This spring, court cases are dealing with a variety of issues relevant to healthcare marketplace competition issues.  These include a Federal Trade Commission’s (FTC’s) action to block a sale of hospitals in North Carolina, examining the fiduciary duties employer-sponsored health plans have in selecting drug plans, and looking at the acceptability of non-compete clauses in physician contracts. FTC Files suit in North Carolina In February, the FTC authorization of a suit to block Novant Health’s proposed acquisition of two hospitals owned by Community Health Systems (CHS) in North Carolina.  On …

Healthcare Costs and Spending Arriving at a Fair Price in the Medicare Drug Price Negotiation Program: Considerations from Other Countries (Health Affairs Forefront) John K. Lin, James I. Barnes, Jalpa A. Doshi, Salah Ghabri, Peter Kolominksy-Rabas, Brian O’Rourke The Centers for Medicare and Medicaid Services (CMS) are slated to begin negotiating drug prices for a subset of Medicare drugs soon, due to the Inflation Reduction Act (IRA) of 2022. Recognizing the subjectivity involved in determining fair drug prices, this article highlights the authors’ perspectives on CMS’ current strategic shortcomings and analyzes …

In the last issue of California Legislative Beat, we examined some significant bills from year one of California’s 2023-2024 legislative term. Specifically, we focused on legislation that sought to make changes in healthcare competition, consolidation, and system reform. In part 2 of the 2023 session recap, we turn our attention to bills that aimed to tackle healthcare service and pharmaceutical costs, coverage, and price transparency.   Healthcare Costs and Coverage Californians can expect to be protected from surprising dental or emergency ground medical transportation bills soon. The legislature approved and …

Healthcare Prices and Cost In An Era Of Premium And Provider Price Increases, State Employee Health Plans Target Key Cost Drivers (Health Affairs Forefront) Sabrina Corlette, Karen Davenport Employer-sponsored health insurance premiums have outpaced inflation and are poised for significant rate hikes this year. State Employee Health Plans have been in a prime position to address health care costs. Administrators of these plans identified reference pricing, tiered network plans, and multi-payer purchasing initiatives as having promising results in addressing cost drivers. The Joint Distribution Of High Out-Of-Pocket Burdens, Medical Debt, …

Healthcare Costs and Spending A Study of the Cost of Care Provided in Physician Owned Hospitals Compared to Traditional Hospitals (Physician’s Advocacy Institute and the Physicians Foundation) Robert H. Aseltine and Gregory J. Matthews The Physician’s Advocacy Institution and the Physicians Foundation released a new technical report summarizing their findings from an investigation comparing the cost of care patients across Medicare’s 20 most expensive conditions in 2019 in physician owned hospitals (POHs) and traditional hospitals. The authors assessed the statistical similarities in cost, patient demographics, and comorbidity levels between hospitals in …

Consolidation and Competition A Doctrine in Name Only — Strengthening Prohibitions against the Corporate Practice of Medicine (NEJM) Jane M. Zhu, Hayden Rooke-Ley, and Erin Fuse Brown The NEJM perspective examines state corporate practice of medicine laws that prevent ownership or control of physician practices by corporate entities. In an accompanying audio interview, Erin Fuse Brown discusses the role of these laws, including the usefulness and how they could be strengthened. Competition in Commercial PBM Markets and Vertical Integration of Health Insurers with PBMs: 2023 Update (American Medical Association) José R. …

On December 10, 2020, the Supreme Court overturned a decision by the Eighth Circuit and upheld an Arkansas Law to regulate pharmacy benefit managers (PBMs).  In a unanimous decision (8-0, Justice Barrett did not participate in the case), the court reaffirmed that state regulation of prices is not preempted by the Employee Retirement Income Security Act of 1974 (ERISA). The ruling in this case found that Arkansas’ law was a price regulation.  In effect, the law required PBMs to reimburse pharmacies at a rate above the price the pharmacy paid …

On October 6, the Supreme Court will hear oral arguments in the case Rutledge v. Pharmaceutical Care Management Association (PCMA). A decision in this case will resolve whether an Arkansas law to regulate pharmacy benefit managers (PBMs), Act 900, is preempted by federal law and  may affect the enforceability of similar laws passed by at least thirty-five other states.[1] Arkansas passed Act 900 to protect pharmacies from dispensing drugs at a loss. Specifically, the law requires PBMs, when challenged by a pharmacy, to raise the reimbursement rate for a drug …

Senior Health Policy Researcher Katie Gudiksen was quoted in the 4/1/2020 Pharmacy Today article The skinny on the PBM case before the U.S. Supreme Court: “Many people incorrectly equate the term ‘ERISA plan’ with ‘self-funded plans,’” said Katherine L. Gudiksen, PhD, MS, who is senior health policy researcher for The Source on Healthcare Price and Competition, a program associated with the University of California Hastings College of the Law. “Congress saved any state insurance law from ERISA preemption, so states [are able to] continue to regulate insurance—including health insurance—in the state,” …

The Source has been closely following legal challenges to state legislation that seek to promote competition and contain costs in healthcare services. In this month’s Litigation and Enforcement Highlights, we roundup the latest developments in some of the pending cases as well as new lawsuits that have been filed to derail state efforts to address rising prescription drug costs.   Arkansas: Supreme Court Grants Review of PBM Law In November 2019, the Source Blog covered the long litigious history of lawsuits filed against various pharmacy benefit manager (PBM) laws from …