and uses her device’s time-in-range reports — showing how often blood glucose stays within a set range — to make lifestyle changes.

Mitchell has lowered her A1C from around 11% to 7%. According to the ADA, the target for most adults with diabetes is less than 7%.

Mitchell’s device is covered under Medicare and supplemental insurance and would remain so with the passage of HB 758. She said if she had to pay out-of-pocket she wouldn’t be able to afford her CGM and that she was excited about the potential of the bill to give more people access to CGMs.

Dr. Hayley Miller, medical director of Mountain States Diabetes in Missoula, initially thought HB 758 sounded good, but now she isn’t so sure. She thinks the biggest risk of the bill passing is that prices for CGMs go up.

“It seems like I’m against it, but it really is, when insurance gets involved everything gets tricky,” Miller said.

Emma Peterson, a former diabetes educator for St. Vincent Healthcare in Billings and Providence Endocrinology in Missoula, said most people working in diabetes care think everyone diagnosed should just have a continuous glucose monitor.

“At the end of the day, both forms of diabetes and all the other many forms of diabetes have the same complications and still face the same struggles of trying to keep blood sugars in range,” Peterson said.

Keely Larson is the KHN fellow for the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Newspaper Association, and Kaiser Health News. Larson is a graduate student in environmental and natural resources journalism at the University of Montana.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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The Host

Julie Rovner
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Julie Rovner is chief Washington correspondent and host of KHN’s weekly health policy news podcast, “What the Health?” A noted expert on health policy issues, Julie is the author of the critically praised reference book “Health Care Politics and Policy A to Z,” now in its third edition.

Several states have begun the herculean task of redetermining how many of an estimated 85 million Americans currently receiving health coverage through the Medicaid program are still eligible. To receive federal covid-19 relief funds, states were required to keep enrollees covered during the pandemic. As many as 15 million people could be struck from the program’s rolls — many of whom are still eligible, or are eligible for other programs and need to be steered to them.

Meanwhile, the trustees of the Medicare program report that its Hospital Insurance Trust Fund should remain solvent until 2031, three years longer than it projected last year. That allows lawmakers to continue to put off what are likely to be politically unpleasant decisions, although they will eventually have to deal with Medicare’s underlying financial woes (and those of Social Security).

This week’s panelists are Julie Rovner of KHN, Alice Miranda Ollstein of Politico, Amy Goldstein of The Washington Post, and Rachel Roubein of The Washington Post.

Panelists

Alice Miranda Ollstein
Politico

@AliceOllstein

Read Alice's stories

Amy Goldstein
The Washington Post

@goldsteinamy

Read Amy's Stories

Rachel Roubein
The Washington Post

@rachel_roubein

Read Rachel's stories

Among the takeaways from this week’s episode:

• The Medicaid “unwinding” is likely to strip health coverage not just from millions of people who are no longer eligible for the program, but also from millions of people who still are. States are supposed to take their time reevaluating eligibility, but some are rushing to disenroll people.
• Another complication in an already complicated task is that many Medicaid workers hired during the pandemic have never actually redetermined Medicaid eligibility for anyone, because states had been required to keep people who qualified on the program.
• Grimly, some of the extra years of solvency gained in the Medicare Hospital Insurance Trust Fund are a result of pandemic deaths in the 65-and-older population.
• The Department of Health and Human Services has issued payment rules for Medicare Advantage Plans for 2024. The agency ended up conceding at least somewhat to private plans that for years have been receiving more than they should have from the U.S. Treasury. The new rules will work to shrink those overpayments going forward, but not try to recoup those from years past.
• The situation with “first-dollar coverage” of preventive services by commercial health plans is becoming a bit clearer following last week’s decision in Texas that part of the Affordable Care Act’s preventive services mandate is unconstitutional. Judge Reed O’Connor (who in 2018 ruled the entire health law unconstitutional) issued a nationwide stay on coverage requirements from the U.S. Preventive Services Task Force, saying it is a volunteer organization not subject to the oversight of the Health and Human Services secretary. The federal government is already appealing that ruling.
• But O’Connor’s decision is not quite as sweeping as first thought. He banned required coverage only of the task force’s recommendations made after March 23, 2010 — the day the ACA was signed into law. Earlier recommendations stand. O’Connor also did not strike preventive services recommended by the Health Resources and Services Administration and the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices, since those agencies are overseen by an official appointed by the president and confirmed by the Senate.
• In abortion news, the liberal candidate for a Supreme Court seat in Wisconsin, Janet Protasiewicz, defeated her conservative opponent to switch the majority on the court from 4-3 conservative to 4-3 liberal. That ideological shift is likely to preserve abortion rights in the state, and possibly stem the ability of the GOP legislature to continue to draw maps that favor Republicans.
• Meanwhile, states in the South are continuing to pull back on abortion access. The Florida legislature is moving rapidly on a bill that would ban the procedure after six weeks of pregnancy, while in North Carolina, a single legislator’s switch from Democrat to Republican has given the latter a supermajority in the legislature large enough to override any veto of the Democratic governor, Roy Cooper.

Also this week, Rovner interviews Daniel Chang, who reported and wrote the latest KHN-NPR “Bill of the Month” feature about a child who had a medical bill sent to collections before he started to learn to read. If you have an outrageous or exorbitant medical bill you want to share with us, you can do that here.

Plus, for “extra credit,” the panelists suggest health policy stories they read this week that they think you should read, too:

Julie Rovner: New York Magazine’s “The Shared Anti-Trans and Anti-Abortion Playbook,” by Irin Carmon.

Alice Miranda Ollstein: The Los Angeles Times’ “Horrifying Stories of Women Chased Down by the LAPD Abortion Squad Before Roe vs. Wade,” by Brittny Mejia.

Rachel Roubein: KHN’s “‘Hard to Get Sober Young’: Inside One of the Country’s Few Recovery High Schools,” by Stephanie Daniel of KUNC.

Amy Goldstein: The Washington Post’s “After Decades Under a Virus’s Shadow, He Now Lives Free of HIV,” by Mark Johnson.

Also mentioned in this week’s podcast:

• Stat’s “Denied by AI: How Medicare Advantage Plans Use Algorithms to Cut Off Care for Seniors in Need,” by Casey Ross and Bob Herman.
• ProPublica’s “How Cigna Saves Millions by Having Its Doctors Reject Claims Without Reading Them,” by Patrick Rucker, Maya Miller, and David Armstrong.
• The Atlantic’s “There’s No Such Thing as a Casual Interaction With Your Doctor Anymore,” by Zoya Qureshi.
• Politico’s “Democrats Want to Restore Roe. They’re Divided on Whether to Go Even Further,” by Alice Miranda Ollstein and Megan Messerly.

Click to Open the Transcript

Transcript: The ‘Unwinding’ of Medicaid

KHN’s ‘What the Health?’Episode Title: The ‘Unwinding’ of MedicaidEpisode Number: 292Published: April 6, 2023

[Editor’s note: This transcript, generated using transcription software, has been edited for style and clarity.]

Julie Rovner: Hello and welcome back to KHN’s “What the Health?” I’m Julie Rovner, chief Washington correspondent at Kaiser Health News. And I’m joined by some of the best and smartest health reporters in Washington. We’re taping this week on Thursday, April 6, at 10 a.m. As always, news happens fast, and things might have changed by the time you hear this. So here we go. We are joined today via video conference by Alice Miranda Ollstein of Politico.

Alice Miranda Ollstein: Good morning.

Rovner: Rachel Roubein of The Washington Post.

Rachel Roubein: Good morning.

Rovner: And we welcome back to the podcast, after a bit of a break, Amy Goldstein, also of The Washington Post.

Amy Goldstein: Good to be back.

Rovner: Later in this episode, we will have the latest KHN-NPR “Bill of the Month” interview, with my colleague Daniel Chang. This month’s patient had a medical bill sent to collections before he was old enough to read. Impressive. But first, this week’s news. We’re going to start this week with Medicaid. During the pandemic, as most health policy nerds know, the federal government required states to keep anyone who qualified for the Medicaid program on the rolls, even if they became ineligible. But as of April 1, last week, states were free to start, quote, “unwinding” that Medicaid coverage. Now, states are facing the daunting task of determining who’s still eligible for the program and who can be removed and how those who are losing that Medicaid coverage can be steered to other programs, which they might be eligible. This is, to quote then-Vice President Biden when the ACA got passed, a BFD. So, what are some of the potential problems here? We’re talking about a lot of people, right, Amy? You wrote about this.

Goldstein: We are talking about a lot of people. It’s unclear how many people are going to lose Medicaid. But if you go by the Biden administration’s estimates, they’re thinking perhaps 15 million people out of 85 million people who are on Medicaid. So that’s a lot of low-income people who could end up without insurance or scrambling to see if they can find other insurance if they know to do that. And obviously, Medicaid is a joint federal-state enterprise, and states are the ones that carry it out. States set their eligibility rules to a large extent, and states have each had to write and submit to the federal government a plan for how they’re going to go about this unwinding. And the issue is that, with so many different plans, there are some things that CMS, Centers for Medicare & Medicaid Services, want states to do — for instance, to try as much as possible to check whether people are eligible by trying to match up with other records, say, from food stamps or wage records that the states might have.

Rovner: So basically, don’t count on them responding to a letter that says you need to reestablish your eligibility for this program.

Goldstein: Exactly. But how assertively states are going to 1) do that, and secondly, how hard they’re going to try to reach people in how many different ways — time will tell.

Rovner: Yeah, I’ve noticed. I mean, some states are doing things like sending out special colored envelopes. It’s Easter week; we’ve got robin’s-egg blue envelopes. I think that was Massachusetts. Somebody’s sending out pink envelopes and magenta envelopes. But, you know, Alice, you covered when they were doing the Medicaid work requirements, and Arkansas discovered that the problem wasn’t so much that people weren’t working; it’s that people literally had trouble navigating the reporting system. And that’s kind of what we’re looking at writ large here, right?

Ollstein: Yeah. And the people who are most likely to be flagged for removal, they could be very low income. They could have unstable housing, move around a lot, stay with family. They might not receive mail at the address that was on file a few years ago. They might not have reliable phone or internet access to be reachable in those ways. So, as Amy said, it really makes a difference how much and what kind of an effort states make to let people know this is even happening. Because as we saw with work requirements and even just, like, the regular pre-pandemic periodic Medicaid eligibility checks, people fall through the cracks all of the time for reasons that are not their fault at all. And so, with this all happening at once, with so many more people than normal, the risk of that just grows.

Goldstein: And if I could just throw in one more complicating factor: If you think about what’s happened to workforces over the pandemic, a lot of the Medicaid agencies in the states have lost workers, and there are shortages in a lot of places. And people who’ve been hired in the last couple years have never had to do renewals or, as the lexicon goes, redeterminations before. So what’s going on inside the places where these decisions are going to have to get made for all these people is a bit of a problem in many, many states.

Roubein: I think how I’ve been sort of thinking about it in my mind is there’s 1) that issue of ensuring people who are still eligible don’t lose coverage. And then there’s the other issue of people who aren’t eligible for Medicaid anymore, but having states and navigators and groups help them find coverage elsewhere, whether that’s on the exchange, or some people might actually be now eligible for employer insurance. And some of that breakdown from that 15 million from that Department of Health and Human Services report — they had projected 6.8 million will lose Medicaid coverage despite being still eligible and that roughly 8.2 million people expected to leave the program because they’re no longer eligible for the program.

Rovner: And before somebody writes me and asks … [unintelligible] … I know states weren’t absolutely required to keep these people on the rolls, but they were required to keep these people on the rolls if they wanted the extra pandemic money. So every state did it. So every state basically has this task ahead of them to try to figure out how it works, and we shall keep tabs on this. I want to turn to Medicare. Last week, we got the annual report of Medicare’s trustees, which found, a little unexpectedly I think, that the program’s Hospital Insurance Trust Fund should continue to be able to pay all of its bills until 2031. That’s three years longer than it was projected to last year. Kind of grimly, apparently some of the improvement is due to many older people on Medicare dying during the covid pandemic. But this also does take some pressure off of lawmakers to fix what ails Medicare financially, right? They tend to only act when it’s within this four- or five-year window.

Ollstein: I would say yes and no. I haven’t seen a huge shift in the talk on Capitol Hill in response to this report. It’s only pushing back the deadline a few years. And it’s true, Congress only acts when there’s an imminent crisis and sometimes not even then. But I think the people really saying, “Hey, we need to do something,” are not going to stop saying that because of this.

Rovner: I’m going to put that on a T-shirt: Congress only acts when there’s an imminent crisis and sometimes not even then.

Roubein: Oh, yeah. I mean, I think that’s frustrated budget experts because Congress isn’t particularly doing anything in terms of financial solvency. And I mean, it’s really political, as we’ve seen — Biden during his State of the Union and how he got Republicans to talk about basically his ad-libbed Medicare conversation. But it’s kind of this tradition.

Rovner: “We’re not going to touch Medicare or Social Security.”

Roubein: Yeah. Off the table, this kind of tradition of “Mediscare.” No one wants to kind of be putting their foot out there with a proposal that would change Medicare.

Goldstein: This looming insolvency of Medicare is not at all a new problem. And ducking the problem is not a new phenomenon. Julie, you may remember, along with me, in the late 1990s, as a result of the big Balanced Budget Act of 1997 — this goes back a way — Congress created a bipartisan commission on the future of Medicare, and it was led by members of Congress. It was a big deal, it got a lot of attention, and it tried for many, many, many months to map out the future of Medicaid. And in the final analysis, it just dissolved in disagreements.

Rovner: Yeah, Medicare, not Medicaid,

Goldstein: Yes, Medicare.

Rovner: They did recommend a drug benefit that did eventually come to pass, but —

Goldstein: That’s right. But that was not the solvency solution.

Rovner: No, it was not. And I will say, my bookcase here at home is littered with reports of these various commissions that Congress punted to. It’s like, well, you guys solve it. And of course, no one ever has. We are still at this. But obviously this year, Rachel — you kind of hinted at this — some of this is going to come to a head because it’s part of the debt ceiling debate, that Congress is going to have to do something about the debt ceiling, lest the U.S. actually default on its debt. Republicans want to have spending cuts as part of this. They had said they wanted to do something about Medicare as part of this. Is there any update on that debate? We still seem to be in the “after you, Alphonse” portion of this, with both Biden saying he’s ready to talk to the Republicans and Republicans saying they’re ready to talk to Biden and nobody really talking to each other yet.

Roubein: Yeah, I mean, I think both sides are pretty dug in here at the moment. McCarthy a month or two ago had said no cuts to Medicare and Social Security. And Kevin McCarthy, I think it was the end of last month, had demanded a meeting with Biden. And then, you know, kind of the Biden team came back and said, “OK, well, we put out a budget. So, you know, Republicans need to produce their budget document.” And, you know, that’s kind of the political argument that we’ve been hearing for a little while here.

Rovner: Well, to paraphrase Alice, this crisis is about to get imminent, but not quite.

Goldstein: Before we leave Medicare, let me just make a couple more points. One is that this affects hospital care. So it’s not all parts of Medicare. And when the insolvency date comes — as you say, now projected to be 2031 — it’s not as if the program is going to be unable to pay any of its bills. This year its trustees said that it’s going to be able to pay 89% of the hospital benefits to which Medicare are entitled. The other point is, I mean, there’s a long-standing reason why politicians have been reluctant to fix something despite the many, many, many years of cries of, “We better fix it soon because it’s going to be harder to fix the longer we wait.” And that is that, older Americans — I mean, to state the obvious — are a very active voting bloc and they do not like the prospect of federal benefits being eroded. So there is politics behind why both parties have been reticent.

Rovner: Yes, there’s four ways to make Medicare solvent. You can pay providers less, which is what they usually end up doing, and they fight back. You can make the benefits less, either by having people wait longer to get on them or having to pay more for them. Or you can require the taxpayers to pay more money. So everything is kind of unpleasant here. And I think that’s why Congress would just as soon not do this. But while we still have Medicare teed up, we talked at some length a few weeks ago about Medicare Advantage plans, the private alternative to the government fee-for-service Medicare, and how those plans are technically being overpaid, which has prompted quite the TV advertising campaign from the plans, which I suspect very few people understand. There’s just all these sort of old people saying, “They’re going to cut our Medicare.” So the Department of Health and Human Services finally issued its Medicare Advantage payment rule for next year, and it appears to split the difference, stopping plans from continuing to overstate how sick their patients are, which is what’s responsible for a lot of the overpayments. But it limits the ability of the government to look back to recoup some of those overpayments that have been made. Is that basically a one-sentence explanation of what they’ve done here?

Roubein: The industry waged a pretty fierce battle here, but they phased in their plan. So essentially the Centers for Medicare & Medicaid Services had proposed switching to a more updated coding system, which included eliminating approximately 2,000 codes. And insurers claimed that this could lead to substantial pay cuts. The administration fiercely disputed that. But they did, as you say, kind of split the difference, in terms of saying, “OK, well, we’re going to phase in these changes over three years,” which CMS officials and other experts have said is something that they kind of tend to do when there is controversial policy.

Rovner: Right. When they don’t want to irritate anybody too much, although I did notice that there’s also some rules about deceptive advertising for Medicare Advantage plans. So maybe it’ll make me stop screaming at the TV when these ads come on. Moving along, last week we were able to bring you the breaking news about the preventive care ruling out of Texas from federal District Judge Reed O’Connor. What else have we learned since those first breaking hours? I know the decision doesn’t cover preventive care recommended by groups that report directly to someone in the federal government who is appointed by the president and confirmed by the Senate — at least it doesn’t at the moment. But it only limits preventive care that’s recommended by the U.S. Preventive Services Task Force. But it could still be expanded at the appeals level, right?

Goldstein: That’s right. This affects a lot of people: everybody with private health insurance, which is estimated by federal health officials to be about 150 million people. It’s not killing all free preventive services. It’s ending the mandate that they’re provided at no cost to consumers for those preventive services that the U.S. Preventive Services Task Force has either defined or updated since the Affordable Care Act was passed in 2010. So that leaves intact a few important categories of things: 1) earlier preventive services, like mammograms, which were required to be covered for free before, are still intact. It also leaves intact services that are required by two different parts of HHS. Within HRSA [Health Resources and Services Administration], they have jurisdiction over women’s health services, so that’s why things like contraception are not touched by — at the moment, as you say — by this court ruling. And similarly, an advisory body to the CDC, which has jurisdiction over vaccinations, whether it’s childhood vaccinations, covid vaccinations — so those aren’t touched. But what’s happened in the past week is, predictably, the day after Judge O’Connor — who, as I’m sure you discussed last week, was the same judge who a few years ago held that the entire ACA was unconstitutional and was ultimately overruled by the Supreme Court — anyhow, O’Connor last week said this applies nationwide, not just to places where the plaintiffs are. And the next day, the Biden administration, the Justice Department, very quickly filed a notice of appeal. It was one paragraph. It wasn’t laying out the appeal, but it was getting on the record that the administration is going to appeal to the 5th Circuit Court of Appeals, which is a conservative circuit based in New Orleans that hasn’t been entirely friendly to the ACA in the past. What the administration did not yet do is say that it wants to stay the judge’s ruling, but it’s very likely that that’s going to be requested as well.

Rovner: Even if the judge’s ruling doesn’t get stayed, it’s likely to have very little immediate impact, right? Because insurance contracts are already kind of set for the year. If insurers wanted to stop covering this — and they’re probably not going to stop covering it — but if they wanted to make it — institute copays or say this is part of your deductible — they’re likely not to do that until the next plan year, right? Alice, I see you nodding.

Ollstein: Yeah, but that isn’t uniform. So the folks I talked to said that, while most plans are baked in for the year and what we really should be looking for is when the new 2024 things start coming out in the summer into the fall, that’s what we should be watching in terms of, you know, what could change there. But that isn’t uniform. It’s possible that some plans could change earlier. There are all different kinds of possibilities, but I was kind of surprised to see the Biden administration not rush to file an appeal right away. They filed a notice of appeal, but they haven’t actually filed the appeal yet or asked for the stay, but I think that is stemming from this not being seen as an imminent threat to people’s health coverage. The piece of it I’ve really been interested in is the impact on HIV and STDs, because, like Amy said, a lot of the basic cancer screenings and other things will continue to be protected in some form because they were recommended prior to 2010. But a lot of the STD and HIV stuff is a lot more recent, so it’s a lot more vulnerable to being rolled back, and plans and employers — for a lot of these things — covering preventive services for free with no out-of-pocket costs is good; it’s really cheap to cover and it prevents a lot of expensive care down the road. But that’s sort of less true with some of these things. PrEP, the HIV prevention drug, is really expensive. A lot of the lab costs for STD testing are still expensive. And so you could see folks’ plans and employers wanting to save money by shifting some of those costs to patients. And public health experts are worried about that.

Rovner: I think another quirk of this that we didn’t realize right away is what the decision says is that it only affects USPSTF rulings that were made after the date that the Affordable Care Act was signed, March 23, 2010. But what that ends up doing is leaving in effect prior recommendations that are not necessarily up to date. So you could end up rolling back to things that medical experts no longer think is the appropriate interval or type of preventive service being required. And then, of course, you have the insurers who are going to be required to put out their bids for next year in the coming months. Now, this is not the first time insurers have had to stab in the dark at what they think the rules are going to be and how much they’re going to want to charge for that. So we’re having yet another round of insurers kind of having to throw their hands out and throw darts against the wall, right?

Goldstein: Yes. And this — Alice mentioned employers are a big constituency in this. There is some survey evidence, I mean not terribly systematic survey evidence, but a little bit of survey evidence that was done last fall with this case pending, that showed that most insurers, a high, high proportion of insurers, wanted to keep these benefits. So that may influence, as you’re saying, Julie, what the bids come in looking like while this is all still kind of murky.

Rovner: Yeah, we know it’s popular and we know in most cases it’s relatively cheap. So one would assume that this decision might not have too much impact, although as I sort of alluded to, and I haven’t heard whether this is happening yet, the plaintiffs could also appeal because they didn’t get everything they wanted. They also wanted to have the women’s health stuff out of HRSA and the immunization stuff out of CDC stayed as, you know — or the requirements gotten rid of, and the judge did not do that. So one presumes they could also appeal and we would see what happens at the 5th Circuit Court of Appeals. But I think everybody assumes at this point that it’s going to end up at the Supreme Court, yes? I see nods all around. Oh, boy. I can’t wait. All right. Well, let’s turn to abortion. The big abortion news this week comes from Wisconsin in a race for state Supreme Court, of all things, which was supposed to be nonpartisan or technically was nonpartisan. Still, the strong showing by the judge who was associated with the liberal side of the ledger could have some major impact, right? This was expected to be a very close race, and it really wasn’t.

Ollstein: No, it wasn’t close at all. The progressive candidate really took it away, and the campaign really heavily focused on abortion. This is because the state’s ban, which has been in place, you know, since long before Roe was enacted, is likely to come before the court. But the implications go way beyond that. This could change how the legislature makeup is in the future because of challenges to the gerrymandered state maps. That could, you know, open the door to Medicaid expansion and all kinds of other things, you know, related to abortion, related to all kinds of things. Because right now, you know, you have a Democratic governor who is on his second term who can’t really do very much because of the state legislature. So this could have tons and tons of repercussions going forward in Wisconsin.

Rovner: And we should point out, because I meant to say, this election flipped the state Supreme Court from 4-3 conservative to 4-3 liberal.

Roubein: It was really interesting because you saw the liberal candidate, Janet Protasiewicz, really leaning into abortion rights. And, you know, obviously she’s a judge, but in multiple ads from her campaign it said, you know, women should have the freedom to make their own decisions on abortion. That was a quote from the ads. And now, you know, kind of, she was … [unintelligible] … from the other side, like, can she be impartial when she rules? And, you know, she said like, “No, I have not promised any of these major groups, Emily’s List, etc., that are backing me, how I will rule.” But, you know, we did see the judge, as she called it, her personal beliefs and be really open about that.

Rovner: And her opponent was also pretty open about it, too. He was a very conservative guy who was pretty much promising to go down the line with what the conservatives wanted. Alice, you were about to say something.

Ollstein: Yeah, well, it’s been fascinating now that we’re a day out from the election results. There is sort of a freakout going on on the right about it and about what it means for abortion specifically. And you’re seeing a lot of very prominent people on the right publicly saying, “We have a message on abortion that voters don’t like and we need to change it right now.” People are saying that the right needs to moderate and stop pushing for near-total bans with no exceptions, which is going on in a lot of states right now. That debate was already happening on the right, but I think this just pours fuel on it. I think with the Florida governor about to be confronted with whether or not to sign a six-week ban, this really is going to squeeze a lot of people.

Rovner: Yes, I feel very smug about my extra credit story from last week, which was the Rebecca Traister long read in New York Magazine about how Democrats have underestimated how winning an issue abortion may be. And I saw her sort of also smugly tweeting late Tuesday night. It’s like, “See, I’m telling you this.” While the Upper Midwest may be getting more supportive of abortion rights, also this week Michigan Governor Gretchen Whitmer formally signed the repeal of the state’s nearly hundred-year-old pre-Roe ban. But in the South, the trend is going the other way, as you mentioned, Alice. Florida’s legislature is moving quickly on a six-week abortion ban, while in North Carolina a Democratic state legislator who ran on abortion rights is switching parties, giving the Republicans there a supermajority that will let them override the Democratic governor’s vetoes. Are we looking at, fairly imminent, abortion being unavailable throughout the South?

Roubein: I think Florida, North Carolina, Nebraska is also considering a similar limit — were all states that in the two months after Roe v. Wade was overturned — were states that saw an increase in abortions. I think North Carolina is particularly interesting because in early February all the Democrats had signed on to a bill to codify Roe v. Wade. But I was reporting at the time with my colleague Caroline Kitchener on this, and she talked to one of the Democrats there, who said, well — after he signed on to it — like, “Well, that doesn’t preclude me from voting for abortion restrictions.” He had said this is, quote, “This is still the first quarter.” So I think even before we saw the state Democrat switch to Republican, you know, what happened in North Carolina where there is a Democratic governor was an open question even beforehand.

Rovner: Yeah, this reminds me of Virginia trying to expand Medicaid, and there’s constantly this sort of one member, another member. I mean, it literally didn’t happen until the last vote allowed it to happen, I think.

Ollstein: Yeah. I mean, this also really puts a spotlight on the tactic of doing a ballot referendum on abortion, because —

Rovner: That was my next question, Alice.

Ollstein: Ta-da.

Rovner: Tell us about your story about that.

Ollstein: The relation to this is, yes, you have a lot of Republican lawmakers and some Democrats, or some former Democrats, as we’ve seen, who are moving very aggressively to continue to pass abortion restrictions, whether it’s total bans or something short of that. But the referendums often show that that doesn’t necessarily reflect all of the Republican electorate, which is not always aligned with their representatives on this issue. And based on the results of the six referendums last year in which the pro-abortion-rights side won all six out of six, folks are hoping to get that going in more states this year, and it’s already underway — not as much in the South, and not every state can do a referendum legally. It varies state to state what the rules are, but where it’s possible, people are trying to do it. My story this week reported on an internal fight on the left about how to go about it. So most of the referendums that are moving forward in these red and purple states right now, trying to get on the ballot in the next few years, say that basically they would only restore the protections of Roe v. Wade, so only protect abortion up to the point of fetal viability. And you have a lot of folks — you know, medical groups, activists — saying, Why are we doing that? Why are we sort of pre-compromising? We keep seeing over and over at the ballot box this is a winning issue; why aren’t we being bold? Like the right is going for total bans. Why aren’t we going for total legalization? But the folks who want the viability limit in there are saying, Look, we want to put something forward that we know is going to pass. We’ve done research and focus groups and polling. You know, this is the way we think is smartest to go. Plus, you know, the vast majority of abortions take place prior to viability anyways. And right now we have no abortion at all. So isn’t legalizing most better than nothing? And so it’s a really interesting debate.

Rovner: It’s literally the mirror image of the debate that’s going on on the right, which has been happening over the years. It’s just that it’s all kind of, you know — now that we’re in this sort of odd place — it’s all magnified. So, you know, the right is trying to decide between do we restrict abortion a little or do we just allow, you know, the end of Roe v. Wade and states to make up their mind? Or do we go for a national ban? Where the left is saying, do we just want to bring things back to where they were when we had Roe, or do we want to go further and allow and basically have public funding and sort of other things to assure what they call reproductive justice? So obviously, this fight is going to continue on both sides.

Goldstein: Let me just say that this tension between the electorate and lawmakers in fairly conservative states is a real echo of what has happened over the years with Medicaid expansion, when there have been several states in which legislators were really dug in that they weren’t going to expand Medicaid under the ACA, and public ballot initiative and it expanded. So it’s sort of turning to the exact same tactic.

Rovner: That’s right. And again, in a lot of these Republican states, the voters were very happy to expand Medicaid. So that, yes, we’ve seen this particular book before. Well, before we go, there were a couple of stories that got kicked over from last week when we had our breaking news. But I really wanted to mention about artificial intelligence in health care or at least in health insurance. One story from ProPublica details how the health insurance giant Cigna is using an algorithm to reject thousands of claims for care that’s kind of between cheap and very expensive, and then letting medical director physicians basically batch-approve those rejections on the theory, likely correct, that even if most of the care is medically appropriate, most people won’t bother to appeal a bill of just a couple of hundred dollars and will just pay it. The other story, from Stat News, is kind of strikingly similar. It’s about a Medicare Advantage plan that’s using AI to pinpoint the exact moment it can stop paying for some care, particularly expensive care, in a hospital or nursing home. Now, it would appear that the Medicare Advantage case is more egregious because it seeks to actually cut off care, where Cigna is just denying payment after the fact. But it seemed to make it pretty clear that while a) it might improve care and save money, sometimes it’s just saving money for people other than the patients, right? That’s what it certainly looks like in these cases.

Ollstein: I mean, as we’ve seen with other uses of algorithms, algorithms reflect the values of the people creating the algorithms. And you say, “Oh, it’s a robot, it’s completely impartial.” Why are there racial discrimination implications then? But we do keep seeing this and it’s like, it was created by humans, it’s going to have human failings and require oversight and accountability mechanisms.

Rovner: Yeah. And finally, one more story from the “be careful what you wish for.” There’s a story in The Atlantic this month about the downside of telehealth that at least some of us saw coming. Now that doctors can charge for and be reimbursed for virtual care by video, more and more doctors are starting to charge for other forms of communication that used to be free, like telephone calls and emails. Now, lawyers have long charged for phone calls advising clients. I always kind of wondered why doctors didn’t. I guess I have my answer now. Is this another case of anything — that any technology that’s good is probably also going to have its downsides?

Goldstein: Well, it’s also a reflection that fewer and fewer doctors work on their own. They’re working for health systems that have the bottom line in mind, which is not to say they only have the bottom line in mind, but they’re less autonomous in terms of their pricing policies.

Rovner: And yeah, are being asked to see more patients, so it takes more time to actually, you know — one of the interesting things in this in the story was that a phone call may only be five minutes for you, but it’s probably 20 minutes for your doctor who has to go make a notation in your chart and maybe call in a prescription. And it’s more than just the quick phone call for the doctor. I think this is something that used to be a courtesy and now it’s just a charge. All right, well, that is this week’s news. Now we will play my “Bill of the Month” interview with Daniel Chang and then we’ll come back with our extra credit. We are pleased to welcome to the podcast Daniel Chang, who reported and wrote the latest KHN-NPR “Bill of the Month.” Daniel, welcome to “What the Health?”

Daniel Chang: Hi, Julie. I’m glad to be here.

Rovner: So this month’s patient wasn’t even old enough for kindergarten when he got a medical bill sent to collection for care he didn’t even receive. Who is this kid? Why did he need medical care? And this is very impressive, I’ve got to say.

Chang: So, at the time — this happened last Memorial Day weekend — Keeling McLin was his name, and he was 4 years old. And according to his mom, Sara McLin, who’s a dentist in central Florida, she had just finished cooking something on the stove and Keeling had gotten up to get something. And on his way down he put his hand on the hot stove. That was pretty painful, from what she described. And so she took him to the emergency room for care.

Rovner: First she took him to urgent care, right?

Chang: Well, it was a stand-alone emergency room, so it’s one of those hybrid ones, I guess you might call it. No inpatient, of course.

Rovner: And therein is about to be our problem. So Mom did everything right here, right? She made sure that she went to a facility in her network, and then they sent her off to another hospital. But the problem is, where is the first visit, right?

Chang: Correct. The first visit was a problem. It was part of the HCA system. And they didn’t have, I guess, the resources there to treat Keeling’s burn. So they referred him to a HCA hospital with a burn center, which was about a 90-minute drive away from the stand-alone ER.

Rovner: And they managed to deal with the burn, right? The kid’s OK.

Chang: They did. He’s OK. It turned out to be not as bad as suspected. And Sara McLin told me that they drained his blisters, wrapped his hand, and sent her home with instructions on how to care for it. And she didn’t think about it again.

Rovner: Until she got the bill.

Chang: Exactly.

Rovner: This gets pretty Kafkaesque, doesn’t it? What were the bills here?

Chang: So, the first bill that she received was from the physician provider group; Envision Healthcare employed the physician in the stand-alone emergency room. That bill was for about $72. She called her insurer, which was UnitedHealthcare, and they told her that — essentially not to worry about it. And the bill itself is labeled as a surprise out-of-network bill, although when I reached out to Envision Healthcare, they said that it was not, it was part of her cost sharing. In any case, that bill didn’t cause her any problems. Shortly after that, she got a bill from the stand-alone emergency room, and this bill was considerably higher, although her share was about $129. But the reason that she was a little confused about this is because she said that the physician at the stand-alone emergency room told her, “You know what, this won’t even count as a visit because we can’t do anything for him.” So she left with that thought. And later on she said she wished she had gotten that in writing, but that was the problem bill.

Rovner: Yes. So what eventually happened?

Chang: So what eventually happened is that the bill was in Keeling’s name and it did not include his mom or his dad on there. It was just simply to Keeling. And for reasons that HCA didn’t explain, and we can’t explain, Envision got his insurance information correct, but HCA had him as an uninsured person responsible for his own bills. And it’s odd because his date of birth is on that bill. And you would think that somewhere along the line someone would catch that. But they didn’t. And so what happened is that Sara fell into this sort of twilight zone where she couldn’t speak to anyone about the bill because it wasn’t in her name. And so, according to her conversations with folks at HCA and later at Medicredit, they couldn’t talk to her because her name wasn’t on the bill. So this was the one thing that she was trying to get resolved. And she tried for months and got nowhere, which is when she reached out to us.

Rovner: And as you point out, that Medicredit is the collections agency, right? This 5-year-old’s bill got sent to collections.

Chang: That’s correct. That just kind of compounded the frustration because Sara had worked for a couple of months to get HCA to add her name onto the bill. And she had even written them a letter, she says, and they told her they were going to do it and she was waiting for the bill. But then the next letter she got was from the collection agency, for the same amount and with the same problem. Her name wasn’t on the bill. So when she called the collection agency to try to dispute the bill, they told her, “Sorry, we can’t talk to you. You’re not the authorized representative on this bill.”

Rovner: It feels like the biggest problem here is not so much that mistakes happen. They do. Obviously, they’ve happened a lot in our “Bill of the Month” series. But they are so very hard to fix — I mean, even when you say, “Look, this is a 5-year-old.”

Chang: I agree. It sounded so frustrating. And I think, ultimately, of course, that’s why she reached out to us. But she tried repeatedly and not only did she tell me this, but the bills that she provided to us had a lot of her handwritten notes in the margins and the dates that she had spoken to individuals. And it just — it’s really hard. None of the experts that we spoke with could understand why HCA couldn’t just simply fix this before they sent it to collections. And HCA acknowledged the error, and they apologized to her. And they ultimately canceled the debt. But the system clearly doesn’t seem to work in favor of patients when you have these sort of odd complications that really they didn’t have anything to do with what she owed or what they said she owed; it was all a matter of identification.

Rovner: So is there anything she could have done differently? I’m not saying, you know — she obviously couldn’t prevent the mistake from being made. But was there some better way for her to try to navigate this?

Chang: You know, neither the insurer or the providers gave us an explanation of what she could have done differently or what individuals who find themselves in a similar position could do. And so I think she did everything that she reasonably could, short of perhaps hiring an attorney? I’m not sure; maybe that would have worked, but you shouldn’t have to go to that length and that cost just to get your name on your minor child’s bill so that you can take care of it and speak to the people who say you owe them the money. It’s just — it’s crazy.

Rovner: And she’s a dentist, so she’s a health care professional. She obviously had some, you know, knowledge of the system and how it works. And even she had trouble —

Chang: That’s correct.

Rovner: — getting it done. So I guess basically the lesson is, watch your bills closely and be ready to take action.

Chang: And potentially, when I think about this situation, ensuring perhaps that the stand-alone ER had all of the information, but I can also see where she was told that, “Look, this doesn’t even count as a visit. We couldn’t treat him here. You’ve got to take him to the burn center. We won’t count this as a visit.” I think she left comfortable in that knowledge, only to realize later that, oops, it wasn’t that way. Yeah.

Rovner: Get it all in writing.

Chang: Yes.

Rovner: Daniel Chang, thank you so much.

Chang: You’re very welcome. Thanks for having me on.

Rovner: OK, we’re back. And it’s time for our extra credit segment. That’s when we each recommend a story we read this week we think you should read too. As always, don’t worry if you miss it. We will post the links on the podcast page at khn.org and in our show notes on your phone or other mobile device. Alice, why don’t you go first this week?

Ollstein: Sure. So I picked a really fascinating history piece from the LA Times by Brittny Mejia, and it’s about what law enforcement’s role was pre-Roe v. Wade in cracking down on illegal abortions. All abortions were illegal. And it just really vividly describes how cops would conduct raids on doctors who were operating clandestinely and performing abortions, you know, the tactics they would use. It was just really fascinating. And so I think it’s worth resurfacing this history, thinking, OK, so abortion is illegal again; what does enforcement look like? What could enforcement look like? And this is a very disturbing picture of what it used to look like.

Rovner: Amy, you have a story that’s kind of related to Alice’s story, also looking at history, but updated.

Goldstein: That’s right. I chose a story by my colleague at the Post, Marc Johnson, with the headline, “After Decades Under a Virus’s Shadow, He Now Lives Free of HIV.” And it’s an interview with one of only five people in the world who’ve had stem cell transplants that have cured them of cancer but also gotten rid of any evidence of HIV in their bodies. And it’s not a hugely long story, but it’s just a beautiful trajectory reminding us of what the early bad world of AIDS was, with this individual’s friends dying all around him in San Francisco, to the decades when he was on a lot of AIDS drugs, and suddenly being unexpectedly liberated from all that. It’s a good read.

Rovner: Yeah, it is. Rachel.

Roubein: My extra credit is titled “‘Hard to Get Sober Young’: Inside One of the Country’s Few Recovery High Schools,” by Stephanie Daniel of KUNC. And basically it takes the reader inside a Denver recovery high school, which mixes high school education with treatment for drug and alcohol addiction. And so this high school in Colorado — it’s one of 43 nationwide, and she kind of details the history of recovery high schools, which, the first one opened up in Silver Spring, Maryland, in 1979. And she also kind of goes through what I thought was interesting, which was kind of, the challenges of recovery high schools, most being publicly funded charter or alternative schools, and they have a higher ratio of mental health and recovery personnel, so there’s really not a ton of them nationwide.

Rovner: I had never heard of them until I saw this story. It was really interesting. Well, for the second week in a row, my story is from New York Magazine. It’s by Irin Carmon, and it’s called “The Shared Anti-Trans and Anti-Abortion Playbook.” And she points out that not only are there many of the same people fighting abortion who are also fighting trans health care, but there’s also a similarly long-term strategy, as Irin wrote. They’re focusing on youth first, because they understand that it’s much harder to convince the public to restrict the lives of adults. As someone who’s spent years covering the fight over whether or not teen girls should be able to access sex education, birth control, or abortion, it does feel familiar. OK, that is our show for this week. As always, if you enjoy the podcast, you can subscribe wherever you get your podcasts. We’d appreciate it if you left us a review. That helps other people find us too. Special thanks, as always, to our ever-patient producer, Francis Ying. Also, as always, you can email us your comments or questions. We’re at whatthehealth@kff.org. Or you can tweet me. I’m @jrovner. Rachel?

Roubein: @rachel_roubein.

Rovner: Alice?

Ollstein: @AliceOllstein.

Rovner: Amy?

Goldstein: @goldsteinamy.

Rovner: We will be back in your feed next week. Until then, be healthy.

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Nuila’s new book, The People’s Hospital: Hope and Peril in American Medicine, uses the innovative model of the Ben Taub Hospital in Houston, where he practices, to argue for a publicly funded health system in the U.S. that’s available to everybody, with or without insurance. 

Dan Weissmann

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Host and producer of "An Arm and a Leg." Previously, Dan was a staff reporter for Marketplace and Chicago's WBEZ. His work also appears on All Things Considered, Marketplace, the BBC, 99 Percent Invisible, and Reveal, from the Center for Investigative Reporting.

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Transcript: A Doctor’s Love Letter to ‘The People’s Hospital’

Note: “An Arm and a Leg” uses speech-recognition software to generate transcripts, which may contain errors. Please use the transcript as a tool but check the corresponding audio before quoting the podcast.

Dan: Ben Taub Hospital is a publicly funded safety net hospital in Houston, Texas. The majority of patients don’t have insurance of any kind. 

Dr. Ricardo Nuila has been working at Ben Taub since he was an intern, a medical student. He took me on a tour.

Ricardo Nuila: I started here and, you know, literally I just did not want to leave here cuz I just, just really enjoyed my job here

Dan: He’s just published a book called “The People’s Hospital” that’s not just a love letter to the place, it’s a pitch: 

Not only is this place way, way cheaper than what we’re used to, in many ways it’s better. And it’s a model, a real alternative to what-we’re-used-to.

So, I ask him to pick ONE patient’s story from the book to tell, he picks a patient he calls Stephen. A restaurant manager, a Republican. A guy who did not expect to end up here.

But he had a giant lump on the side of his throat, and his insurance didn’t cover much. He paid cash, upfront, to get seen in a local ER. 

Ricardo Nuila: finally there was a doctor who had seen a CAT scan and said, you have tonsillar cancer, cancer, however, you don’t have, uh, insurance 

Dan: Tonsillar cancer. Cancer of the tonsils. That landed hard. So did the “however.” 

Ricardo Nuila: He felt shitty you know, that somebody could tell you cancer, but there’s nothing that we are gonna do about it because of, of how much and…

Dan: It’s like it’s too painful — or too obvious — to finish the sentence: Because of your insurance. Somebody tells Steven to try the public hospital, Ben Taub. He expects the worst. But that’s not what he finds.

Ricardo Nuila: He comes to love this place. He gives, this is like so Steven, but he, he gives gift cards to the people greeting at the door because they’re nice and they do their job well cuz they make his day,

Dan: And it’s not just that he likes the people at the door.

Ricardo Nuila: He feels like he got really good healthcare and that he also, um, thought that the price was extremely reason.

Dan: Stephen lost his insurance when he got too sick to work, and he doesn’t qualify for Medicaid. He owns a house, he’s got savings, Texas has really stringent Medicaid restrictions– so he’s paying out of pocket.

Ricardo Nuila: But his final bill is pennies of what he thought he would pay.

Dan: Stephen’s dad had gotten radiation treatment for cancer, and the sticker price was 700 thousand dollars. Stephen had gotten radiation AND chemo AND surgery — and had been hospitalized for a good while. 

His bill was 32 thousand, three hundred and seventy-eight bucks. Real money for sure, but he can pay it. And it’s less than five percent of his dad’s bill for much less extensive treatment. 

Ricardo Nuila: And the healthcare is really good. And so he’s almost proud that he’s had this experience

Dan: Steven’s become a convert. And as Ricardo Nuila walks me into a conference room, it’s clear: He hopes his book will create more converts. 

Ricardo Nuila: you start to see this model and it makes you think, can things be different in healthcare? I think that that’s an option. But we as a country haven’t thought about that. Seriously. You know?

Dan: And if it seems politically unimaginable that we could have anything like this around the country– an effective, efficient, CHEAP, publicly-funded health system– 

Well, the idea that Houston could have one, that was pretty unlikely too.

In fact, the story of how Ben Taub got here may be the most surprising story in Ricardo Nuila’s whole book. 

This is An Arm and a Leg, a show about why health care costs so freaking much, and what we can maybe do about it. I’m Dan Weissmann. I’m a reporter, and I like a challenge. So our job on this show is to take one of the most enraging, terrifying, depressing parts of American life and to bring you a show that’s entertaining, empowering and useful.

Ben Taub Hospital sits at the edge of the Texas Medical Center– that’s a giant neighborhood full of hospitals and medical schools, including some of the best in the country, like the M.D. Anderson cancer center. 

In his book, Ricardo Nuila writes about how some patients at Ben Taub can see from their rooms the gleaming buildings of Ben Taub’s neighbors. 

So when I visit, I make him show me the view. We look out from a stairwell at a glass tower, M.D. Anderson’s Sheikh Zayed building.

Ricardo Nuila: that’s glamorous. Right? you get a glimpse into the rest of the medical center here. Ben Taub sticks out, I feel like, because it’s, it’s brick versus glass. 

Dan: But as Ricardo Nuila makes clear in his book: This unglamorous brick building gets the job done. 

In addition to Steven, there’s Ebonie, whose complicated pregnancy — there’s a lot of vaginal bleeding– gets tracked more precisely than it would elsewhere: 

At other hospitals, nurses eyeball the pads that absorb that blood and note heavy, medium or light bleeding. At Ben Taub, they’ve adopted an innovative approach: weighing each pad to get an exact measurement. 

Another patient, Christian, has bounced around other systems without anybody accurately diagnosing the dire kidney problems that have kept him in pain for years. Because he didn’t have good insurance, it wasn’t worth anybody’s time. 

At Ben Taub, insurance isn’t an obstacle, 

Ricardo Nuila: We organize things, which is basically, okay, we need to focus on your kidneys right now and we need to get you to see a geneticist. And both of those things happened.

Dan: they not only diagnose him, they get him on a form of dialysis that he can manage himself at home.

It’s cheaper, and delivers better quality of life for him.

Everything at Ben Taub is cheaper. The system spends about a third as much per patient as the national average. In part, that may be because nobody earns million-dollar salaries here. 

But Ricardo Nuila makes the case over and over again that they take the time– because they have it– to make wise use of resources. 

They don’t have as many MRI machines as other hospitals. But guess what? A lot of patients don’t need MRIs. 

But Ben Taub can’t meet every need: One patient, Geronimo, needs a liver transplant, and that requires resources the hospital just doesn’t have. 

But Ricardo Nuila and his colleagues put a lot of time into wrenching him back onto Medicaid, so he can get the transplant somewhere else. They rope in a Congressman to get it done. 

Geronimo tells his mom:”I feel so important. Everyone treats me like I’m rich.” 

Ricardo Nuila: That’s what I think a lot of people really want is just the sense that the person who’s responsible for your care is thinking through the problem with you and aware that you are not having a great day and wants to deal with that situation with you. And I just felt like this environment allowed me to like, have those moments.

Dan: So who pays for this environment? It may be cheaper, but it isn’t free. 

Some patients are on Medicaid. Some are on Medicare. Some have private insurance. But the majority don’t have any insurance at all. 

Some, like Stephen, pay cash. And a lot of the rest — about a third of Ben Taub’s patients — are treated for free.

The bulk of Ben Taub’s funding comes from a special property tax in Harris County, where Houston is located. It funds a whole system called Harris Health– Ben Taub, a second hospital, and a bunch of clinics. 

And of course, none of this has always existed. 

In fact, it’s only here, like this, because of a really wild story, with two big characters. One of whom wasn’t even from Houston. He was a writer I’d never heard of, a Dutch guy named Jan de Hartog.

Ricardo Nuila: de Hartog was one of the most amazing people that you could read about. He was a Nazi resistance fighter, Dutch ship captain. 

Dan: And while he was hiding out in Denmark during the war– in between saving a few Jewish babies and running war missions in his tugboat–  

he wrote a romantic dramedy that — later became a broadway hit. And then got adapted into a Broadway musical called I Do, I Do– which, Broadway-musical nerds in the house– starred Mary Martin and Robert Preston– you know, The Music Man– and had a song that your mom might still remember. 

 (musical sounds) 

Dan: Yeah. So, interesting guy. And in the early 1960s he came to Houston to teach playwriting at a local University.  It was a big time for him. He’d just gotten married — for the third time, but this one was for keeps- and become a Quaker. 

Ricardo Nuila: And when he and his wife Marjorie come to Houston, they find that there’s all these whisperings about this charity hospital in town in Houston about how, how awful the conditions are. That the children in the maternity ward would cry all night for the, for a lack of milk, and so as part of his faith, he decides that he needs to volunteer there

Dan: When de Hartog writes about the hospital later, he describes the experience of walking in for the first time as literally mind-boggling. 

He’s like: I know what a hospital smells like. Disinfectant, maybe some fresh laundry. And I know what a slaughterhouse smells like: Blood, and shit. And the smell here is slaughterhouse. 

As he looks around, the sights are something else.

Ricardo Nuila: He sees a cockroach crawling into the tracheostomy of like a patient. He sees like people sitting in their own filth. 

Dan: He and Marjorie do not up and quit. They stick around. And then they recruit a dozen Quakers and a few society ladies to come volunteer with them, and get the Red Cross to train them.

And it’s nuts. This is a rich city. The ZOO is air conditioned. But not this hospital. 

And he starts to catch on: Why it’s so horrible.

Number one is racism. 

The hospital serves mostly Black and Brown patients. When Jan and Marjorie start volunteering, the other volunteers are all society ladies, and the whole program is set up so they don’t touch patients. DeHartog later says he asked why, and the volunteer coordinator says, Southern ladies can’t have physical contact with black people.

But she doesn’t say black people. She uses the n-word. 

 When he asks staff why public officials don’t do something about the rotten conditions, they say: What politician is going to stick up for black people? The n-word comes up again. 

And– de Hartog doesn’t make this connection, but it seems pretty on the nose: The hospital itself is named after Jefferson Davis, who led the Confederacy in the Civil War. 

But there’s also a political mechanism for institutionalizing this neglect, without ever having to acknowledge the role of racism: 

No one particular political entity — no one particular political leader– is responsible for the public hospital, financially. The city of Houston and Harris County are each supposed to kick in HALF. So it doesn’t belong to either of them. Here’s de Hartog describing the city-county dynamic in a lecture he gave many years later. 

Jan de Hartog: And they were continuously at each other’s throats. The one said, you don’t pay enough. The other said, but you don’t. And they went back and forth

Dan: The top official for Harris County actually has the title County Judge. At that time, this was a guy named Bill Elliott. 

And you’ll hear in this clip from a local newscast, he wasn’t exactly reaching for the bill. Here he is, explaining why the some problem with the hospital is actually the CITY’s fault. 

Judge Bill Elliott: it’s absolutely ridiculous, uh, to say that, uh, this is a responsibility and this is the fault of Harris County.

Dan: And the city? At least one.council member is calling for a budget cut. 

Which really pisses de Hartog off. 

And de Hartog actually loves the city. It’s an exciting place. It’s booming– growing super-fast. And it’s not just an oil town. 

Ricardo Nuila: Houston at that time was the home of NASA.

NASA narrator: Future manned space flight missions to the moon and perhaps the planets will be commanded from this control room of the Mission Control Center at NASA’s Manned Spacecraft Center,

Ricardo Nuila: It had built this Astrodome, it was the city of the future. 

Dan: The Astrodome– you know, a sports stadium WITH AIR CONDITIONING. . 

Astrodome Narrator: A fully enclosed building, large enough for any sport convention show or conclave with constant temperature and humidity independent of outside weather,

Dan: CBS News does a report about the booming city: NASA, the oil wealth, the Astrodome. And de Hartog is a main character– talking about how much he loves the town.

Jan de Hartog:  it is a city of, a city of unlimited opportunities. It’s an immensely exciting town, and you feel that anything is possible, 

Dan: It wraps up with Walter Cronkite talking about how everybody in town is absolutely nuts about football.

Walter Cronkite: Their brand of football is like their brand of city and brand of life. Play wide open. Take a chance, try anything. Above all, do it with zest and do it big. 

Dan: Oh, and there’s this OTHER thing Houston is really becoming known for. 

Cutting edge medicine. For twenty years, the city’s been building the Texas Medical Center — that giant campus where more than a dozen hospitals and med schools now operate right on top of each other. Baylor College of Medicine actually moved from Dallas to Houston to be part of it. 

Ricardo Nuila: Houston is a really deeply medical city. And at that time they’re all working on extraordinary things

Dan: Yeah, in 1964, while Jan de Hartog is witnessing the suffering at the charity hospital, Dr. Michael deBakey is performing the world’s first coronary artery bypass at a private hospital in town. 

But the medical establishment were not allies. Jefferson Davis hospital, on the outskirts of town, was about to be replaced by a new building in the Texas Medical Center. 

But the Medical Society– the local doctors’ association — hadn’t wanted the charity hospital as a neighbor. They’d actually put up a ballot initiative to keep the new building at the old site. 

Medical Society Voice-Over: you the taxpayer, will pay the extra cost That’s why your doctor recommends you vote for the new hospital to remain at its present site. 

Dan: It hadn’t worked, but along with the budget cuts, officials were now talking about DELAYING the charity hospital’s move to the new building, which had just been completed. De Hartog and his friends, smell a rat. 

They think the powers that be are actually going to sell the new building in the Medical Center to some other hospital that wants in. This has been a public conversation.

Jan de Hartog: There had been offers to buy it and they wanted to wait for the highest bidder

Ricardo Nuila: He writes a series of op-eds for the Houston Chronicle that start to get press, not just in Houston, but around the country and in fact around the world. 

Dan: He describes the awful things he’s seen. And he appeals to Houstonians’ sense of pride in their bustling, futuristic city. A city he loves, too. Here’s how his first op-ed ends…

Jan de Hartog: I cannot believe that it is the will of the citizens of Houston, that our growing medical center rightly becoming famous all over the. Shall be allowed to harbor the cancerous sore of man’s inhumanity to man. It would turn the entire center planned as Houston’s glory into Houston’s shame. 

Dan: Even just that first op ed made a lot of noise.

Jan de Hartog: the bomb exploded and the national magazines and newspapers and TV zeroed in on the hospital to find out what was going on, 

Dan: … and immediately, the hospital DOES move into its new home in the Medical Center. But the funding issue isn’t solved. 

So de Hartog keeps pushing. 

Ricardo Nuila: He writes a book called “The Hospital” 

Dan: He goes to churches around town, synagogues, everywhere he can, recruiting hundreds of volunteers. 

But there’s no political progress — and conditions at the hospital actually get worse. Key nurses get burned out and quit. Things go to hell.

In a harrowing diary entry, he writes about full bedpans left on tables next to trays of food. About a patient crying out for help, and hearing back “Shut up!” 

Jan de Hartog: Never before had I realized to this extent, the depth of our damnation, and at that deepest moment of desperation, when we knew nothing could be done, nothing would change for the simple reason that

Jan de Hartog: those who had the fate of the hospital in their hands were not there. Mayor Welsh didn’t work there. Uh, commissioner Bill Elliot Judge, the county judge did not work there. 

Dan: But THEN, there’s a turn. Somebody shows up. That’s right after this.

This episode of An Arm and a Leg is produced in partnership with Kaiser Health News. That’s a non-profit newsroom about health care in America. KHN is not affiliated with the giant health care player Kaiser Permanente. We’ll have more information about KHN at the end of this episode.

So, Jan de Hartog keeps slogging away. 

He gives a talk at a Baptist church– he reads that diary entry, the one with the bedpans, and the absence of Judge Elliott and other leaders.

And at first he thinks he didn’t go over so big. Nobody even raises their hand to volunteer. 

But then it happens. 

Jan de Hartog: When, uh, we were about to leave, a man turned up with a baby on his hip who said, uh, do you train people at night?

Dan: And the guy seems to be looking around, trying to make sure nobody’s listening. De Hartog tells the guy, yeah, we could do that…

Jan de Hartog: He said, I mean, a dead of night without anybody seeing. 

Dan: De Hartog’s like, “um, sure, I guess. Why, though?” 

Jan de Hartog: He said, well, I am Judge Elliot, 

Dan: Judge Elliott. The county judge. Probably the most powerful politician in town. That’s who wants to volunteer. In secret. Without anybody seeing. He says to de Hartog

Jan de Hartog: I cannot do it as a judge, but I must do it as a man. And that was the moment that the whole damn thing changed.. 

Dan: Because Judge Bill Elliott followed through.

Ricardo Nuila: He trains himself in a clandestine manner to be an orderly, at night, and he verifies everything that de Hartog has said. 

Dan: de Hartog actually oversees the judge’s final practical exam, where Bill Elliott tends to an African-American man named Willie Small. 

Jan de Hartog: the judge with his thermometer went and put his hand on Willie’s shoulder and said, Mr. Small, sir, I’d like to take your temperature to hear that, to hear a southern judge, , say “Mr. Small, sir” 

Dan: It was a symbolic moment. The judge had to touch, had to defer to, a Black man. So not only had the judge now seen everything, he took responsibility for what he had seen. 

There’s a proposal for a county-wide property tax, to fund what’s called a Hospital District. Now there’s a referendum, and Elliott backs it all the way.

Jan de Hartog: and we all waited with baited breaths for the outcome. And it was no

Dan: Yeah. The referendum fails. And as de Hartog tells it, once it does, a real backlash starts to build. It gets personal.

Jan de Hartog: those who had resented our presence from the very beginning became vocal. Margie and I, were called communists

Ricardo Nuila: De Hartog just would not flinch. I mean, he and his wife’s lives were threatened. 

Dan: Also, somebody threw a bag of excrement at their door. 

Eventually, de Hartog says the Red Cross, which was training and supervising volunteers at the hospital, came to him and Marjorie and said, “It might be better for us if you left town for a while.” 

They did — went on to all kinds of adventures. 

Meanwhile, Bill Elliott kept pushing, and keeps pulling in allies– including, eventually, the Medical Society. 

Ricardo Nuila: he rallies them to get behind it.

Dan: He gets the question on the ballot AGAIN later that same year. And it passes in November 1965. 

It’s a big moment. 

Ricardo Nuila:  What’s also interesting is that it’s forgotten. Something that I’ve gleaned from all this is that you know, people will forget and you have to remind them. 

Dan:  And while we’re remembering: In 1965, the whole country is making some big commitments to health care for a lot of people. President Lyndon Johnson signs Medicare and Medicaid into law in July of that year.

It’s probably also worth noting that Medicare and Medicaid help make Ben Taub possible: About a third of the hospital’s patients are on one or the other. It’s a minority of patients, but it’s many millions of dollars of funding. 

The 1960s were a notoriously divisive time. And so is this. 

Ricardo Nuila doesn’t ignore today’s political polarization — or how that polarization makes it hard to imagine a national conversation about creating a different health care system. 

Or the role that doctors have historically played in resisting that conversation.

It’s part of his story. His family story. And in a book about a place where a lot of sad things do happen, this may be the toughest one.

Ricardo Nuila: I was born into a family of doctors and my dad in many ways was a hero to me. I saw how much pride he took in his work of being a doctor 

Dan: But over time– as insurance companies got tougher to deal with– the business side of running a medical practice looked a lot less apealing. 

Ricardo Nuila: . He had to hire more and more staff. He hired his mother, my grandmother, who is, uh, the type of person not to back down from Chicago, you know, . And so, her job was to be on the insurance companies to make sure that they wouldn’t, screw him out of money.

Dan: His dad turned away patients who didn’t have insurance. His dad growled and grumbled– about insurance companies, and about patients who didn’t have money to pay. 

When Ricardo finished college and got into medical school, he put off starting for two years. What he sees as his dad’s life in the business of health care is not appealing.

Ricardo Nuila: the grind wears on him, you know? The fighting with the insurance companies

Dan: I mean in the book, your dad is a bit of a stand-in for . For doctors as a doctoring, as profession and the, and the way in which doctors get alienated from medicine. 

Ricardo Nuila: yeah, he is a stand in a bit for doctors. And it’s gonna be, I think the doctors have a lot to say about how healthcare goes in America,

Ricardo Nuila: And unfortunately, the history shows that they haven’t been a great piece of that, at least as far as universal healthcare is concerned. 

Dan: This becomes part of Ricardo’s story with his dad. Dad invites him to form a family practice. Ricardo chooses Ben Taub. And over the years, it becomes clear: They’re on opposite sides of a political divide. There are painful conversations, and then they go months without speaking. 

Ricardo Nuila: that’s how deep politics run, you know, it’s really, it’s really difficult when you overlay like politics onto like a family dynamic,

Ricardo Nuila: It just felt like he was like totally on board with this idea that, you know, healthcare is something that is earned and healthcare is something that people, if you can’t afford it, you don’t deserve it. Is what I heard from what he was saying. 

Dan: is your dad an ideal reader of the book? Is your dad kind of who the person you wanna make that case to? 

Ricardo Nuila: That’s really interesting.

Ricardo Nuila: I would say this, that, I did not write this to preach to the choir for sure.

Dan: But he’s not sure his dad would actually pick up a book like this.

Ricardo Nuila: It’s just because I know my dad, he, my dad’s the type of person who reads John Grisham on a beach, you know? So I’m not a hundred percent sure if he would pick up this book, you know?

Dan: Unless, say, his son wrote it. Ricardo does expect his dad to read The People’s Hospital. And even if he doesn’t agree with everything his son has written, Ricardo thinks his dad will be proud.

Ricardo Nuila: I can tell you now as a, as a father, , it’s not clear that your kids are gonna come out Okay. . You know what I mean? I’m just saying that like he has reason to be proud just because I’m a, a living and breathing person right now, you know?

Ricardo Nuila: And I’m, I’m working in as a doctor. So I, I feel, I feel good for him. 

Ricardo Nuila: And I think that he’s probably very happy that I wrote about medicine cuz he loves medicine.

Dan: The last chapter of “The People’s Hospital” is called “faith” And in it, Ricardo Nuila describes a daily ritual that he says keeps him grounded. It starts with passing a plaque on his way in. Of course I have him show it to me. 

Ricardo Nuila: I park like right over there, .

Ricardo Nuila: I come in here and I just look at, look at this every time. 

Dan: So, and describe what we’re seeing here.

Ricardo Nuila: Well, we’re seeing, a plaque that, talks about when this hospital was founded, and the people who constructed the building. And there’s also the, I forgot this is, this is bad of me, but I forgot the name.

Dan: the snake around the stick?  

Ricardo Nuila: I’m in big trouble now because I’m on the Caduceus Caduceus. I, it’s the Cadus. Yeah. 

Ricardo Nuila: And it’s just a reminder, you know, that we have this structure in place to help care for people who don’t have, uh, the means and that, and 

Dan: that people decided to put this building here. Yeah. 

Ricardo Nuila: Exactly. It’s a community effort.

Dan: Ricardo Nuila writes that he sees that community as he walks from that plaque to his desk– all the co-workers, in every kind of job, doing their best. 

And this is the faith that he says gets affirmed— reading from the book here: 

If someone is suffering and there is the capacity within the community to help, in a way that doesn’t harm anyone else, then we not only owe it to that person, we owe it to ourselves to help. 

Whatever your politics are, I think that’s pretty great. 

Dr. Ricardo Nuila practices at Ben Taub Hospital. He’s associate professor of Medicine, Medical Ethics and Health Policy at Baylor College of Medicine. His book is called “The People’s Hospital.”

Honestly there’s a lot in this book, — more patient stories, more family stories, a very deft summary of a hundred years of health care economics and politics.

I’ll tell you: reading this book, I was reminded of an idea I’ve had before.  That it might be cool someday to convene a kind of “Arm and a Leg” book club. Because I’d like to have someone to talk with about a book like this– like maybe you. 

Right now, that’s just an idea. The how would take a LOT of figuring out.  

But I’m curious how that idea sounds to you. You can let me know at Arm and a Leg show dot com, slash contact.

I mean, that’s always a good place to send ideas and stories and questions— so many of our best episodes come from you.

And I’m curious what you think about this virtual book club idea. If you’ve taken part in something like this, or helped to organize it, I’d love to hear how it went.

That’s arm and a leg show dot com, slash contact.

Next time on An Arm and a Leg: A woman named Lisa French asked her hospital what her surgery would cost her. They said, with your insurance, about thirteen hundred bucks.

They expected about 55 thousand more from insurance. 

They got 75 thousand. But then they wanted more. 229 thousand more. They wanted it from Lisa French, and they sued her for it.

After eight years, the case finally got resolved last June. Lisa French won!

The case has a LOT to teach us about our legal rights. 

That’s next time on An Arm and a Leg.

Till then, take care of yourself.

This episode of An Arm and a Leg was produced by me, Dan Weissmann, with help from Emily Pisacreta, and edited by Afi Yellow-Duke.

The recording of Jan de Hartog’s lecture is courtesy of the Baylor College of Medicine Archives. 

The audio of Bill Elliott is from a KHOU-TV newscast, thanks to the Texas Archive of the Moving Image.

Big thanks to the archivists who helped us find some of the tape for this episode! 

That includes Emily Vinson at the University of Houston library 

Matt Richardson and Sandra Yates at the Texas Medical Center Archives

And David Olmos at the Baylor College of Medicine archives. 

Daisy Rosario is our consulting managing producer. Adam Raymonda is our audio wizard.  Our music is by Dave Winer and Blue Dot Sessions. 

Gabrielle Healy is our managing editor for audience. She edits the First Aid Kit Newsletter. 

Bea Bosco is our consulting director of operations. Sarah Ballema is our operations manager. 

This season of an arm and a leg is a co production with Kaiser health news. That’s a nonprofit news service about healthcare in America, an editorially-independent program of the Kaiser family foundation. 

KHN is not affiliated with Kaiser Permanente, the big healthcare outfit. They share an ancestor: The 20th century industrialist Henry J Kaiser. When he died, he left half his money to the foundation that later created Kaiser health news.

You can learn more about him and Kaiser health news at arm and a leg show dot com slash Kaiser. 

Zach Dyer is senior audio producer at KHN. He is editorial liaison to this show. 

Thanks to Public Narrative — That’s a Chicago-based group that helps journalists and non-profits tell better stories– for serving as our fiscal sponsor, allowing us to accept tax-exempt donations. You can learn more about Public Narrative at www dot public narrative dot org. 

And thanks to everybody who supports this show financially. 

If you haven’t yet, we’d love for you to join us. The place for that is arm and a leg show dot com, slash support.

Thank you!

“An Arm and a Leg” is a co-production of KHN and Public Road Productions.

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KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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“It was a time of a lot of learning, turnaround, and pivoting for me, because we weren’t necessarily expecting that kind of life change,” she said.

Ferrell Ortiz would have liked a little more guidance to navigate the application process for Medicaid. She was inundated with forms. She spent days on end on the phone trying to figure out what was covered and where she could go to get care.

“Sometimes the representative that I would speak to wouldn’t know the answer,” she said. “I would have to wait for a follow-up and hope that they actually did follow up with me. More than 476,000 pregnant Texans are currently navigating that fragmented, bureaucratic system to find care. Medicaid provides coverage for about half of all births in the state — but many people lose eligibility not long after giving birth.

Many pregnant people rely on Medicaid coverage to get access to anything from prenatal appointments to prenatal vitamins, and then postpartum follow-up. Pregnancy-related Medicaid in Texas is available to individuals who make under $2,243 a month. But that coverage ends two months after childbirth — and advocates and researchers say that strict cutoff contributes to rates of maternal mortality and morbidity in the state that are higher than the national average.

They support a bill moving through the Texas legislature that would extend pregnancy Medicaid coverage for a full 12 months postpartum.

Texas is one of 11 states that has chosen not to expand Medicaid to its population of uninsured adults — a benefit offered under the Affordable Care Act, with 90% of the cost paid for by the federal government. That leaves more than 770,000 Texans in a coverage gap — they don’t have job-based insurance nor do they qualify for subsidized coverage on healthcare.gov, the federal insurance marketplace. In 2021, 23% of women ages 19-64 were uninsured in Texas.

Pregnancy Medicaid helps fill the gap, temporarily. Of the nearly half a million Texans currently enrolled in the program, the majority are Hispanic women ages 19-29.

Texans living in the state without legal permission and lawfully present immigrants are not eligible, though they can get different coverage that ends immediately when a pregnancy does. In states where the Medicaid expansion has been adopted, coverage is available to all adults with incomes below 138% of the federal poverty level. For a family of three, that means an income of about $34,300 a year.

In Texas, childless adults don’t qualify for Medicaid at all. Parents can be eligible for Medicaid if they’re taking care of a child who receives Medicaid, but the income limits are low. To qualify, a three-person household with two parents can’t make more than $251 a month.

For Ferrell Ortiz, the hospitals and clinics that accepted Medicaid near her Dallas neighborhood felt “uncomfortable, uninviting,” she said. “A space that wasn’t meant for me” is how she described those facilities.

Later she learned that Medicaid would pay for her to give birth at an enrolled birthing center.

“I went to Lovers Lane Birth Center in Richardson,” she said. “I’m so grateful that I found them because they were able to connect me to other resources that the Medicaid office wasn’t.”

Ferrell Ortiz found a welcoming and supportive birth team, but the Medicaid coverage ended two months after her daughter arrived. She said losing insurance when her baby was so young was stressful. “The two-months window just puts more pressure on women to wrap up things in a messy and not necessarily beneficial way,” she said.

In the 2021 legislative session, Republican Gov. Greg Abbott signed a bill extending pregnancy Medicaid coverage from two months to six months postpartum, pending federal approval.

Last August, The Texas Tribune reported that extension request had initially failed to get federal approval, but that the Centers for Medicare & Medicaid Services had followed up the next day with a statement saying the request was still under review. The Tribune reported at the time that some state legislators believed the initial application was not approved “because of language that could be construed to exclude pregnant women who have abortions, including medically necessary abortions.”The state’s application to extend postpartum coverage to a total of six months is still under review.

The state’s Maternal Mortality and Morbidity Review Committee is tasked with producing statewide data reports on causes of maternal deaths and intervention strategies. Members of that committee, along with advocates and legislators, are hoping this year’s legislative session extends pregnancy Medicaid to 12 months postpartum.

Kari White, an associate professor at the University of Texas-Austin, said the bureaucratic challenges Ferrell Ortiz experienced are common for pregnant Texans on Medicaid.

“People are either having to wait until their condition gets worse, they forgo care, or they may have to pay out-of-pocket,” White said. “There are people who are dying following their pregnancy for reasons that are related to having been pregnant, and almost all of them are preventable.”

In Texas, maternal health care and Pregnancy Medicaid coverage “is a big patchwork with some big missing holes in the quilt,” White said. She is also lead investigator with the Texas Policy Evaluation Project (TxPEP), a group that evaluates the effects of reproductive health policies in the state. A March 2022 TxPEP study surveyed close to 1,500 pregnant Texans on public insurance. It found that “insurance churn” — when people lose health insurance in the months after giving birth — led to worse health outcomes and problems accessing postpartum care.

Chronic disease accounted for almost 20% of pregnancy-related deaths in Texas in 2019, according to a partial cohort review from the Texas Maternal Mortality and Morbidity Review Committee’s report. Chronic disease includes conditions such as high blood pressure and diabetes. The report determined at least 52 deaths were related to pregnancy in Texas during 2019. Serious bleeding (obstetric hemorrhage) and mental health issues were leading causes of death.

“This is one of the more extreme consequences of the lack of health care,” White said.

Black Texans, who make up close to 20% of pregnancy Medicaid recipients, are also more than twice as likely to die from a pregnancy-related cause than their white counterparts, a statistic that has held true for close to 10 years with little change, according to the MMMRC report.

Stark disparities such as that can be traced to systemic issues, including the lack of diversity in medical providers; socioeconomic barriers for Black women such as cost, transportation, lack of child care and poor communication with providers; and shortcomings in medical education and providers’ implicit biases — which can “impact clinicians’ ability to listen to Black people’s experiences and treat them as equal partners in decision-making about their own care and treatment options,” according to a recent survey.

Diana Forester, director of health policy for the statewide organization Texans Care for Children, said Medicaid coverage for pregnant people is a “golden window” to get care.

“It’s the chance to have access to health care to address issues that maybe have been building for a while, those kinds of things that left unaddressed build into something that would need surgery or more intensive intervention later on,” she said. “It just feels like that should be something that’s accessible to everyone when they need it.”

Extending health coverage for pregnant people, she said, is “the difference between having a chance at a healthy pregnancy versus not.”

As of February, 30 states have adopted a 12-month postpartum coverage extension so far, according to a KFF report, with eight states planning to implement an extension.

“We’re behind,” Forester said of Texas. “We’re so behind at this point.”

Many versions of bills that would extend pregnancy Medicaid coverage to 12 months have been filed in the legislature this year, including House Bill 12 and Senate Bill 73. Forester said she feels “cautiously optimistic.”

“I think there’s still going to be a few little legislative issues or land mines that we have to navigate,” she said. “But I feel like the momentum is there.”

Ferrell Ortiz’s daughter turns 5 this year. Amelie is artistic, bright, and vocal in her beliefs. When Ferrell Ortiz thinks back on being pregnant, she remembers how hard a year it was, but also how much she learned about herself.

“Giving birth was the hardest experience that my body has physically ever been through,” she said. “It was a really profound moment in my health history — just knowing that I was able to make it through that time, and that it could even be enjoyable — and so special, obviously, because look what the world has for it.”

She just wishes people, especially people of color giving birth, could get the health support they need during a vulnerable time.

“If I was able to talk to people in the legislature about extending Medicaid coverage, I would say to do that,” she said. “It’s an investment in the people who are raising our future and completely worth it.”

This story is part of a partnership that includes KERA, NPR, and KHN.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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This story can be republished for free (details).