July 10, 2018 - CMS has proposed a new rule that would eliminate a state’s authority to divert Medicaid payments away from providers. The rule is intended to ensure beneficiaries have adequate access to healthcare services through direct state-to-provider payments.
In 2014, CMS allowed state governments to divert Medicaid payments from providers to specific third parties, such as in-home personal care workers. States can also divert provider payments related to court-ordered wage holdings, child support orders, and other state-issued legal judgements.
The new rule would suspend this policy. CMS believes providers were either unfairly punished or were completely blindsided by unfamiliar payment diversion rules. The agency also believes that the payment diversions violated a part of the Social Security Act which guarantees states can only make Medicaid payments to providers.
“This proposed rule is intended to ensure that providers receive their complete payment, and any circumstances in which a state does divert part of a provider’s payment must be clearly allowed under the law,” said Tim Hill, Acting Director for the Center for Medicaid and CHIP Services.
The agency will seek a regulatory impact analysis (RIA) as required by law, since the rule could affect the US economy in excess of $100 million. In one example, CMS estimates that home healthcare workers may collect upwards of $71 million in union dues from diverted provider payments.
Medicaid spending in the US exceeds $500 billion, but CMS is still unsure how direct-to-provider payments would impact the majority of Medicaid stakeholders.
“The potential direct financial impact to providers of this policy change could be affected by many factors, such as the nature and amounts of the types of payments currently being reassigned and decisions made by homecare providers after a final policy takes effect about whether or not to resume payments to third parties for these types of benefits,” CMS said.
“The Department [HHS] is unable to quantify these direct financial impacts in the absence of specific information about the types and amount of payments being reassigned.”
Currently, CMS is seeking stakeholder comments about new processes or procedures that can improve payment allocation across the Medicaid program.
“We seek comments regarding how we might provide further clarification on the types of payment arrangements that would be permissible assignments of Medicaid payments, such as arrangements where a state government withholds payments under a valid assignment,” CMS said. “Specifically, we invite comments with examples of payment withholding agreements between states and providers that we should address.”
Health plan experts, providers, and actuaries can submit comments through http://www.regulations.gov/ and by direct or overnight mail.
ITHACA, N.Y. — Most nursing homes had fewer nurses and caretaking staff than they had reported to the government for years, according to new federal data, bolstering the long-held suspicions of many families that staffing levels were often inadequate.
The records for the first time reveal frequent and significant fluctuations in day-to-day staffing, with particularly large shortfalls on weekends. On the worst staffed days at an average facility, the new data show, on-duty personnel cared for nearly twice as many residents as they did when the staffing roster was fullest.
The data, analyzed by Kaiser Health News, come from daily payroll records Medicare only recently began gathering and publishing from more than 14,000 nursing homes, as required by the Affordable Care Act of 2010. Medicare previously had been rating each facility’s staffing levels based on the homes’ own unverified reports, making it possible to game the system.
The payroll records provide the strongest evidence that over the last decade, the government’s five-star rating system for nursing homes often exaggerated staffing levels and rarely identified the periods of thin staffing that were common. Medicare is now relying on the new data to evaluate staffing, but the revamped star ratings still mask the erratic levels of people working from day to day.
At the Beechtree Center for Rehabilitation & Nursing here, Jay Vandemark, 47, who had a stroke last year, said he often roams the halls looking for an aide not already swamped with work when he needs help putting on his shirt.
Especially on weekends, he said, “It’s almost like a ghost town.”
Nearly 1.4 million people are cared for in skilled nursing facilities in the United States. When nursing homes are short of staff, nurses and aides scramble to deliver meals, ferry bedbound residents to the bathroom and answer calls for pain medication. Essential medical tasks such as repositioning a patient to avert bedsores can be overlooked when workers are overburdened, sometimes leading to avoidable hospitalizations.
“Volatility means there are gaps in care,” said David Stevenson, an associate professor of health policy at Vanderbilt University School of Medicine in Nashville, Tenn. “It’s not like the day-to-day life of nursing home residents and their needs vary substantially on a weekend and a weekday. They need to get dressed, to bathe and to eat every single day.”
David Gifford, a senior vice president at the American Health Care Association, a nursing home trade group, disagreed, saying there are legitimate reasons staffing varies. On weekends, for instance, there are fewer activities for residents and more family members around, he said.
“While staffing is important, what really matters is what the overall outcomes are,” he said.
While Medicare does not set a minimum resident-to-staff ratio, it does require the presence of a registered nurse for eight hours a day and a licensed nurse at all times.
The payroll records show that even facilities that Medicare rated positively for staffing levels on its Nursing Home Compare website, including Beechtree, were short nurses and aides on some days. On its best staffed days, Beechtree had one aide for every eight residents, while on its lowest staffed days, there was only one aide for 18 residents. Nursing levels also varied.
The Centers for Medicare & Medicaid Services, the federal agency that oversees nursing home inspections, said in a statement that it “is concerned and taking steps to address fluctuations in staffing levels” that have emerged from the new data. This month, it said it would lower ratings for nursing homes that had gone seven or more days without a registered nurse.
Beechtree’s payroll records showed similar staffing levels to those it had reported before. David Camerota, chief operating officer of Upstate Services Group, the for-profit chain that owns Beechtree, said in a statement that the facility has enough nurses and aides to properly care for its 120 residents. But, he said, like other nursing homes, Beechtree is in “a constant battle” to recruit and retain employees even as it has increased pay to be more competitive.
Mr. Camerota wrote that weekend staffing is a special challenge as employees are guaranteed every other weekend off. “This impacts our ability to have as many staff as we would really like to have,” he wrote.
New rating method is still flawed In April, the government started using daily payroll reports to calculate average staffing ratings, replacing the old method, which relied on homes to report staffing for the two weeks before an inspection. The homes sometimes anticipated when an inspection would happen and could staff up before it.
The new records show that on at least one day during the last three months of 2017 — the most recent period for which data were available — a quarter of facilities reported no registered nurses at work.
The Centers for Medicare & Medicaid Services discouraged comparison of staffing under the two methods and said no one should expect them to “exactly match.” The agency said the methods measure different time periods and have different criteria for how to record hours that nurses worked. The nursing home industry also objected, with Mr. Gifford saying it was like comparing Fahrenheit and Celsius temperatures.
But several prominent researchers said the contrast was not only fair but also warranted, since Medicare is using the new data for the same purpose as the old: to rate nursing homes on its website. “It’s a worthwhile comparison,” said David Grabowski, a professor of health care policy at Harvard Medical School.
Of the more than 14,000 nursing homes submitting payroll records, seven in 10 had lower staffing using the new method, with a 12 percent average decrease, the data show. And as numerous studies have found, homes with lower staffing tended to have more health code violations — another crucial measure of quality.
Even with more reliable data, Medicare’s five-star rating system still has shortcomings. Medicare still assigns stars by comparing a home to other facilities, essentially grading on a curve. As a result, many homes have kept their rating even though their payroll records showed lower staffing than before. Also, Medicare did not rate more than 1,000 facilities, either because of data anomalies or because they were too new to have a staffing history.
There is no consensus on optimal staffing levels. Medicare has rebuffed requests to set specific minimums, declaring in 2016 that it preferred that facilities “make thoughtful, informed staffing plans” based on the needs of residents.
Still, since 2014, health inspectors have cited one of every eight nursing homes for having too few nurses, federal records show.
With nurse assistants earning an average of just $13.23 an hour in 2017, nursing homes compete for workers not just with better paying employers like hospitals, but also with retailers. Understaffing leads predictably to higher turnover.
“They get burned out and they quit,” said Adam Chandler, whose mother lived at Beachtree until her death earlier this year. “It’s been constant turmoil, and it never ends.”
Medicare’s payroll records for the nursing homes showed that there were, on average, 11 percent fewer nurses providing direct care on weekends and 8 percent fewer aides. Staffing levels fluctuated substantially during the week as well, when an aide at a typical home might have to care for as few as nine residents or as many as 14.
A family council forms Beechtree actually gets its best Medicare rating in the category of staffing, with four stars. (Its inspection citations and the frequency of declines in residents’ health dragged its overall star rating down to two of five.)
To Stan Hugo, a retired math teacher whose wife, Donna, 80, lives at Beechtree, staffing levels have long seemed inadequate. In 2017, he and a handful of other residents and family members became so dissatisfied that they formed a council to scrutinize the home’s operation. Medicare requires nursing home administrators to listen to such councils’ grievances and recommendations.
Sandy Ferreira, who makes health care decisions for Effie Hamilton, a blind resident, said Ms. Hamilton broke her arm falling out of bed and has been hospitalized for dehydration and septic shock.
“Almost every problem we’ve had on the floor is one that could have been alleviated with enough and well-trained staff,” Mrs. Ferreira said.
Beechtree declined to discuss individual residents, but said it had investigated these complaints and did not find inadequate staffing on those days. Mr. Camerota also said that Medicare does not count assistants it hires to handle the simplest duties like making beds.
In recent months, Mr. Camerota said, Beechtree “has made major strides in listening to and addressing concerns related to staffing at the facility.”
Mr. Hugo agreed that Beechtree has increased daytime staffing during the week under the prodding of his council. On nights and weekends, he said, it still remained too low.
His wife has Alzheimer’s, uses a wheelchair and no longer talks. She enjoys music, and Mr. Hugo placed earphones on her head so she could listen to her favorite singers as he spoon-fed her lunch in the dining room on a recent Sunday.
As he does each day he visits, he counted each nursing assistant he saw tending residents, took a photograph of the official staffing log in the lobby and compared it to what he had observed. While he fed his wife, he noted two aides for the 40 residents on the floor — half what Medicare says is average at Beechtree.
“Weekends are terrible,” he said. While he’s regularly there overseeing his wife’s care, he wondered: “What about all these other residents? They don’t have people who come in.”
This article was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation. The author is a reporter for Kaiser Health News.
A version of this article appears in print on July 8, 2018, on Page A1 of the New York edition with the headline: Nursing Homes Routinely Mask Low Staff Levels.
The “fiduciary rule” is officially dead.
The Labor Department rule, conceived by the Obama administration, was meant to ensure that advisers put their clients’ financial interests ahead of their own when recommending retirement investments.
The rule’s fate was all but sealed with the election of President Donald Trump, who generally opposes financial regulations. Just two weeks into his presidency, he ordered a review of the rule “to determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.”
Then this past March, the rule was dealt a serious blow when a federal appeals court hearing a challenge to the rule by business groups vacated it in a split decision, overturning a lower court. The majority argued, in part, that the Labor Department had overstepped its authority in reinterpreting a fiduciary standard that had been on the books for decades.
In late April, the Trump administration allowed a deadline to seek a rehearing to pass without taking action. A few days later, the rule went on life support after the same court unanimously denied a motion by California, New York, Oregon and AARP to replace the federal government in defending it.
Finally, on Wednesday, the last deadline for resuscitating the fiduciary rule passed when the government declined to ask the U.S. Supreme court to reconsider the appeals court’s decision.
One procedural step remains: The court clerk must formally vacate the fiduciary rule by issuing a so-called mandate. To resurrect the rule before that occurs, the Fifth Circuit would have to take the unlikely step of challenging its own decision.
“As a literal matter, anything’s possible, but we regard the mandate as a mere formality,” says Andrew Oringer, a lawyer in Dechert LLP’s fiduciary practice.
The prospect of holding advisers accountable to retirement savers hasn’t disappeared entirely, though. The Securities and Exchange Commission is considering its own version of the fiduciary rule, known as the best-interest rule.
Dechert’s Oringer says the SEC’s effort will be daunting. “The SEC can now write its rule on a clean slate,” he said. “But without the Labor Department rule lurking in the background, the SEC is likely to find it even more daunting to find consensus and compromise as the various parts of the market continue to fight and claw and scratch over their different views of what’s best.”
A Labor Department spokesman referred questions to the Justice Department, noting that it represents the government in such cases. The Justice Department declined to comment.
Business groups, including the U.S. Chamber of Commerce, were fierce opponents of the rule, while many groups representing small investors, including AARP, had supported it.
Wall Street spent years preparing to comply with the Labor Department fiduciary rule. The government estimated that preparation would cost banks and investment advisers as much as $3 billion. An industry group said the number was closer to $5 billion.
Bank of America Corp.’s Merrill Lynch is among the financial companies that started moving toward fee-based advisory models in response to the emerging Labor Department rule and continued on that path even after Trump ordered his review.
“At the very least, from a PR standpoint, it would be difficult to go back to the old ways of doing business,” Brian Gardner, an analyst at Keefe, Bruyette & Woods Inc., told Bloomberg Businessweek. “It just looks bad.”
"Oh my God, we dropped her!" Sandra Snipes said she heard the nursing home aides yell as she fell to the floor.
She landed on her right side where her hip had recently been replaced. She cried out in pain.
A hospital clinician later discovered her hip was dislocated.
That was not the only injury Snipes, then 61, said she suffered in 2011 at Richmond Pines Healthcare & Rehabilitation Center in Hamlet, N.C. Nurses allegedly had been injecting her twice a day with a potent blood thinner despite written instructions to stop.
"She said, 'I just feel so tired,' " her daughter, Laura Clark, said in an interview. "The nurses were saying she's depressed and wasn't doing her exercises. I said no, something is wrong."
Her children also discovered Snipes' surgical wound had become infected and infested with insects. Just 11 days after she arrived at the nursing home to heal from her hip surgery, she was back in the hospital.
The fall and these other alleged lapses in care led Clark and the family to file a lawsuit against the nursing home. Richmond Pines declined to discuss the case beyond saying it disputed the allegations at the time. The home agreed in 2017 to pay Snipes' family $1.4 million to settle their lawsuit.
While the confluence of complications in Snipes' case was extreme, return trips from nursing homes to hospitals are far from unusual.
With hospitals pushing patients out the door earlier, nursing homes are deluged with increasingly frail patients. But many homes, with their sometimes-skeletal medical staffing, often fail to handle post-hospital complications — or create new problems by not heeding or receiving accurate hospital and physician instructions.
Patients, caught in the middle, may suffer. One in 5 Medicare patients sent from the hospital to a nursing home boomerangs back within 30 days, often for potentially preventable conditions such as dehydration, infections and medication errors, federal records show. Such rehospitalizations occur 27 percent more frequently than for the Medicare population at large.
Nursing homes have been unintentionally rewarded by decades of colliding government payment policies, which gave both hospitals and nursing homes financial incentives for the transfers. That has left the most vulnerable patients often ping-ponging between institutions, wreaking havoc with patients' care.
"There's this saying in nursing homes, and it's really unfortunate: 'When in doubt, ship them out,' " said David Grabowski, a professor of health care policy at Harvard Medical School. "It's a short-run, cost-minimizing strategy, but it ends up costing the system and the individual a lot more."
In recent years, the government has begun to tackle the problem. In 2013, Medicare began fining hospitals for high readmission rates in an attempt to curtail premature discharges and to encourage hospitals to refer patients to nursing homes with good track records.
Starting this October, the government will address the other side of the equation, giving nursing homes bonuses or assessing penalties based on their Medicare rehospitalization rates. The goal is to accelerate early signs of progress: The rate of potentially avoidable readmissions dropped to 10.8 percent in 2016 from 12.4 percent in 2011, according to Congress' Medicare Payment Advisory Commission.
"We're better, but not well," Grabowski said. "There's still a high rate of inappropriate readmissions."
The revolving door is an unintended byproduct of long-standing payment policies. Medicare pays hospitals a set rate to care for a patient depending on the average time it takes to treat a typical patient with a given diagnosis. That means that hospitals effectively profit by earlier discharge and lose money by keeping patients longer, even though an elderly patient may require a few extra days.
But nursing homes have their own incentives to hospitalize patients. For one thing, keeping patients out of hospitals requires frequent examinations and speedy laboratory tests — all of which add costs to nursing homes.
Plus, most nursing home residents are covered by Medicaid, the state-federal program for the poor that is usually the lowest-paying form of insurance. If a nursing home sends a Medicaid resident to the hospital, she usually returns with up to 100 days covered by Medicare, which pays more. On top of all that, in some states, Medicaid pays a "bed-hold" fee when a patient is hospitalized.
None of this is good for the patients. Nursing home residents often return from the hospital more confused or with a new infection, said Dr. David Gifford, a senior vice president of quality and regulatory affairs at the American Health Care Association, a nursing home trade group.
"And they never quite get back to normal," he said.
'She Looked Like A Wet Washcloth'
Communication lapses between physicians and nursing homes is one recurring cause of rehospitalizations. Elaine Essa had been taking thyroid medication ever since that gland was removed when she was a teenager. Essa, 82, was living at a nursing home in Lancaster, Calif., in 2013 when a bout of pneumonia sent her to the hospital.
When she returned to the nursing home — now named Wellsprings Post-Acute Care Center — her doctor omitted a crucial instruction from her admission order: to resume the thyroid medication, according to a lawsuit filed by her family. The nursing home telephoned Essa's doctor to order the medication, but he never called them back, the suit said.
Without the medication, Essa's appetite diminished, her weight increased and her energy vanished — all indications of a thyroid imbalance, said the family's attorney, Ben Yeroushalmi, discussing the lawsuit. Her doctors from Garrison Family Medical Group never visited her, sending instead their nurse practitioner. He, like the nursing home employees, did not grasp the cause of her decline, although her thyroid condition was prominently noted in her medical records, the lawsuit said.
Three months after her return from the hospital, "she looked like a wet washcloth. She had no color in her face," said Donna Jo Duncan, a daughter, in a deposition. Duncan said she demanded the home's nurses check her mother's blood pressure. When they did, a supervisor ran over and said, "Call an ambulance right away," Duncan said in the deposition.
At the hospital, a physician said tests showed "zero" thyroid hormone levels, Deborah Ann Favorite, a daughter, recalled in an interview. She testified in her deposition that the doctor told her, "I can't believe that this woman is still alive."
Essa died the next month. The nursing home and the medical practice settled the case for confidential amounts. Cynthia Schein, an attorney for the home, declined to discuss the case beyond saying it was "settled to everyone's satisfaction." The suit is still ongoing against one other doctor, who did not respond to requests for comment.
Dangers In Discouraging Hospitalization
Out of the nation's 15,630 nursing homes, one-fifth send 25 percent or more of their patients back to the hospital, according to a Kaiser Health News analysis of data on Medicare's Nursing Home Compare website. On the other end of the spectrum, the fifth of homes with the lowest readmission rates return fewer than 17 percent of residents to the hospital.
Many health policy experts say that spread shows how much improvement is possible. But patient advocates fear the campaign against hospitalizing nursing home patients may backfire, especially when Medicare begins linking readmission rates to its payments.
"We're always worried the bad nursing homes are going to get the message 'Don't send anyone to the hospital,' " said Tony Chicotel, a staff attorney at California Advocates for Nursing Home Reform, a nonprofit based in San Francisco.
Richmond Pines, where Sandra Snipes stayed, has a higher than average rehospitalization rate of 25 percent, according to federal records. But the family's lawyer, Kyle Nutt, said the lawsuit claimed the nurses initially resisted sending Snipes back, insisting she was "just drowsy."
After Snipes was rehospitalized, her blood thinner was discontinued, her hip was reset, and she was discharged to a different nursing home, according to the family's lawsuit. But her hospital trips were not over: When she showed signs of recurrent infection, the second home sent her to yet another hospital, the lawsuit alleged.
Ultimately, the lawsuit claimed that doctors removed her prosthetic hip and more than a liter of infected blood clots and tissues. Nutt said if Richmond Pines' nurses had "caught the over-administration of the blood thinner right off the bat, we don't think any of this would have happened."
Snipes returned home but was never able to walk again, according to the lawsuit. Her husband, William, cared for her until she died in 2015, her daughter, Clark, said.
"She didn't want to go back into the nursing home," Clark said. "She was terrified."
Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation that is not affiliated with Kaiser Permanente.
KHN's coverage related to aging and improving care of older adults is supported in part by The John A. Hartford Foundation. KHN's coverage of end-of-life and serious illness issues is supported in part by the Gordon and Betty Moore Foundation.
(CNN)The US government is warning insurance companies to be on the lookout for suspicious prescriptions of a drug being used in nursing homes across the country.
The medication, called Nuedexta, is the only drug approved by the Food and Drug Administration to treat a rare condition marked by uncontrollable laughing and crying, called pseudobulbar affect (PBA).
While drugmaker Avanir Pharmaceuticals has said that many dementia patients suffer from PBA, regulators are concerned that Medicare may be paying for the drug for unapproved and potentially fraudulent uses.
Prescribing for unapproved uses is not illegal, but diagnosing a patient with a condition in order to secure Medicare coverage is considered fraud.
A CNN investigation published in October found that Nuedexta's maker had been aggressively targeting frail and elderly nursing home residents for whom the drug may be unnecessary or even unsafe. CNN found multiple examples in which doctors had inappropriately prescribed Nuedexta to dementia patients, using a PBA diagnosis when it was actually being prescribed to control unruly behaviors.
In one case of alleged misprescribing, an Ohio physician who was a top prescriber of the drug was accused of accepting kickbacks in exchange for prescribing Nuedexta and fraudulently diagnosing patients with PBA to secure Medicare coverage. The physician has denied these allegations. The government previously confirmed that a federal investigation into his alleged conduct was launched, but it wouldn't comment on the current status. Read the original investigation into Nuedexta
Since Nuedexta came on the market in 2011, Avanir has generated millions of dollars in annual sales from prescriptions of the drug in nursing homes. And the federal government has been footing a large portion of the bill in the form of Medicare Part D prescription drug funding, for people 65 and over and the disabled.
Documents recently obtained by CNN through a public records request show that red flags have been raised to federal authorities about Nuedexta for years. Complaints filed to the FDA specifically related to marketing and advertising date back to 2012, when the agency received a strongly-worded letter from BlueCross BlueShield of Arizona.
"We would like to confidentially express concern about the marketing and 'educational efforts' by representatives/employees of Avanir Pharmaceuticals, Inc.," the insurance provider said in its letter. The insurer raised questions about whether PBA occurs in dementia patients and expressed concern that the drugmaker was misrepresenting Nuedexta as safe and effective in populations where it had not been adequately studied.
"We believe that the manufacturer appears to be marketing Nuedexta far beyond the scope of the clinical evidence," the company stated in the letter. BlueCross BlueShield of Arizona said in a statement to CNN that it felt compelled to detail these issues for the FDA. "As with any concern where member health and medical guidelines could potentially be compromised, it's our responsibility to act," it said.
In other complaints submitted to the FDA, individual names were redacted but several appeared to be from doctors or other medical professionals working in nursing homes.
"I am concerned with the off label promotion of Nuedexta for diagnosis other than PBA," stated a 2016 complaint. "Specifically they are targetting [sic] residents with Dementia with Behavioral Disturbances."
The person who submitted the complaint also described how they had overheard a salesperson "clearly but cleverly" promoting the drug for unapproved uses, which is illegal. This representative, the complaint said, would try to draw nurses' attention to a document listing PBA symptoms by leaving the pamphlet at nursing stations. The hope was that the nurses would then identify potential candidates to prescribe the drug.
"I want to know what can be done to stop this," the complaint stated. "Recently, things have really gotten out of control."
Avanir said in a statement that it "is committed to the safe, effective use of NUEDEXTA for the treatment of patients with PBA." The company said its promotional materials, including those used in doctors' offices and medical facilities, are subject to internal review and are submitted to the FDA. "We take seriously our role in educating patients, caregivers and health care providers about NUEDEXTA and PBA and we engage with CMS [Centers for Medicare & Medicaid Services] to ensure communications regarding the use of NUEDEXTA accurately reflect FDA approved labeling," the company stated, adding that Nuedexta is approved for treating PBA in all settings in which it occurs.
In March, CMS issued a memo specifically asking Medicare insurance providers to monitor prescriptions of the drug to ensure that it is being appropriately given to patients. The agency said that this memo, which it provided in a response to a CNN request, was meant to "inform plan sponsors about increases in utilization that may not be readily discerned or may relate to potential fraud."
The CMS memo reminds plan sponsors that Nuedexta is only approved to treat PBA and states that Part D insurers are legally required to ensure the drug is only being covered when prescribed for medically-accepted uses.
Two of the biggest Part D plan sponsors told CNN they had initiated safeguards in an attempt to ensure proper coverage of Nuedexta before receiving the latest CMS memo. CVSHealth introduced a so-called "prior authorization" for Nuedexta prescriptions in 2017, while Aetna said it instituted a prior authorization for 2018 "following an analysis of Nuedexta use over the past few years." Prior authorizations require patients to meet certain conditions and prescribers to provide additional information to the insurer, such as a patient's diagnosis, in order for a medication to be covered. Related: Drugmaker's ties to nonprofits raise 'conflict of interest'
Another insurer, Priority Health, said it currently bars the coverage of Nuedexta for dementia patients on non-Medicare, commercial plans, based on the lack of clinical testing for this population. In response to the CMS memo, the insurer plans to add a prior authorization to its Medicare plans as well, though it said that because CMS is strict about what requirements can be included in these, it is unlikely that the same dementia restriction it has for commercial plans will be allowed. And BlueCross BlueShield of Arizona, the insurer that wrote the letter to the FDA, said it has had a prior authorization for Nuedexta in place since 2011 and requires documentation confirming a PBA diagnosis in order for Nuedexta claims to be approved. It said there are very limited numbers of these prescriptions being filled by its members and that it is "providing adequate oversight."
Avanir said in an email that prior authorization requests are common, and that Avanir wants to make sure that patients suffering from PBA have access to Nuedexta -- working with insurers to help facilitate this access.
These prior authorizations can hurt pharmaceutical sales by making it harder for prescriptions to be approved. Internal emails among Avanir employees, which were reviewed by CNN and detailed in previous reporting, showed that the sales force coached doctors and facility employees on how to fight for Medicare coverage of the drug if it was initially refused, with representatives celebrating when prior authorizations were lifted by specific insurance companies.
"I am really excite(d) to pass on this great news," said one employee in 2013 about a large insurer removing the prior authorization for Nuedexta. The employee said the action meant more than 4 million additional seniors could more easily be prescribed Nuedexta. "The entire field sales team should be proud of the efforts that went into demonstrating the appropriate demand for NUEDEXTA!!...This is a very important win for our company."
Correction: An earlier version of this story stated that an Avanir sales representative was "placing snacks like Slim Jims" on nursing stations to draw attention to lists of PBA symptoms. In the pharmaceutical industry, a "slim jim" can also refer to a marketing pamphlet. This article has been updated to reflect that "slim jim" was a reference to pamphlets.
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