New program draws bipartisan criticism and concern from patients and doctors.
Shrewd labs will keep an eye on the latest Centers for Medicare & Medicaid Services (CMS) prior authorization pilot that leans on artificial intelligence (AI) to determine treatment options for Medicare patients. While the Wasteful and Inappropriate Service Reduction Model pilot (WISeR) doesn’t directly mention lab tests, staying on the pulse of this growing trend will keep labs thinking ahead on how to minimize impact on bottom line, paperwork, and workflows when these pilots infiltrate lab testing.
An article from POLITICO reported that CMS will start a pilot version of the program as early as January 2026 in six states including Ohio, Texas, Oklahoma, Ariz., N.J., and Wash. Private AI companies will assist and focus on “services that have been vulnerable to fraud, waste and abuse in the past,” the article noted. The voluntary model is slated to span six years through December 31, 2031, according to the Centers for Disease Control and Prevention (CDC).
Among the types of procedures encumbered by the pilot program are knee arthroscopy for osteoarthritis, skin and tissue substitutions, and electrical nerve stimulator implants, CMS noted. All outpatient and emergency services would currently be excluded, they added, as well as “services that would pose a substantial risk to patients if substantially delayed.”
“All recommendations for non-payment will be determined by appropriately licensed clinicians who will apply standardized, transparent, and evidence-based procedures to their review,” CMS added.
The premise of the pilot is to eliminate wasteful spending, with CMS citing 25% of US healthcare spending falling in this category. “According to the Medicare Payment Advisory Commission Medicare spent up to $5.8 billion in 2022 on unnecessary or inappropriate services with little to no clinical benefit,” their website noted.
A Sour Reception
The pilot program is receiving a less-than-warm welcome from both parties—doctors, and patients alike, Politico noted. “It’s been referred to as the AI death panel. You get more money if you’re that AI tech company if you deny more claims. That is going to lead to people getting hurt,” Greg Landsman (D-Ohio) said during the committee hearing.
Landsman noted in the article from POLITICO that a bipartisan desire to put a halt to the program exists among growing concerns about patient harm coming from the program. Landsman “called for the program to be shut down until an independent review board could be erected to review the liability questions and ensure the AI prior authorization pilot doesn’t harm patients.”
“I’m concerned that this AI model will result in denials of lifesaving care and incentivize companies to restrict care,” Frank Pallone (D-N.J.) and House Energy and Commerce Committee ranking member said at the subcommittee meeting on the use of AI in health care held on Sept. 3.
“We have pretty good evidence that prior authorization as a process itself is fraught, adding that AI’s ability to improve the process for patients remains unproven,” Michelle Mello, Stanford University health law professor and witness at the hearing, said.
Looking Ahead
The involvement of AI in healthcare will only continue, and learning what aspects positively impact healthcare versus cause damage will continue to evolve.
Worth noting, there are already two unrelated lawsuits, against UnitedHealthcare and Cigna, that challenge the safety of AI use to deny patient care, POLITICO noted in the article.
Laboratory leaders should keep their eyes open and their ears to the ground on not only the pilot but all AI healthcare trends.
Drug companies claim HHS rule violates their first amendment rights, but added web links to drug prices in their TV ads anyway
Will American consumers ever see the prices of their
prescription drugs? That almost happened this summer, when a Trump
administration healthcare transparency initiative would have required
pharmaceutical companies to include prices in drug advertisements. But that
requirement was halted by a federal judge one day before it was scheduled to take
effect.
The measure, which passed in May, was intended to provide
healthcare consumers with price transparency for some prescription medications
and help lower prescription costs. However, a federal judge placed the new law
on hold citing government over-reach.
This is a significant development for clinical
laboratory managers, pathologists,
and others watching efforts that will enable patients to see the cost of their
medical care in advance of service. Also, few were surprised to learn that this
court case was filed by pharmaceutical companies with the goal of preventing
prescription drug prices from being disclosed in these advertisements.
HHS Tells Big Pharma to ‘Level with People’ About Drug
Costs
Reducing prescription drug prices is a critical issue for
healthcare consumers. Therefore, any policy that helps lower costs should
provide benefits for both patients as well as the healthcare industry overall.
That’s why President Trump signed the initiative that required pharmaceutical
companies to include drug prices in television advertisements.
“We are telling drug companies today: You’ve got to level with people [about] what your drugs cost,” Health and Human Services (HHS) Secretary Alex Azar (above) stated after Congress passed the President’s proposal, STATreported. “Put it in the TV ads. Patients have a right to know, and if you’re ashamed of your drug prices, change your drug prices. It’s that simple.” [Photo copyright: Washington Times.]
The controversial proposal, which would have applied to all prescription
drugs that cost more than $35 for a one-month supply, was scheduled to go into
effect over the summer until it was blocked by Federal Judge Amit Mehta of
the US District Court for the District of Columbia.
Judge Mehta ruled that HHS does not have the regulatory
power to force pharmaceutical companies to include the prices of prescription
drugs in their TV ads and that the agency had violated laws passed by Congress.
“That policy very well could be an effective tool in halting
the rising cost of prescription drugs. But no matter how vexing the problem of
spiraling drug costs may be, HHS cannot do more than what Congress has
authorized,” Mehta wrote in his decision, NPR
reported.
Drug companies Amgen
(NASDAQ:AMGN), Eli Lilly (NYSE:LLY) and Merck (NYSE:MRK) along with the Association of National Advertisers (ANA) filed
lawsuits over the regulation stating it was a violation of their free speech
rights. They won the reprieve on July 8, just one day before the regulation would
have gone into effect.
Mehta stated in his opinion
that the Social
Security Act, which HHS used as its basis for the regulation, does not
“empower HHS to issue a rule that compels drug manufacturers to disclose list
prices,” Fierce
Pharma reported.
In August, the Trump administration filed an appeal after the
federal judge struck down the regulation. The exact basis for that appeal has
not been disclosed.
Drug Companies Decry New Law as Unconstitutional
Many drug makers are not happy with the rule. Drug industry
trade group Pharmaceutical Research and
Manufacturers of America (PhRMA) believes that mandating drug companies to
disclose pricing in TV commercials is a violation of their First Amendment
rights, STAT reported.
Nevertheless, PhRMA proposed that pharmaceutical companies
provide a web link in their TV advertisements that directs consumers to pricing
information online. And some companies also are experimenting with going a step
further and voluntarily complying with the original regulation.
In a news
release, PhRMA states, “To help patients make more informed healthcare
decisions, [PhRMA] member companies today announced their commitment to
providing more transparency about medicine costs. PhRMA member companies’
direct-to-consumer (DTC) television advertisements will soon direct patients to
information about medicine costs, including the list price of the medicine,
out-of-pocket costs, or other context about the potential cost of the medicine
and available financial assistance. The biopharmaceutical industry will also
launch a new platform that will provide patients, caregivers, and providers
with cost and financial assistance information for brand-name medicines, as
well as other patient support resources.”
However, Azar said that action is not in compliance with the
rule. “They put $4 billion a year into television advertising because the
television ad is where people are getting their information, and to point them
to the internet would be the equivalent of saying that they should simply be
putting their ads on the internet and not running them on TV,” he told the
press, STAT reported.
Opponents of the rule noted that actual drug costs for
consumers can vary widely depending on coverage and that patients might forgo
their medications if they are concerned about the costs, reported Politico
following passage of the measure in May.
Critics also claimed that that there were no enforcement
mechanisms outlined for companies that did not comply with the ruling, and that
it relied on the pharmaceutical industry to police itself. If a particular
company failed to include the required information in its TV ads, competitors
could file suit against it under the deceptive and unfair trade practice
provisions of the Lanham Act,
Politico noted.
Solutions to the public’s demand for price transparency in
healthcare may be forthcoming. However, at press time, no further information
concerning the status of this HHS regulation was available. Dark Daily
will continue to monitor the situation and inform readers of any developments.
Meanwhile executives and pathologists at the nation’s
clinical laboratories should continue to develop strategies to serve patients
who want to know the prices of their medical laboratory tests before they arrive
to have their specimens collected.
This summer, several pharma companies may have succeeded in
getting a federal court to stop this particular rule to disclose prescription
drug prices. But the trend toward price transparency has deep roots and will
continue forward.
Meaningful Use Stage 3 focuses on interoperability, which is good news for medical laboratories that must spend time and money to develop effective LIS-EHR interfaces
On December 15, 2015, the final rule for Stage 3 meaningful use (MU) went into effect. By now, pathologists and clinical laboratory managers and personnel are well-acquainted with the MU incentive program and the myriad of challenges it presents for almost everyone working in the healthcare sector.
That’s good news for providers struggling with EHR attestation. However, the struggle for clinical laboratories isn’t with attestation per se, it’s with interoperability between lab information systems (LIS) and physicians’ EHRs. (more…)
