00;00;08;28 – 00;00;20;29
Kathleen Haddad
Hello and welcome to another episode of Health Affairs This Week, the podcast where Health Affairs editors go beyond the headlines to explore some of the most notable health policy news of the week. I’m Kathleen Haddad.

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Chris Fleming
And I’m Chris Fleming.

00;00;23;19 – 00;00;46;10
Kathleen Haddad
Today, we’ve decided to take a look at recent health policy litigation. We’ll look at three issues which have been prominent in the past weeks and months. In one set of cases, providers are challenging federal rules governing their payments under the No Surprises Act. The law enacted last year to ban surprise medical bills. Another conflict also concerns provider payment.

00;00;46;19 – 00;01;17;25
Kathleen Haddad
Specifically, whether and when consumers can count the value of drug manufacturer coupons towards their deductibles and out-of-pocket maximums. A third issue involves a challenge to ACA’s preventive services coverage mandate. So Chris, let’s start with the litigation around the No Surprises Act or the NSA. Last week, the Texas Medical Association sued the Biden administration again over the NSA’s independent dispute resolution process.

00;01;18;02 – 00;01;47;13
Kathleen Haddad
And this came after a string of lawsuits about the same topic. Let’s recall that the NSA prohibits out-of-network doctors and other providers from, in most circumstances, billing patients at rates higher than in network amounts. It seems, however, that surgeons and anesthesiologists among other providers are not happy with the process set up by the government to resolve disputes over what insurers should pay these providers when there’s no network fees SCO to go by.

00;01;48;05 – 00;01;50;07
Kathleen Haddad
Chris, what’s happening with this litigation?

00;01;51;28 – 00;02;21;14
Chris Fleming
Well, it’s as they as I think it was Yogi Berra used to say it’s déjà vu all over again, Kathleen. As you mentioned, the previous like the previous case brought by the Texas Medical Association, this current lawsuit focuses on the NSA’s independent dispute resolution or IDR. It focuses on that framework, which, as you alluded to, is the arbitration mechanism that decides how much a payer, like an insurer or an employer plan, will pay an out-of-network provider.

00;02;22;04 – 00;02;36;27
Chris Fleming
And the IDR in the No Surprises Act is what’s known as baseball style arbitration, which means that both sides pick a number. The arbitrator picks one or the other. There’s no compromising or averaging or that sort of thing.

00;02;37;04 – 00;02;40;11
Kathleen Haddad
So I get the Yogi Berra reference, Chris.

00;02;41;20 – 00;03;05;23
Chris Fleming
I wish I could claim that I was that clever. It was accidental. But anyway, more specifically and also like the earlier case, this current suit focuses on something called the qualifying payment amount or QPA, and that’s roughly what the payers median rate is for in-network for the service involved in the same geographic area, in the same market.

00;03;06;07 – 00;03;30;02
Chris Fleming
Now, there was a interim rule previously that the Biden administration had issued to implement the NSA that established a, quote, rebuttable presumption, unquote, in favor of the QPA. And all that meant was that the arbitrator should choose the number closest to the QPA as the payment amount, unless one of the parties and usually the provider offered good evidence that the QPA was not the appropriate out-of-network amount.

00;03;30;20 – 00;03;55;13
Chris Fleming
So in that earlier case, Texas Federal District Court Judge Jeremy Kernodle agreed with the Texas Medical Association that the rebuttable presumption gave too much of a privileged position to the QPA more than the statute, more than the NSA intended. Now, in response to that decision, the Biden administration issued a new rule, a new final rule that eliminated the rebuttable presumption.

00;03;55;23 – 00;04;17;16
Chris Fleming
But the TMA sued again, claiming the new rule still gives too much prominence to the QPA. And the suit is not only back in federal district court in Texas, but it’s in fact back in front of Judge Kernodle. Now, one thing I want to emphasize, however this turns out it’s important to know consumers will still be protected by the NSA from surprise medical bills.

00;04;17;26 – 00;04;29;23
Chris Fleming
But what could happen if the Texas Medical Association is ultimately successful in this new litigation? What that could mean is higher awards from IDR cases and thus higher health care costs.

00;04;30;17 – 00;04;42;20
Kathleen Haddad
So Chris, what you’re saying is, if I understand this, is that the government did what the plaintiffs wanted, but the plaintiffs are still not happy. Do you know what they’re asking for now?

00;04;43;21 – 00;05;08;01
Chris Fleming
Well, they’re basically asking for the any sort of privileged position for the QPA to be eliminated. They basically want an unbiased, they view the QPA as biased towards insurers and payers, and they want what they think of as an even playing field where the QPA is not given any sort of preference.

00;05;08;12 – 00;05;38;09
Kathleen Haddad
Okay. So let’s move on to another payment issue in the courts. Several weeks ago, a coalition led by the HIV and Hepatitis Policy Institute, consumer advocates filed suit here in D.C. Federal District Court against pharmacy benefit managers. They said the PBM’s won’t count the value of their coupons for expensive drugs, such as HIV prophylactic treatment. They won’t count it toward a consumer’s deductible or annual out-of-pocket maximum.

00;05;38;18 – 00;05;56;14
Kathleen Haddad
So that means, as I understand it, that patients get help paying for the drugs, but they can end up paying huge amounts in the long run anyway, and deductibles until they reach their annual maximum, which is often tens of thousands of dollars. So what’s this legal conflict about, Chris?

00;05;57;05 – 00;06;32;15
Chris Fleming
Ah yes this can get complex even by health policy standards. So these programs that are involved here that are controversial are known as accumulator adjustment programs or sometimes copay accumulator programs. As you note that drug companies sometimes provide coupons or cards to help consumers pay cost sharing requirements for brand name drugs. Now, on the plus side, what that can do, helping with cost sharing can make it more probable that consumers will take the drugs as intended, and that could be particularly a big deal when you’re talking about chronic conditions.

00;06;32;23 – 00;06;46;13
Chris Fleming
On the flip side, these programs can also undermine incentives in formularies to use cheaper generic drugs, and that encourages consumers to use the more expensive brand name drugs, which in turn can increase health care costs.

00;06;46;21 – 00;07;03;29
Kathleen Haddad
So Chris, let me just say the other flip side that I’m aware of is that once these coupon programs end they’re often time limited, then consumers or patients may stop using their medication or try to spread it out. But that’s not a legal issue. So let’s get back to that.

00;07;04;09 – 00;07;39;09
Chris Fleming
Well, but that is true, that sometimes these assistance, the amount of assistance from the drug companies are capped. And if the consumer hits that cap, what you’re talking about happens that they all of a sudden are hit with these huge bills and that can impact compliance at that point. So there’s a little bit of a checkered history here that in the final 2020 payment rule, the Trump administration basically banned accumulated adjustment programs for brand name drugs where there wasn’t a generic version available.

00;07;39;18 – 00;08;17;16
Chris Fleming
But then a few months later, they delayed enforcement of that policy. And then the next payment roll, the 2021 payment rule, they reversed course completely and allowed accumulator adjustment programs in all cases. Now, states some states, though, have actually banned these programs for the fully insured health plans that are under their jurisdiction. Now, in this litigation, Kathleen, the plaintiffs are arguing that the co-pay accumulator policy are included in the 2021 payment notice, which basically allowed them that that’s unlawful on a number of grounds.

00;08;17;16 – 00;08;25;07
Chris Fleming
It conflicts with the ACA and agency regulations. They also claim it’s arbitrary and capricious under the Administrative Procedure Act.

00;08;25;16 – 00;08;41;13
Kathleen Haddad
So this is becoming clear to me. I hope it is to our listeners as well. There is another court case, a recent significant decision affecting the ACA’s preventive services coverage mandate. Right. Chris, can you tell us about that?

00;08;42;01 – 00;09;13;06
Chris Fleming
I can. Now, the mandate is in section 2713. It requires health plans to cover without consumer cost sharing, preventive services that are approved by various bodies, including the most relevant to this case, the United States Preventive Services Task Force. Most of the litigation regarding Section 2713 has involved challenges to the contraceptive coverage mandates that have arisen from that, and those challenges have been based on religious freedom claims.

00;09;14;02 – 00;09;38;22
Chris Fleming
This recent case, however, offers a little bit of a different take. The plaintiffs, among other claims, and the plaintiffs, a group of companies and individuals, argued that the task force and other bodies charged by the ACA with approving preventive services, that they violate the appointment’s clause of the Constitution. Now, that doesn’t come up all that often compared to some of the other provisions in the Constitution.

00;09;38;29 – 00;10;09;01
Chris Fleming
It requires officers of the United States to be appointed by the president and confirmed by the Senate. Judge Reed O’Connor, who is a repeat player in the ACA litigation world and once famously held the entire ACA unconstitutional, he agreed in the case of the Preventive Services Task Force. He found that the power granted by 2713 to the task force to determine what preventive services must be covered that make the task force members officers of the U.S..

00;10;10;01 – 00;10;28;22
Chris Fleming
Since the members were appointed by the head of AHRQ, the Agency for Health Care Research and Quality, and not the President. He held that the appointment’s clause was, in fact, violated. Now, he didn’t find constitutional violations for the other bodies, like the Advisory Committee on Immunization Practices, because there were slightly different circumstances there.

00;10;29;03 – 00;10;40;28
Kathleen Haddad
Okay. So, Chris, you mentioned there was a religious freedom aspect in this case or some related cases. Is there one in this case specifically?

00;10;41;16 – 00;11;11;17
Chris Fleming
There is, indeed. Now, one of the plaintiffs argued that requiring him to cover Prep, which is a daily antiviral medication that helps prevent high risk individuals from getting HIV, that violated his rights under the something called the Religious Freedom Restoration Act. He claimed that the covering this drug or he claimed that this drug facilitate sex, same sex, sexual relations and sexual activity outside marriage, and that violated his religious beliefs.

00;11;11;18 – 00;11;46;19
Chris Fleming
And again, Judge O’Connor agreed. He said that the Prep coverage mandate did not meet the referral requirement, that if you’re going to substantially burden someone’s religious practice and belief, that meant that you had to have choose the least restrictive means of achieving a compelling government objective. So he cited a statement by Justice Alito in the Supreme Court case of Hobby Lobby a few years back, where Justice Alito had said in that case that the government, if it wanted to, could directly fund contraceptives.

00;11;46;19 – 00;12;10;13
Chris Fleming
And in this case, Judge O’Connor said the government could have just directly funded Prep. Now, it’s not clear how far Judge O’Connor’s rulings will extend, whether they’ll go beyond the parties in the case and maybe apply in a national basis. And if so, whether he’ll stay as ruling pending appeal. So Kathleen, we’ve, of course, covered these cases very quickly.

00;12;10;13 – 00;12;46;07
Chris Fleming
We left out a lot of details. I would really encourage listeners to read the full Health Affairs Forefront write ups of the lawsuits, if they haven’t already. And of course, these three cases we’ve talked about, they’re only a smattering of the usual smorgasbord of health policy litigation that’s out there. Just one more example I’ll point listeners to in its upcoming term, the Supreme Court will consider the case of Health and Hospital Corp V. Talevski and that’s a huge case that could determine whether Medicaid enrollees can continue accessing the courts when they believe states have violated their constitutional rights.

00;12;47;05 – 00;13;09;21
Kathleen Haddad
Chris, thank you for your legal clarity on these issues. These are all complicated legal matters. So let’s wrap up for now and give our listeners some time to absorb it. Thanks for tuning in. Please leave us a review. And if you like this episode, please tell a friend and subscribe to Health Affairs This Week wherever you get your podcasts.

00;13;10;01 – 00;13;10;24
Kathleen Haddad
Thanks, Chris.

00;13;11;14 – 00;13;26;16
Chris Fleming
Thanks, Kathleen. And thanks to everyone.