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AG Deal With Partners Filed In Court: Restricts Growth, Costs

Massachusetts Attorney General Martha Coakley on Tuesday reached an agreement with Partners HealthCare that she says will alter the hospital network’s negotiating power for years to come.

The deal would resolve an antitrust investigation by the attorney general’s office and ultimately allow Partners to acquire South Shore Hospital.

“Our office was the first to shine a light on the ability of Partners to charge higher prices based on its negotiating power,” Coakley said in a statement. “Today’s resolution is the first action of its kind to directly address that market dysfunction.”

But many in the health care industry say they’re frustrated and angry about the process.

The Rev. Burns Stanfield, president of the Greater Boston Interfaith Organization, says the group is disappointed the agreement bypassed the state’s Health Policy Commission

“A proper review would need to have the agreement available before it is submitted to the judge, and for the Health Policy Commission to be invited to weigh in,” he said.

Continue reading

No Court Filing Yet In Partners Deal To Expand

WBUR’s Martha Bebinger reports that a negotiated agreement that would have let Partners HealthCare expand to include South Shore and three other hospitals is on hold.

Partners and Attorney General Martha Coakley had planned to file a deal in court Monday that the AG said would curb Partners’ market clout.

But a spokesman for the AG says “both sides are continuing to negotiate based on the agreement in principle announced last month.”

Massachusetts Attorney General Martha Coakley (Steven Senne/AP/File)

Massachusetts Attorney General Martha Coakley (Steven Senne/AP/File)

The deal would have capped Partners expansion through 2020 after the network, which is already the largest in Massachusetts, was allowed to add the four hospitals and 550 more physicians. Partners had agreed to limit reimbursement increases to the cost of inflation, also through 2020.

But the agreement was criticized by competing hospitals who said it would lead to higher costs. Insurers, consumer groups and employers have asked to review the details before a deal is final. The AG’s office says it expects to allow public comment, although it’s not clear how.

The parties have not set a new date for a filing a final agreement.

Partners Showdown: Hospital Coalition Wants More Scrutiny Of AG Deal

A group of Massachusetts health care providers is asking Attorney General Martha Coakley (who also happens to be running for governor) to make public details of a deal which will allow Partners HealthCare to acquire three hospitals.

WBUR’s Dan Guzman spoke with Tufts Medical Center CEO Michael Wagner, who says the deal would have a big impact on the state’s health care marketplace. “The concern is that Partners is a system that has currently three times of the size of any system in Massachusetts,” he said. “With the proposed AG deal, this would take it to four times the size of the next largest system.”

The coalition also includes executives from Beth-Israel Deaconess Medical Center and Lahey Health. The deal, which would allow Partners to acquire three hospitals — South Shore, Melrose-Wakefield and Lawrence Memorial — in exchange for implementing certain cost-cutting measures, could go to a judge for approval as early as next week.

partners

Guzman also talked to Richard Copp, a spokesman for Partners, who said that for more than two years, there has been a process which has been transparent in the media and followed state regulations for this deal. Copp added that Partners believes the deal will result in more coordinated care and rein in cost growth for health care and that the health care system has followed the state process — there have been hearings and meetings, and Partners has followed the law.

Here’s the full press release from the coalition:

Healthcare providers across Massachusetts including Atrius Health, Beth Israel Deaconess Medical Center, Cambridge Health Alliance, Lahey Health Systems, Tufts Medical Center and other hospitals and physician groups have formed a coalition calling for a public process around the recently proposed settlement between Partners HealthCare and the Attorney General.

“Although we are competitors, we have joined together to draw attention to the threats posed to the Massachusetts healthcare system by the proposed deal between the Attorney General and Partners HealthCare,” said Howard Grant, JD, MD, president and chief executive officer of Lahey Health. “Members of the public, as well as healthcare providers, have received little information about this deal, though it will permanently transform how we deliver and receive healthcare. The proposal was crafted without the input of, or review by, the patients, doctors, nurses, caregivers, policymakers, employers, and other stakeholders who have worked so hard to reform the healthcare system.”

Coalition members yesterday delivered a letter to Attorney General Martha Coakley outlining concerns about the “significant and deleterious impacts” the proposed deal would have on the “entire Massachusetts marketplace” and raising questions about why the settlement proposal bypassed the Health Policy Commission’s Market Impact and Cost Review process. Continue reading

Pregnancy Woes: Why Did The Price Of My Progesterone Skyrocket?

(Photo: Rekha Murthy)

(Photo: Rekha Murthy)

By Rekha Murthy
Guest Contributor

Update: KV Pharmaceutical changed its name to Lumara Health, two days after this post was published.

I’m 34 weeks pregnant and working hard to keep this baby inside me for as long as possible. As with my last pregnancy, there’s a real risk that the baby could come too early. But we’re both holding on so far, thanks to a combination of luck, modified bed rest and medical science.

The science is my biggest concern right now. I will spare you much of it because, man or woman, you will instinctively cringe and close your legs. However, one critical medical intervention that has been proven to work for countless women and babies is again under threat, and I must speak up.

Every week, my husband injects me with 250 mg (1 ml) of 17 alpha-hydroxyprogesterone caproate (“progesterone” for short). Leaving aside what this does to an otherwise tender and loving marriage, these injections have been found to significantly lower the risk of preterm birth.

Two weeks ago, my insurance co-pay for progesterone went from $5.50 per dose to $70 per dose. Just like that. For those without insurance (or with a deductible), the medication went from $32.50 per dose, according to my local compounding pharmacy, to…wait for it…$833 per dose, according to the new pharmacy my insurer is now requiring me to use.

$833. Per. Dose.

Pricing varies somewhat across pharmacies and insurers, but not enough to make this price change any less breathtaking. In fact, the drug’s list price is $690 per dose.

The 12-fold leap in my co-pay sent an epic shock through my (natural and synthetic) hormone-laden system. I immediately called both pharmacies, my insurer, and my doctor, and started digging around online. I soon learned that the price increase came from a new requirement to buy expensive brand-name progesterone, instead of the affordable compounded version I had been getting. A disturbing picture came into focus. Continue reading

Restraining Partners? Rampant Speculation On A Deal In The Works

What’s up with that Partners-South Shore deal?

This question has come up in every conversation about hospitals in Massachusetts for the past three to four months, at least.  It’s important because the final resolution will be a benchmark for future hospital mergers, acquisitions and partnerships in Massachusetts and beyond. And it may finally address complaints that Partners Healthcare hospitals and doctors are paid more, in some cases much more, than most of their competitors.

If you’ve (understandably) lost track, here’s a recap:

partnersPartners announced plans to acquire South Shore Hospitals in June 2012.

The state’s Health Policy Commission concluded the deal would increase costs $23-$26 million a year.

Partners countered, saying that adding South Shore to its network, currently the largest in the state, would save $27 million a year.

The commission stuck to its original findings and sent a report to Attorney General Martha Coakley.  She, along with the U.S. Department of Justice, have been looking at whether Partners exploits its size and market clout to drive up health care prices and all of our premiums.

There are lots of theories about why we haven’t heard anything since Coakley acknowledged in March that she was in talks with Partners and South Shore.  Is there an impasse?  Are federal regulators clogging up the works?  What kind of pressure is Coakley (who is also running for governor) facing? I’ve heard all kinds of theories. Feel free to add yours below.

Coakley told the South Shore Chamber of Commerce last week that she expects to complete her review of the deal in a month or two.

Working with the Department of Justice, Coakley could sue to try and block Partners from bringing South Shore into its system.

But a deal that would limit Partners clout seems more likely. So what should it include?

Here’s where my random conversations with doctors, hospital executives and patients gets really interesting. The virtual water cooler chatter includes these possible scenarios:

1. Partners can add South Shore — and that’s it.  No further expansion for, say, five years or so (the time frame varies from three to 10 years). Keep in mind, Partners has already announced plans to acquire two North Shore hospitals after the South Shore deal is done.

2. Partners can add South Shore, but it must sell off another hospital of equivalent size or scope. Continue reading

Mass. Launches A Grand Experiment: Pricing Health Care

There’s a grand experiment underway in Massachusetts and we are all, in theory, part of it.

Here’s the question: Can we actually list prices for childbirth, MRIs, stress tests and other medical procedures, and will patients, armed with health care prices, begin to shop around for where (and when) they “buy” care?

One of the first steps in this experiment is a new requirement that hospitals and doctors tell patients who ask how much things cost. It took effect Jan. 1 as part of the state’s health care cost control law and we set out to run a test.

Our sample shopper is Caroline Collins, a 32-year-old pregnant real estate agent from Fitchburg who is trying to find out the price of a vaginal delivery. Her first call is to the main number at Health Alliance Hospital in Leominster. From there, she is transferred to the hospital’s obstetrics department. A receptionist there tells Collins to call the billing office at UMass Memorial Medical Center in Worcester, Continue reading

Partners On Anti-Merger Report: ‘Misleading,’ ‘Flawed,’ ‘Inaccurate’

partners

Partners HealthCare does not hold back in the response it plans to file today with the state’s Health Policy Commission (HPC). The commission issued a report last month that marked a rare effort to crimp Partners’ dominance in the Massachusetts market. The commission said that if Partners adds South Shore Hospital in Weymouth to its growing network, costs will increase around $23-26 million a year.

Wrong, says Partners, in an 89-page rebuttal that includes dozens of letters and testimonials from South Shore area leaders who support the merger. The commission should withdraw its finding, concludes Partners, and not send the proposed merger to the state attorney general for further regulatory review.

Some key points from Partners’ response:

1) The merger would not “add $23-26 million in annual physician health care costs.”

Partners says the HPC doesn’t understand how Partners’ physician contracts work. The assertion that the merger “will result in significant annual physician cost increases is based on material misunderstandings of both the Partners payer contracts and the process and goals of the parties’ proposed physician development efforts” in the South Shore Hospital area.

2) If there are any cost increases, they would be “offset” by better value and more efficient care.
Continue reading

The $26 Million Reason To Say ‘No’ To Partners

A merger between Partners HealthCare and South Shore Hospital would increase the state’s health care costs by $23-$26 million a year, according to a report due out today.

That substantial estimate from the state’s Health Policy Commission is based on three factors: more patients funneled to expensive Partners hospitals, higher payments for South Shore Hospital and more money for its doctors.

“Given the rather strange — bizarre some would say — pricing system in Massachusetts, by this merger, South Shore and the South Shore-affiliated doctors would get an immediate increase in their rates,” Stuart Altman, the commission board chairman, said.

(401(K) 2012/flickr)

(401(K) 2012/flickr)

The commission’s estimate, according to a summary of the report, does not include the effects of increased leverage Partners and South Shore could use to demand higher payments. The impact “will be substantial if payers are unable to prevent the exercise of this leverage in future negotiations.”

The report says there is no indication that this merger would improve quality or bring new services to the area.

Partners, which expects to receive the full report today, said the South Shore merger would improve care and lower costs. The state’s largest hospital network will have a chance to respond to the commission’s findings before they are final. Continue reading

Globe Scoop: Health Commission To Advise Against Partners Expansion

Have we entered a new era of tough hospital oversight?

That’s one possible takeaway from a Boston Globe report today that says the state’s new Health Policy Commission will — in a “a rare rebuke” — advise against an ambitious expansion plan by hospital system Partners Healthcare. The proposed acquisition of South Shore Hospital by Partners would “push up patients’ costs and stifle medical care competition in the region,” the Globe reports.

More from the story, by Rob Weisman:

partners

A report by the year-old Massachusetts Health Policy Commission details what might happen if Partners is allowed to acquire the 378-bed Weymouth hospital and a Partners-owned physicians group absorbs Harbor Medical Associates, which has 65 doctors on the South Shore.

It concludes Partners’ South Shore moves would not only increase premiums for consumers and employers and weaken rival providers, but also threaten the state’s ability to hit its overall target for holding down medical spending, according to several people briefed on the findings. Those people spoke on condition of anonymity because the report is not yet public.

The commission, created under the state’s 2012 cost containment law, lacks the authority to block Partners’ moves, but its findings come at a critical time for other regulators who do have that power.

Partners spokesperson Rich Copp said his organization had not yet seen copy of the Commission report, which he stressed is “preliminary.”

But he said: “This preliminary report creates an opportunity to begin a meaningful dialogue with the Health Policy Commission around our vision to reduce health care costs.” Continue reading

AG: Caremark To Pay MassHealth $2.6M For Not Reimbursing Pharmacy Claims

This just in from Massachusetts Attorney General Martha Coakley: Caremark, the national pharmacy benefits manager that also operates mail-order pharmacies, will pay $2.6 million to MassHealth — and $4.25 million in a multistate settlement — for failing to reimburse claims.

Mass. AG Martha Coakley (Wikimedia Commons)

Mass. AG Martha Coakley (Wikimedia Commons)

Here’s the AG’s news release:

A company responsible for processing and paying prescription drug claims will pay $2.6 million to the Massachusetts Medicaid Program (MassHealth) to settle allegations that the company failed to reimburse MassHealth for pharmacy claims paid on behalf of its subscribers, Attorney General Martha Coakley announced today.

Under the terms of the settlement with Massachusetts, Arkansas, California, Delaware, Louisiana and the Department of Justice, Caremark, L.L.C. will pay a total of $4.25 million. The $2.6 million paid to MassHealth represents approximately 63 percent of the total payment by Caremark.

“This settlement is the result of an investigation into allegations that Caremark failed to properly handle and reimburse pharmacy claims for certain customers in the Commonwealth, leaving MassHealth to foot the bill,” AG Coakley said. “Our office will continue to safeguard the taxpayers’ investment in programs designed to provide care and treatment to our most vulnerable citizens.”

Caremark, operated by CVS Caremark Corp., is a California limited liability corporation with its principal place of business located in Illinois. It operates as a Pharmacy Benefit Manager (PBM) throughout the United States and contracts with its client health plans to supply prescription drug distribution and claims processing to participants in the clients’ plans. Caremark also operates mail-order pharmacies, and contracts with retail pharmacies nationwide to dispense prescriptions to its Caremark Plan participants.

This investigation began in 1999 with the filing of a whistleblower lawsuit in United States District Court in San Antonio, Texas. The plaintiff in that case amended her complaint in 2005 to add claims on behalf of the Commonwealth under the Massachusetts False Claims Act.

The investigation reviewed allegations that Caremark improperly rejected, denied or reduced the reimbursement of pharmacy charges. Continue reading