Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

CMA Alert – October 17, 2019

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  1. Center for Medicare Advocacy Board President Judith Feder Testifies at Drug Pricing Hearing 
  2. Administration’s “Public Charge” Rule [Temporarily?] Blocked
  3. Drug Company Sued Over Kickbacks for Off-Label Marketing of Psychotropic Drug for Nursing Home Residents to Pay Over $115 Million
  4. Joint Issue Alert on Medicare Payment and Skilled Therapy Services in Nursing Homes
  5. Free Webinar: Medicare Enrollment Issues for 2020 

Center for Medicare Advocacy Board President Judith Feder Testifies at Drug Pricing Hearing

On October 17, 2019, the House Ways & Means Committee held a hearing entitled “Investing in the U.S. Health System by Lowering Drug Prices, Reducing Out-of-Pocket Costs, and Improving Medicare Benefits.” The hearing focused on H.R. 3, the Lower Drug Costs Now Act (discussed in a previous Alert), as well as current gaps in Medicare coverage that could be filled using savings from lowering drug costs in Medicare.

Dr. Judith Feder, Professor at McCourt School of Public Policy at Georgetown University, and the President of the Board of Directors of the Center for Medicare Advocacy, was invited to testify about needed improvements to the Medicare program (her written testimony is available here). Dr. Feder’s testimony focused on the need to address four gaps in Medicare coverage:

  • Out-of-pocket costs Medicare beneficiaries face;
  • Specific gaps in benefits, including dental, hearing, vision and long-term services and supports;
  • Administrative barriers or biases, including diminishing access to the home health benefit, observation status, inappropriate steering towards Medicare Advantage plans coupled with the lack of access to Medigap plans; and
  • Investments to ensure the long-term sustainability of the Medicare program, including the need for more revenue.

At the same time as the Ways & Means hearing, the House Energy & Commerce committee marked up H.R. 3 and a suite of bills that would add improvements to the Medicare program.  The House Education & Labor Committee also marked up H.R. 3.

The Center wrote letters of support for H.R. 3 and the Medicare-related bills, with suggested improvements to the Ways & Means and Energy & Commerce Committees.

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Administration’s “Public Charge” Rule [Temporarily?] Blocked

Last week federal judges in several states issued temporary injunctions against the Trump administration’s “public charge” rule, preventing it from taking effect. The rule was set to take effect this week.

The “Public Charge” final rule, which was posted on August 14, 2019 to the Federal Register, amended Department of Homeland Security (DHS) regulations regarding how an application for legal immigration into this country would be assessed, expanding the government’s ability to deny entry based on the possible future use of services like Medicaid. The “Public Charge” rule stated that determinations can include whether the applicant “is likely at any time to become a public charge,” or rely on public benefits.

The rule broadened the programs that the federal government could consider in public charge determinations to include previously excluded health, nutrition, and housing programs, and outlined the factors the federal government would consider in making a public charge consideration.

In December 2018, the Center for Medicare Advocacy submitted comments to the proposed “Public Charge” rule, expressing strong opposition. The Center for Medicare Advocacy is also proud to be one of over 1,100 organizations that signed on to a statement in opposition to the proposed “Public Charge” rule. The Center applauds these court rulings.

Additional Information:

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Drug Company Sued Over Kickbacks for Off-Label Marketing of Psychotropic Drug for Nursing Home Residents to Pay Over $115 Million

Background

When the Centers for Medicare & Medicaid Services (CMS) launched a national campaign to reduce the off-label prescribing of antipsychotic drugs for nursing home residents in 2012, Avanir Pharmaceuticals directed its sales force to talk to nursing facilities about using Nuedexta as a substitute for antipsychotic drugs. The Food and Drug Administration had approved Nuedexta for treatment of pseudobulbar affect (PBA), “which is characterized by involuntary, sudden, and frequent episodes of laughing or crying, and occurs secondary to a neurologic disease or brain injury.”[1] Nuedexta is not approved for dementia. While physicians may prescribe medications for nonapproved uses, pharmaceutical companies may not market or promote drugs for off-label uses.

A CNN investigation in 2017 reported that between 2012 and 2016, sales of Nuedexta for nursing home residents increased more than 400%. In 2011, Medicare spent $3.9 million on Nuedexta for nursing home residents; in 2015, it spent $138 million. In 2012, residents took 2.83 million Nuedexta pills; in 2016, 13.95 million pills. CNN reported that Avanir was making hundreds of millions of dollars a year by selling Nuedexta for nursing home residents.[2]

On September 26, 2019, the U.S. Department of Justice and the U.S. Attorneys Offices for the Northern District of Georgia and the Northern District of Ohio simultaneously announced four lawsuits, two criminal and two civil, challenging Avanir’s off-label marketing and promotional activities to encourage the prescribing of Nuedexta for nursing home residents. Three of the cases were settled, with Avanir agreeing to pay a total of $115,874,895. Four people await criminal trial in Ohio.

Criminal Cases

A one-count criminal indictment in the Northern District of Georgia alleges that “Avanir violated the Anti-Kickback Statute by paying a doctor to induce him [through financial incentives] to become a high prescriber of Nuedexta.”[3] Under a deferred prosecution agreement, Avanir admits that it paid the physician to increase his prescribing of Nuedexta. Avanir will pay a monetary penalty of $7,800,000 and a forfeiture of $4,074,895. Prosecution is deferred because of Avanir’s “substantial and ongoing cooperation with the investigation”[4] and because a criminal conviction would lead to the company’s mandatory exclusion from all federal health care programs for at least five years,[5] harming consumers who legitimately need Avanir’s drugs.

An 83-count criminal indictment in the Northern District of Ohio charges two physicians and two Avanir salesmen with engaging in “a kickback conspiracy in which the doctors allegedly received money and other things of value in exchange for writing prescriptions for Nuedexta for patients that did not have [PBA].”[6] One of the physicians, a psychiatrist in Cleveland, wrote more prescriptions for Nuedexta than any other physician in the country – 10,888 prescriptions between October 2011 and April 2016 – and received $1500 for approximately each of 211 speaking presentations where he promoted Nuedexta to other health care professionals. The U.S. Attorney’s Office asks people who believe they have been victims to contact the FBI at 216-622-6963.

Civil Cases

Avanir settled two False Claims Act (FCA) cases with the United States, which alleged that between October 29, 2010 and December 31, 2016, Avanir violated the FCA by giving “money, honoraria, travel, and food to physicians and other health care professionals to induce them to write prescriptions for Nuedexta.”[7] Former employees of Avanir filed the whistleblower lawsuits under the FCA in the Northern District of Georgia and the Northern District of Ohio. The company has agreed to pay the United States $95,972,017 to settle the False Claims Act cases and $7,027,983 to states to resolve state Medicaid claims.

Conclusion

The four lawsuits make clear that the misuse of psychotropic drugs on nursing home residents remains a serious problem. CMS’s focus on antipsychotic drugs since 2012 has led to the increased use of other psychotropic drugs,[8] such as the inappropriate marketing and prescribing of Nuedexta, as well as false diagnoses that appear to make antipsychotic drugs appropriate.[9]

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[1] U.S. Attorney, Northern District of Georgia, “Pharmaceutical Company Targeting Elderly Victims Admits to Paying Kickbacks, Resolves Related False Claims Act Violations” (News Release, Sep. 26, 2019), https://www.justice.gov/usao-ndga/pr/pharmaceutical-company-targeting-elderly-victims-admits-paying-kickbacks-resolves.
[2] Blake Ellis and Melanie Hicken, “The little red pill being pushed on the elderly; CNN investigation exposes inappropriate use of drug in nursing homes,” CNN (Oct. 12, 2017), https://www.cnn.com/2017/10/12/health/nuedexta-nursing-homes-invs/index.html.
[3] U.S. Attorney, Northern District of Georgia, “Pharmaceutical Company Targeting Elderly Victims Admits to Paying Kickbacks, Resolves Related False Claims Act Violations” (News Release, Sep. 26, 2019).
[4] Id. Avanir’s cooperation included “capturing and producing text messages from employee cell phones, the extensive remedial measures taken by the company, including terminating, or permitting to resign in lieu of termination, multiple employees, at various levels of the organization, including senior executives, and its enhanced compliance program.”  The company also agreed “to resolve all civil claims relating to federal health care programs arising from its conduct.”
[5] The HHS Inspector General would impose mandatory exclusion pursuant to 42 U.S.C. §1320a-7.
[6] U.S. Attorney, Northern District of Ohio, “Physicians and pharmacy sales reps indicted for kickback conspiracy in which doctors allegedly received money in exchange for writing unnecessary prescriptions of Nuedexta” (News Release, Sep. 26, 2019), https://www.justice.gov/usao-ndoh/pr/physicians-and-pharmacy-sales-reps-indicted-kickback-conspiracy-which-doctors-allegedly. [7] U.S. Department of Justice, “Pharmaceutical Company Targeting Elderly Victims Admits to Paying Kickbacks, Resolves Related False Claims Act Violations” (Press Release, Sep. 26, 2019), https://www.justice.gov/opa/pr/pharmaceutical-company-targeting-elderly-victims-admits-paying-kickbacks-resolves-related.
[8] Donovan T. Maust, H. Myra Kim, Claire Chiang, Helen C. Kales, “Association of the Centers for Medicare & Medicaid Services’ National Partnership to Improve Dementia Care With the Use of Antipsychotics and Other Psychotropics in Long-term Care in the United States From 2009 to 2014,” JAMA Internal Medicine (published on-line Mar. 17, 2018), https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2674245?resultClick=1 (click on open).
[9] Jonathan D. Winter, J. William Kerns, Katherine M. Winter & Roy T. Sabo, “Increased Reporting of Exclusionary Diagnoses Inflate Apparent Reductions in Long-Stay Antipsychotic Prescribing,” Clinical Gerontologist, Vol. 42, Issue 3 (Dec. 2017), href=”https://www.tandfonline.com/doi/full/10.1080/07317115.2017.1395378″>https://www.tandfonline.com/doi/full/10.1080/07317115.2017.1395378 (abstract).

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Joint Issue Alert on Medicare Payment and Skilled Therapy Services in Nursing Homes

On October 1, 2019, the Centers for Medicare & Medicaid Services (CMS) implemented a new payment system for Medicare-covered nursing home stays—the “Patient Driven Payment Model” (PDPM). PDPM creates new financial incentives for nursing homes and new challenges for nursing home residents. One of the biggest challenges for residents under PDPM is access to skilled therapy.

The Center for Medicare Advocacy (the Center) and the Long Term Care Community Coalition (LTCCC) have developed a new Issue Alert to help residents and their families understand the implications of PDPM as it relates to Medicare-covered skilled therapy services in nursing homes. The Issue Alert also provides information about relevant federal standards of care to help residents and families in preventing and challenging skilled therapy denials.

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Free Webinar: Medicare Enrollment Issues for 2020

This presentation will address important Medicare enrollment issues, deadlines and materials, including the Medicare & You publication, and other CMS outreach and education materials.

Presented by Center for Medicare Advocacy Senior Policy Attorney David Lipschutz and guest presenters.

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