Health insurers and medical providers are fighting over who should provide high-cost infusion drugs for patients, with the fight over profits now spilling into state homes across the country.
The problem is that some insurers are bypassing hospital pharmacies and doctor’s offices and instead shipping more complex drugs through third-party pharmacies. Those pharmacies then ship the drugs directly to the doctor or outpatient infusion facility, which is called a white bag, or, more rarely, to patients, in what is called a brown bag. This displaces who can buy and bill for these complex drugs, including expensive chemotherapy drugs.
Insurers say the policies are needed because hospital charges are too high. But hospitals say adding a middleman comes with unnecessary risk and delay, and say some insurers have their own or affiliated drug companies, creating financial reasons to control the source of drugs. Patients, meanwhile, have to deal with paperwork.
Paula Bruton Shepard in Bolivar, Missouri is among those caught in the middle. Flashes of lupus, an autoimmune disease, rob Shepard of her mobility by attacking her joints. She relies on monthly infusions to treat her symptoms. But sometimes, she said, her treatments have been delayed because of UnitedHealthcares’ white bag infusion policy. And breaks in her treatments have exacerbated her symptoms.
I once had to use a bathroom lifter and it was a little demoralizing to say, “I’m a 50-year-old female and I have to use a bathroom lifter,” Shepard said of the delays in administering medication.
This is a tug-of-war over profits between insurers and medical providers, said Ge Bai, a professor of accounting and health care policy at Johns Hopkins University. While insurers say the deal cuts costs, he said, that doesn’t mean insurers are passing the savings on to patients.
I don’t think we should have more sympathy for one side or the other, Bai said. No one is better than the other. They are all trying to make money.
The savings from the white bag can be significant for expensive infusion drugs, according to a report from the Massachusetts Health Policy Commission. For example, Remicade, used to treat a variety of inflammatory diseases, including Crohn’s, cost an average of $1,106 per unit in 2015 under the hospitals’ traditional purchase-and-bill system, the committee found in its review of data on drug claims. state compensation. The same drug cost an average of $975 per unit under the white bag, a savings of 12%.
But the report also found that patients, on average, faced higher costs sharing what they are responsible for paying for Remicade and other drugs when the white bag was used. While some patients had only modest cost increases under the policy, such as an extra $12 for a drug, the review found that could mean much greater cost sharing for some patients, such as those on Medicare.
At Citizens Memorial Hospital in rural Bolivar, more than 1 in 4 patients who receive regular infusions are forced to use an outside pharmacy, said Mariah Hollabaugh, director of pharmacy at the hospital. Shepard was among them.
Even if the hospital has the exact drug on the shelf, patients must wait for a separate shipment, Hollabaugh said, potentially disrupting care. Their shipped medications can sometimes be unusable when the doctor needs to change the dosage. Or the medicine arrives in a nondescript package that isn’t immediately marked for the pharmacy, potentially subjecting the medicines to harmful temperature fluctuations. For patients, this can mean delays in treatment.
“They’re in pain, they’re uncomfortable,” Hollabaugh said. They may have symptoms that don’t allow them to go to work.
The Siteman Cancer Center, led by doctors at Washington University School of Medicine in St. Louis, has faced the same problem. But the size of the cancer centers has largely helped her avoid such insurance policies.
John DiPersio, an oncologist and Siteman researcher who has led the university’s oncology division for more than two decades, said Siteman reluctantly allows white bagging for simple injectables but refuses to accept it for complicated chemotherapies. He doesn’t accept brown bags. Occasionally, he said, that means turning patients away.
You’re talking about cancer patients who are receiving life-threatening treatments, DiPersio said, referring to the dangers of chemo drugs, which he said can be fatal if used improperly. It doesn’t make any sense to me. It’s all stupid. It’s all madness.
At least 21 states, including Missouri, introduced some form of brown or white bag legislation during the last legislative session, according to the American Society of Health-System Pharmacists. And in the past two years, the trade group said, at least 13 states have already enacted restrictions on white bagging, including Arkansas, Louisiana and Virginia.
ASHP has created model legislation to restrict insurers from requiring the files as a condition of coverage.
That’s a big deal, said Tom Kraus, group vice president of trade. We consider it critical to our ability to coordinate patient care.
At the heart of the tension is an oft-disputed federal program that allows some hospitals and their-owned clinics to buy drugs at steep discounts. The 340B program, named after a section of the law that created it, allows hospitals to purchase certain drugs for much less sometimes for a total cost of just one cent of what is subsequently paid for those drugs. Hospitals are not required to pass on 340 billion savings to patients.
The program was intended to help hospitals further spread scarce resources to treat patients in poor and vulnerable communities, but it has turned into a means to enrich hospitals and their affiliated clinics, researchers said in a Health report. Affairs of 2014. Hollabaugh said that many rural facilities like Citizens rely on revenue generated from 340B drugs to subsidize infusions that have no profit margins.
The number of participating hospitals and their affiliated outpatient clinics has increased significantly since the 340B program was created in 1992. More than 2,600 of the nation’s approximately 6,100 hospitals were participating in the 340B program as of January 2023. This allows them to access discounts that can slash up to 50 percent of the cost of a drug, according to the Health Resources & Services Administration, which oversees the program.
The insurance industry argues that hospital markups, especially when applied on top of such discounts, have spiraled out of control.
The fact is, people have gotten greedy, said Shannon Cooper, a lobbyist for Kansas City’s Blue Cross and Blue Shield, during a Missouri state Senate hearing in March.
The markups aren’t unique to 340B hospitals, said Sean Dickson, who helps lead drug policy for AHIP, a trade group formerly known as Americas Health Insurance Plans. The markups placed on commercial plans are vastly out of line with what Medicare will pay, he said, and that is driving up costs without providing added value.
Legislation targeting white looting hampers insurers’ ability to curb those costs, Dickson said, especially when an area lacks competition.
What we’re really trying to focus on here is lobbying those markups that aren’t related to cost or safety, Dickson said.
Anthem Blue Cross and Blue Shield lobbyist David Smith testified during the March hearing in Missouri that the white bag idea also elicited a quick response, and that nearly every major hospital system in the state said they would lower rates. prices and they would return to the negotiating table .
For now, Citizens Memorial Hospital and other Missouri medical facilities will have to keep dancing with insurers: Legislation to limit brown and white bagging did not pass during the recent session of the Missouri General Assembly.
Shepard, however, won’t need such legislation.
UnitedHealthcare has been sending its lupus infusion through other pharmacies since 2021, not wanting to cover the drugs if they came from Citizens’ in-house pharmacy. Shepard had to authorize each shipment before it was sent. If he missed the monthly call, he said, it was a bureaucratic mess trying to get the drug shipped.
We are removing unnecessary costs from the healthcare system to help make care more affordable, while maintaining drug safety, efficacy and quality of care, wrote UnitedHealthcare spokesman Tony Marusic.
But after KFF Health News asked about Shepard’s case, Marusic said UnitedHealthcare has stopped bagging Shepard’s drugs to prevent potential shipment delays. And during her last infusion in June, her hospital was once again able to directly deliver drugs to Shepard.
I’m so relieved, Shepard said. I don’t have to answer phone calls. I don’t have to answer emails. I just introduce myself.
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