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February 7, 2019

These 6 senators are asking hospitals hard questions about 'surprise' medical bills

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    Senators this week took initial steps to learn more about out-of-network billing and payment practices and the factors behind a drug's $375,000 list price, The Hill reports.

    Learn 5 ways to control the flow of drug expenditures

    Sens. seek info on billing, payment practices

    A bipartisan group of Senators on Tuesday sent letters to various health care providers and insurers asking questions about their billing and payment practices, as part of the senators' efforts to combat so-called "surprise" medical bills, according to The Hill.

    The senators asked recipients how insurers' payments for care provided by out-of-network clinicians compare with Medicare payment rates and providers' charges for care. The senators also asked for data showing whether pegging insurers' out-of-network payment rates to providers' average charges would increase insurance premiums.

    In addition, the senators asked for information on the percentage of specialists—which include anesthesiologists, emergency doctors, pathologists, and radiologists—that hospitals outsource, and the percentage that are part of hospitals' networks, Modern Healthcare reports. The senators also asked for data on the percentage of hospitals' income that comes from balance billing, which often can lead to surprise medical bills, as well as the percentage of specialty care provided to patients at in-network hospitals that is billed as out-of-network.

    The senators in the letters wrote, "We want to protect patients from costly surprise bills while preventing undue disruption in the health care system," adding, "To meet this goal, it is critical that we receive additional data and more complete feedback in order to refine and inform our legislative proposal."

    The letters were sent by Sens.:

    • Michael Bennet (D-Colo.);
    • Tom Carper (D-Del.);
    • Bill Cassidy (R-La.);
    • Maggie Hassan (D-N.H.);
    • Lisa Murkowski (R-Alaska); and
    • Todd Young (R-Ind.).

    Sanders asks company to justify $375K drug price

    Separately, Sen. Bernie Sander (I-Vt.) on Monday sent a letter to Catalyst Pharmaceuticals, asking the drugmaker why a drug that for years was available to patients at no cost is now priced at $375,000, Reuters reports.

    According to the letter, the drug, called Firdapse, is used to treat the rare neuromuscular disorder Lambert-Eaton Myasthenic Syndrome (LEMS). LEMS affects about one in 100,000 U.S. residents, Reuters reports.

    According to Reuters, Jacobus Pharmaceuticals for years made Firdapse available to patients at no cost under FDA's so-called "compassionate use" program. Under the program, individuals with serious or life-threatening diseases can access experimental drugs outside of a clinical trial if they have no comparable alternatives.

    Catalyst in 2012 bought the rights to Firdapse, and FDA in November 2018 approved the drug for sale in the U.S. market, Reuters reports. According to Reuters, Catalyst also has the exclusive rights to market Firdapse "for several years." Catalyst in December 2018 launched Firdapse in the U.S. market, with a price of $375,000 for a year's worth of treatment.

    Sanders in the letter wrote, "Catalyst's decision to set the annual list price at $375,000 is not only a blatant fleecing of American taxpayers, but is also an immoral exploitation of patients who need this medication." He asked Catalyst to provide information on the financial and nonfinancial factors it used when determining Firdapse's list price, as well as data on how the price could affect patients.

    Catalyst in a statement released Monday said its "top priority is improving patient care in the LEMS community and potentially elsewhere within the neuromuscular community." The company said it "will respond to … Sanders' letter in a timely manner and provide information about Firdapse and the programs that [it has] in place to raise awareness of LEMS, facilitate accurate and timely diagnosis, and broaden affordable patient access to an FDA-approved treatment" (Sullivan, The Hill, 2/5; Luthi, Modern Healthcare, 2/5; Abutaleb, Rueters, 2/4; Daugherty, The Hill, 2/4).

    Five ways to control the flow of drug expenditures

    Prescription drug expenditures are the fastest growing component of health care spending. And while reducing unwarranted prescribing variation is the single biggest improvement opportunity, there are several other near-term chances to reduce spending and grow revenues.

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