J.D. Allen & Mackenzie Maher
Hospital costs are rising fast, and Connecticut and New York legislators say they’re trying to regulate the culprits, like prescription drug and out-of-network service prices.
In Connecticut, Attorney General William Tong has amended and expanded his office’s complaints against 20 of the nation’s largest generic drug manufacturers for what he says is their role in driving up prices.
“Much of the generic drug industry is rigged and that there is rampant price fixing and market allocation in violation of our nation’s antitrust laws. And that our prices that we pay for drugs, particularly generic drugs, is artificially high.”
Tong met with state lawmakers at a forum in New Canaan this week to discuss measures being taken in the General Assembly to combat the rising drug prices.
Legislation that takes effect in January will require drug companies to justify large price increases.
There’s also a bill in the works that allows for inexpensive drugs to be imported from Canada.
AARP says that would save the average person up to 55% at the pharmacy counter.
The state also plans to introduce changes to how it regulates prescription drugs in the state employee health plan.
State Comptroller Kevin Lembo says he will negotiate directly with hospitals and health care providers to contain costs, instead of creating one drug plan for the whole state.
“You know, it doesn’t make sense to pay an insurance company a percentage off the top of every medication that gets filled because it incentives filling more expensive drugs than necessary, just as an example.”
The plan would include flat reimbursement on drug refills, upfront information on treatment cost and affordable pricing.
Lembo says patients are unaware of how medication costs get out of hand. He blames that on the “bad behavior” of the pharmaceutical and insurance industries.
Meanwhile, New York Governor Andrew Cuomo has signed legislation that protects patients from excessive out-of-network hospital emergency charges and follow-up inpatient care.
State Senator Phil Boyle from Long Island, who co-sponsored the bipartisan law, says patients are protected against the big bills.
“Really the idea is that they can’t gouge, that’s what we were most concerned about. When you hear something about a procedure that normally costs $400 and suddenly they were getting a bill for $4,000 there’s something wrong with that picture. And that’s what we want it to guard against and that hospitals had to make sure that was not occurring either.”
The new law requires health insurance companies to ensure patients will not incur greater out-of-pocket costs than they would have from a participating provider, when enrollees receive care outside their insurance network.
At the same time, a government watchdog group says New York needs to get its Medicaid spending under control. The Empire Center is concerned the state will consider delaying $1 billion in payments to avoid piercing its annual cap for the second time in a year.
New York did it before in March behind closed doors, and it concerned hospitals and health care providers that rely on that money.
“All indications are they are probably going to try to do another payment delay next year. This time it will be more open. I still think that’s a bad idea because you’re putting yourself on a slippery slope in terms of maintaining a balanced budget,” said Bill Hammond, the Empire Center’s director of health policy.
New York’s Medicaid health plan has already spent more than 60% of its state-funded budget, putting the program on track to end the year with a nearly $3 billion shortfall.
Providers worry that more delays could result in layoffs and suspended services that would impact the one-third of New Yorkers who receive Medicaid.
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