Glucagon-like peptide-1 receptor agonists are effective for treating obesity, but the high cost of these medications endangers the financial viability of our health care system. To ensure that these drugs are available to Medicare beneficiaries, pharmaceutical manufacturers must lower their prices.

A series of structural constitutional arguments lodged in multiple cases against Centers for Medicare and Medicaid Services’ (CMS) authorities to negotiate prescription drug prices via the 2022 Inflation Reduction Act threaten the legitimacy of CMS program and federal agency powers.

In 1982, without waiting for the findings of the National Hospice Study, Congress passed legislation enabling certified hospices to receive Medicare reimbursement. What emerged is a reimbursement program that differs substantially from the movement that spawned it. Hospices now face many dilemmas, among them shifting the burden of care to the family, determining who controls the course of patient care, and breaking even financially.

The Inflation Reduction Act (IRA) creates a new process to cap Medicare Part D branded drug prices. It prohibits Medicare from paying more than a specified discount from average private market prices and requires that CMS negotiate with manufacturers to agree on a maximum fair price that Medicare will pay that is lower than the specified discount. This article analyzes the cause of high drug prices and how negotiations to set the maximum fair price might unfold. It (...) compares Medicare’s new pricing process to the way drug prices are set in Medicaid, the Veterans Administration, U.S. private insurers, and European nations. It analyzes how negotiations to set the maximum fair price might unfold in light of negotiation theory and the practices to negotiate prices employed in Europe. It draws inferences from the initial published data on the first round of negotiated prices. (shrink)

The U.S. Court of Appeals for the District of Columbia upheld, in Presbyterian Medical Center of the University of Pennsylvania Health System v. Shalala, 170 F.3d 1146, a federal district court ruling granting summary judgment to the Department of Health and Human Services in a case in which Presbyterian Medical Center challenged Medicare's requirement of contemporaneous documentation of $828,000 in graduate medical education expenses prior to increasing reimbursement amounts. DHHS Secretary Donna Shalala denied PMC's request for reimbursement for increased (...) GME costs. The appellants then brought suit in federal court challenging the legality of an interpretative rule that requires requested increases in reimbursement to be supported by contemporaneous documentation. PMC also alleged that an error was made in the administrative proceedings to prejudice its claims because Aetna, the hospital's fiscal intermediary, failed to provide the hospital with a written report explaining why it was denied the GME reimbursement. (shrink)

In Vencor, Inc. v. National States Insurance Co., the U.S. Court of Appeals for the Ninth Circuit held that a Medigap insurance provider was only obligated to pay the rates that Medicare would have paid for the same care.Clarence Rollins purchased a Medigap insurance policy from National States Insurance Company to supplement his Medicare coverage. When Rollins became ill and required care beyond that which Medicare would cover, he received his medical treatment from Vencor Hospital-Phoenix. Upon Rollins's (...) death, NSIC paid Vencor $38,760. Vencor claimed that NSIC owed an additional $132,438 because NSIC was not entitled to the lower care rates established by Medicare. NSIC refused to pay Vencor's higher rates. As a result, Vencor sued NSIC for breach of contract.The U.S. District Court for the District of Arizona held, on a motion for summary judgment, that no breach occurred, and that NSIC was obligated to pay only the lower rates established by Mediare. The Ninth Circuit affirmed this decision. (shrink)

In January 2016, a long-delayed Medicare change took effect. The Medicare program will now reimburse doctors for time they spend talking with patients about end-of-life care. This is the move that Sarah Palin and other Affordable Care Act critics said would authorize government “death panels” to decide whether older Americans should live or die. Today virtually no one buys into Palin's death panel rhetoric. But many people do think the Medicare change is a big deal. Representative Earl (...) Blumenauer, a Democrat from Oregon who sponsored the original ACA reimbursement proposal, lauded the Medicare provision as “a turning point in end-of-life care.” Others are not so sure about that. After all, laws promoting advance care planning have existed for decades. The federal Patient Self-Determination Act of 1990 and the many court decisions and state laws supporting advance care planning have had relatively little impact. Similarly, legal recognition of physician orders for life-sustaining treatment as advance planning instruments have not produced the improvements that were predicted. And from a broad perspective, advance care planning is a small piece of the puzzle. The effort to improve end-of-life care must take into account the limitations of advance decision-making, as well as the overriding importance of the general standard of care for terminally ill patients. (shrink)

Access to care has become a key and contentious issue in the Canadian health care system. In this article, I explore the role of Canadian courts in determining rights to access public health insurance, beginning with a brief overview of the Canadian system and its distinguishing features, and then moving to discuss challenges to governmental limits on publicly-funded Medicare using the Canadian Charter of Rights and Freedoms. I argue that the Canadian courts are not, as is often charged, proactive (...) in this area. I question whether the deference exhibited by courts to governmental limits on Medicare is justified given concerns about the fairness of the principles and processes followed by decision-makers. In sharp relief to the judiciary’s conservative approach to applications for better or timely access to publicly-funded Medicare is the recent Supreme Court of Canada’s decision in Chaoulli v. Quebec which upheld a right to buy private health insurance for “medically necessary” hospital and physician services. (shrink)

In recent months, pharmaceutical manufacturers have brought legal challenges to a provision of the 2022 Inflation Reduction Act (IRA) empowering the federal government to negotiate the prices Medicare pays for certain prescription medications. One key argument made in these filings is that price negotiation is a “taking” of property and violates the Takings Clause of the US Constitution. Through original case law and health policy analysis, we show that government price negotiation and even price regulation of goods and services, (...) including patented goods, are constitutional under the Takings Clause. Finding that the IRA violates the Takings Clause would radically upend settled constitutional law and jeopardize the US’s most important state and federal health care programs. (shrink)

At its inception, the Medicare program was seen as a way to bring the elderly into the mainstream of American medicine. The program after twenty years is increasingly viewed as an instrumentality to influence the nature and costs of American medicine. The first part of this article reviews the origins, history, and evolution of the Medicare program in order to explain how and why this change has come about. In the concluding section, the article explores further the implications (...) of the program's concentration on the aged, its uncertain notion of entitlement, and the bewildering character of the current claims of generational inequity allegedly imposed by Medicare's present outlays of $70 billion and its persistingly high rate of cost increases. Keywords: elderly, Medicare, health care CiteULike Connotea Del.icio.us What's this? (shrink)

In January 2016, Medicare began reimbursing clinicians for time spent engaging in advance care planning with their patients or patients’ surrogates. Such planning involves discussions of the care an individual would want to receive should he or she one day lose the capacity to make health care decisions or have conversations with a surrogate about, for example, end‐of‐life wishes. Clinicians can be reimbursed for face‐to‐face explanation and discussion of care and advance directives and for the completion of advance care (...) planning forms. Although it seems that political barriers to reimbursement for such planning have largely faded, the Medicare policy's impact on provider billing practices appears to be limited, suggesting other barriers to clinician engagement in advance care planning. Additionally, the effects of this policy on patient behavior and the clinician‐patient relationship are not yet known. (shrink)

This issue’s “Legal Briefing” column covers the recent decision by the Centers for Medicare and Medicaid Services (CMS) to expand Medicare coverage of advance care planning, beginning 1 January 2016. Since 2009, most “Legal Briefings” in this journal have covered a wide gamut of judicial, legislative, and regulatory developments concerning a particular topic in clinical ethics. In contrast, this “Legal Briefing” is more narrowly focused on one single legal development. This concentration on Medicare coverage of advance care (...) planning seems warranted. Advance care planning is a frequent subject of articles in JCE. After all, it has long been seen as an important, albeit only partial, solution to a significant range of big problems in clinical ethics. These problems range from medical futility disputes to decision making for incapacitated patients who have no available legally authorized surrogate. Consequently, expanded Medicare coverage of advance care planning is a potentially seismic development. It may materially reduce both the frequency and severity of key problems in clinical ethics. Since the sociological, medical, and ethical literature on advance care planning is voluminous, I will not even summarize it here. Instead, I focus on Medicare coverage. I proceed, chronologically, in six stages: 1. Prior Medicare Coverage of Advance Care Planning 2. Proposed Expanded Medicare Coverage in 2015 3. Proposed Expanded Medicare Coverage in 2016 The Final Rule Expanding Medicare Coverage in 2016 4. Remaining Issues for CMS to Address in 2017 5. Pending Federal Legislation. (shrink)

Copyright © 2015 Massachusetts Medical Society. BACKGROUND: Routine preoperative testing is not recommended for patients undergoing cataract surgery, because testing neither decreases adverse events nor improves outcomes. We sought to assess adherence to this guideline, estimate expenditures from potentially unnecessary testing, and identify patient and health care system characteristics associated with potentially unnecessary testing. METHODS: Using an observational cohort of Medicare beneficiaries undergoing cataract surgery in 2011, we determined the prevalence and cost of preoperative testing in the month before (...) surgery. We compared the prevalence of preoperative testing and office visits with the mean percentage of beneficiaries who underwent tests and had office visits during the preceding 11 months. Using multivariate hierarchical analyses, we examined the relationship between preoperative testing and characteristics of patients, health system characteristics, surgical setting, care team, and occurrence of a preoperative office visit. RESULTS: Of 440,857 patients, 53% had at least one preoperative test in the month before surgery. Expenditures on testing during that month were $4.8 million higher and expenditures on office visits $12.4 million higher than the mean monthly expenditures during the preceding 11 months. Testing varied widely among ophthalmologists; 36% of ophthalmologists ordered preoperative tests for more than 75% of their patients. A patient's probability of undergoing testing was associated mainly with the ophthalmologist who managed the preoperative evaluation. CONCLUSIONS: Preoperative testing before cataract surgery occurred frequently and was more strongly associated with provider practice patterns than with patient characteristics.. (shrink)

In his deliciously funny book, Medicare Meets Mephistopheles, Professor David Hyman argues that Medicare corrupts our most base impulses. It urges us, for example, to grab for more than our fair share of benefits while offering providers “the prospect of staggering amounts of money – even as…actuaries were promising Congress that the Medicare program would be easily affordable.” Modeled on C.S. Lewis’ The Screwtape Letters, Professor Hyman's satirical examination of Medicare takes the form of a memo (...) to Satan from an underling demon in the Department of Illness and Satanic Services, reporting on the success of Satan's diabolical plot to corrupt humanity. Sprinkled with political cartoons, absurd stories of Medicare's over-the-top fraud enforcement efforts, and a historical account of Medicare's genesis, Medicare Meets Mephistopheles gives us a well-researched and easy-to-read primer on the biggest pot of gold in medicine. (shrink)

On January 1, 2006, Medicare Part D prescription drug coverage was initiated. Concern was immediately voiced by the American Association of Retired Persons (AARP) and Families USA that, in response to this program, the pharmaceutical industry may raise prices for drugs most often used by the elderly. This article examines the ethical implications of a revenue-maximizing pricing strategy in an industry in which third party financing mitigates an end product's true cost to the user. The perspectives of three stakeholder (...) groups are examined: the elderly, as consumers of prescription drugs, the pharmaceutical industry, as product manufacturer and beneficiary of derived profits, and the total U. S. population, as the ultimate payer for the program via tax revenues. Key questions explored include the relationships among price strategy and access to drugs at both the micro (Medicare cohort) and macro (total population) levels, and on drug development or enhancement. The role of profit in a capitalism-based health care system is also examined. Hospital industry impact on these same stakeholder groups in response to the original 1965 Medicare law is used to compare and contrast possible outcomes of the new drug program. It is predicted that pharmaceutical firms will mimic the hospital industry, adopting a price maximizing strategy for drugs covered by the program. In the process, a utilitarian effect occurs: the benefits of increased access and diffusion of drugs counterbalance inequities in financing Medicare Part D. (shrink)