The third time, he sought help from an insurance agent, who got Jones on the phone with the federal healthcare.gov call center to sort things out. During that call, “literally, there was someone opening a new policy without my consent,” Jones said.

Despite new rules that went into effect in mid-2024 aimed at thwarting such unauthorized ACA changes, it’s still happening, said Florida-based agent Jason Fine, who is trying to help Jones and dozens of other clients unravel such switches.

The Government Accountability Office, an independent government watchdog, on Dec. 3 issued a saying that years of similar GAO warnings to federal officials have not produced results needed to better protect against ACA enrollment fraud. Alarms were raised during the Obama and Biden administrations, as well as the first Trump administration.

There were to the Centers for Medicare & Medicaid Services about unauthorized ACA enrollments and plan-switching in 2024, according to the agency, which also administers Obamacare coverage.

“The absolute bottom line is nothing has changed in terms of risk,” Seto J. Bagdoyan, a co-author of the GAO report, said in an interview with ºÚÁϳԹÏÍø News. Bagdoyan is the director of audit services for the agency’s Forensic Audits and Investigative Service team.

The report landed as Congress in the issue of whether to extend the more generous tax subsidies that have given consumers extra help paying their Obamacare premiums in recent years. Some ACA critics have said .

Citing fraud concerns, included measures in their One Big Beautiful Bill Act that will make it harder to enroll in ACA plans in future years, such as requiring . But lawmakers have not adopted to impose criminal penalties on brokers who knowingly submit false information on ACA enrollments.

“None of the Republicans making political hay out of this report have co-sponsored that legislation or offered any similar measures,” Sen. Ron Wyden (D-Ore.) said in a statement to ºÚÁϳԹÏÍø News. Wyden is one of the sponsors of the legislation.

The GAO inquiry, during which investigators attempted to submit enrollments using false information, was requested more than a year ago by Republicans from three House committees: Energy and Commerce, Judiciary, and Ways and Means.

The lawmakers asked for findings that could be made public now, even though the final report and any recommendations it will contain won’t be completed until the spring or summer of 2026. the findings was set by House members for Dec. 10.

The report notes that federal officials estimate that $124 billion in tax subsidies were paid in 2024 for nearly 20 million ACA enrollments.

It highlighted some stunning findings. One Social Security number, for instance, was found to have been used for 125 policies in 2023.

However, the number of policies flagged as potentially compromised by rogue sales agents was far smaller than the estimates of some of the program’s biggest critics. The GAO identified about 160,000 cases in 2024, or 1.5% of the ACA applications. Some conservative analysts have broadly estimated that unauthorized enrollments that year numbered in the millions, a finding that has drawn pushback from groups representing , , and

The GAO report does not quantify how much fraud there is, Bagdoyan said: “What it’s focusing on are indicators of potential fraud.”

CMS Anti-Fraud Efforts Fall Short

By October 2024, following consumer complaints, CMS over questions about whether they had been involved with unauthorized enrollment. All were eventually reinstated, CMS told the GAO in May. Also last October, the GAO submitted the first four of its fake applications, seeking coverage for the final months of the year.

A few months earlier, in July 2024, CMS began requiring three-way calls with consumers, the marketplace, and their agents for certain types of changes, such as plan switches. Unauthorized plan-switching nets rogue agents a sales commission, and it can also lead to problems for consumers, such as losing access to their doctors or facing tax bills if they were improperly enrolled with subsidies, as ºÚÁϳԹÏÍø News reported in 2024.

However, the GAO reported that many agents told them those rules had a lot of loopholes, such as the federal marketplace taking only “limited steps to verify the identity of the consumer on the three-way call,” for instance asking only for publicly available information such as a name and date of birth.

Also, new ACA applicants were exempt from the three-way call rule, which leaves open the possibility of agents saying it’s a new consumer when it isn’t.

“The three-way call is something CMS has promoted,” Bagdoyan said. “It’s better than nothing, but as we point out in the report, it could be easy to overcome by an unscrupulous broker who starts the process from scratch. Or they could impersonate.”

Fine, the agent in Florida, said he alone has filed dozens of complaints with federal and state officials, often showing clients’ records being accessed or changed by multiple agents, sometimes on the same day, even after the CMS rules on plan-switching went into effect.

In one such fraud complaint, Fine listed three marketplace applications tied to one client’s name in which other agents had changed his coverage and included false income information. The client didn’t recall talking with any of those other agents, Fine wrote.

A marketplace representative who was helping Fine restore that client’s coverage told Fine that he often hears agents pretending to be the consumer, sometimes even faking the voice of an opposite-sex person.

Rogue agents can fake it because questions asked by marketplace representatives to verify identity “are from the application: the person’s name, date of birth, and address,” Fine said. “That’s the ID proofing. It’s a joke.”

Asked about the effectiveness of the three-way call rule and about reports of impersonations, CMS spokesperson Catherine Howden said in a statement that “rooting out waste, fraud, and abuse is one of Dr. Oz’s top priorities,” referring to CMS Administrator Mehmet Oz. The agency “takes allegations of fraudulent or abusive conduct seriously and acts swiftly when concerning behaviors are identified or reported,” she added.

Ronnell Nolan, the president and CEO of the insurance broker lobbying group Health Agents for America, said: “Three-way calling is a bust. It needs to go away.”

Instead, she has long called for two-factor authentication, similar to systems used in banking and other industries, to ensure the person making the change is actually the policyholder or their agent.

That hasn’t happened on the federal marketplace, where the problems with unauthorized switching are concentrated.

In the , that run their own ACA marketplaces, such issues are not common. States say that’s because they require more types of authentication — and they also generally use their own websites for sign-ups.

Bagdoyan said the GAO report did not consider what the states might be doing differently.

“That was beyond our scope,” he said.

Devilish Details

The 26-page document outlines the GAO’s probe, in which investigators filed 20 fake enrollments, some through insurance brokers, spanning 2024 and 2025 coverage. Most were approved, even with counterfeit documents.

One attempted application was dropped by investigators when the broker stopped responding — the brokers did not know they were part of the investigation — and another was rejected by the federal marketplace after five months of coverage when required documents were not submitted. But 18 of the plans remain in place and subsidies are being sent to insurers to cover the fake people, according to Bagdoyan.

The investigation also included an analysis of enrollment data from 2023 and 2024 looking for things such as multiple uses of the same Social Security numbers, dead people’s numbers, and cases in which three or more agents submitted enrollment actions for the same person and start date, potentially indicating fraud.

Similar investigations using the filing of fictious enrollments were conducted by the GAO in earlier undercover work , at the start of the ACA.

The new report said that while CMS assessed fraud risks in 2018, it has not updated its assessment since then, even as enrollment in the ACA has grown significantly.

“We have documentary evidence that whatever it is they did, obviously it hasn’t worked,” Bagdoyan said, “because we encountered the same issues as 12 years ago, having to do with identity verification.”

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“As Wall Street firms take over more nursing homes, quality in those homes has gone down and costs have gone up. That ends on my watch,” Biden said.

Those comments dovetail with growing interest from Congress.

The , for instance, is investigating the ownership of nursing homes, including by private equity firms, and expects to issue a report in the fall, said , the GAO’s managing director of public affairs. “The full scope of what we will cover has not been set yet, however the work will likely be focused on the information [the Centers for Medicare & Medicaid Services] has about nursing home ownership and how the agency uses that information,” Young wrote in an email.

The investigation comes in response to a pre-pandemic request from House Ways and Means Committee Chairman (D-Mass.). Yet the pandemic has also underscored the importance of oversight of nursing homes, in light of the to covid-19.

(D-N.J.) submitted to the GAO in 2021 regarding private equity investments in health care. It’s in GAO’s queue, but work on it hasn’t started, Young said.

The exponential growth in these private equity investments in recent years “has been associated with a host of trends that are negatively impacting the American people” — including an increase in nursing home mortality rates, wrote Pascrell, who chairs the Ways and Means Oversight Subcommittee. He noted the need to “better understand” the consequences of private equity’s involvement in health care and “the far-reaching impact” of “bankruptcies or closures following PE buyouts.”

Pascrell said in a statement to KHN that the data the GAO could compile would be valuable in assessing the reach and impact of such investments: “It is my hope GAO will shed more light and provide more information on Wall Street’s dangerous growing control over nursing homes and long-term care facilities.”

That Neal and Pascrell had to ask the GAO for information underscores the dearth of data on nursing home ownership. A June 2021 found that information about the effect of private equity ownership on nursing home finances and quality of care was dated and the results of studies were mixed.

Democratic House staffers told KHN that because private equity has stepped up its interest in this industry, it’s even more crucial to understand how residents’ health outcomes and staff working conditions compare with those in facilities not owned by private equity companies.

From 2010 to 2019, there was in private equity companies buying up nursing homes, along with other investments in health care. An exact figure is elusive because private purchases are difficult to track, but it’s estimated that such groups own anywhere from 5% to 11% of nursing homes nationwide.

A growing body of research shows that health outcomes in private equity-owned facilities are worse than in those under other ownership. A from the National Bureau of Economic Research found that going to a facility owned by a private equity firm increased the chance that a resident would die by 10%, compared with living in another type of facility. That study was conducted from 2005 to 2017.

A found that residents of private equity-owned nursing homes were more likely to have emergency room visits or be hospitalized than residents of other for-profit homes. Both studies found that Medicare’s costs per resident were higher, meaning more taxpayer dollars were being spent in private equity facilities.

Industry trade associations dismissed these findings, saying the studies don’t show the whole picture of how care at private equity-owned homes might differ from that at other facilities.

“The focus on private equity ownership of nursing homes is a red herring,” said Mark Parkinson, president and CEO of the industry group the . In his statement, he added that these investor groups have moved on to other, “more lucrative” health care sectors. that private equity is increasing investments in home health care and hospices, as more older Americans choose to age in place.

“If policymakers want to talk about private equity, then this is a conversation for the entire health care system, not just nursing homes,” Parkinson said.

The , an advocacy group for the private equity industry, countered these research findings with other studies. One showed that private equity-owned nursing homes , and another found that living in private equity-backed homes (though this study used old data and had a limited sample size).

Still, it’s undisputed that private equity firms are buying nursing homes because they’re likely to be profitable, said , an assistant professor of population health sciences at Cornell University who was an author of the November 2021 study.

“The main appealing thing is the margins are low and they’re getting valuable real estate with the purchase,” Braun said. “Plus, the way these deals are structured, it allows you to bring in parties that private equity firms might own, such as maid services [and] clinician services,” and charge higher rates than the market indicates.

Profits can also be maximized by reducing staff levels or hours, affecting residents’ care, said , research and campaign manager for the , a private equity watchdog group.

The Biden administration is trying to improve nursing home quality — for example, by directing Medicare to set higher standards for the facilities and instructing the Department of Health and Human Services . But some initiatives will require the assistance of Congress, which so far has been slow to move on oversight. Efforts have remained in the data-gathering phase.

The last about private equity ownership of nursing homes, released in 2011 — more than 10 years ago — found some differences in care and financial performance between for-profit facilities and those with nonprofit ownership. Meanwhile, the National Academies of Sciences, Engineering, and Medicine has released a much-publicized calling for more data transparency on nursing home performance and finances to understand how ownership affects care, among other recommendations for improving the nursing home system overall.

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The report on patient access to behavioral health care during the covid-19 crisis also casts doubt on whether insurers are abiding by federal law requiring parity in insurance coverage, which forbids health plans from passing along more of the bill for mental health care to patients than they would for medical or surgical care.

The are “the tip of the iceberg” in how Americans with mental, emotional and substance use disorders are treated differently than those with physical conditions, said JoAnn Volk, a research professor at Georgetown University’s Center on Health Insurance Reforms who studies mental health coverage.

The GAO report, shared before publication exclusively with KHN, paints a picture of an already strained behavioral health system struggling after the pandemic struck to meet the treatment needs of millions of Americans with conditions like alcohol use disorder and post-traumatic stress disorder.

Up to 4 in 10 adults on average reported anxiety or depression symptoms during the pandemic, the report showed, compared with about 1 in 10 adults in early 2019.

During the first seven months of the pandemic, there were 36% more emergency room visits for drug overdoses, and 26% more visits for suicide attempts, compared with the same period in 2019.

As the need grew, already spotty access to treatment dwindled, the GAO found: A survey of members of the National Council for Behavioral Health, an organization that represents treatment providers, showed 27% reported they laid off employees during the pandemic; 35% reduced hours; and 45% said they closed programs.

Worker shortages have long been an obstacle to accessing behavioral health services, which experts attribute in large part to problems with how providers are paid. Last fall the federal government estimated that more than one-third of Americans live in an area without enough providers available.

Provider groups interviewed by GAO investigators acknowledged staff shortages and some delays in getting patients into treatment. They noted that the pandemic forced them to cut outpatient services and limit inpatient options. They also told the researchers that payment issues are a significant problem that predated the pandemic. In particular, the GAO said, most groups cited problems getting reimbursed by Medicaid more often than any other payer.

Sen. Ron Wyden (D-Ore.), who chairs the Senate Finance Committee, requested the report from GAO after hearing complaints that constituents’ insurance claims for behavioral health care were being denied.

In an interview, Wyden said he plans to embark on a “long-running project” as chairman to make care “easier to find, more affordable, with fewer people falling between the cracks.”

Spurred by how the pandemic has intensified the system’s existing problems, Wyden identified four “essential” targets for lawmakers: denied claims and other billing issues; the workforce shortage; racial inequality; and the effectiveness of existing federal law requiring coverage parity.

For Wyden, the issue is personal: The senator’s late brother had schizophrenia. “Part of this is making sure that vulnerable Americans know that somebody is on their side,” he said.

State and federal officials rely heavily on people’s complaints about delayed or denied insurance claims to alert them to potential violations of federal law. The report cited state officials who said they “routinely” uncover violations, yet they lack the data to understand how widespread the problems may be.

Congress passed legislation in December that requires that health plans provide government officials with internal analyses of their coverage for mental and physical health services upon request.

Part of the problem is that people often do not complain when their insurer refuses to pay for treatment, said Volk, who has been working with state officials on the issue. She advised that anyone who is denied a claim for behavioral care should appeal it to their insurer and report it to their state’s insurance or labor department.

Another obstacle: Shame and fear are often associated with being treated for a mental health disorder, as well as a belief among some patients that inequitable treatment is just the way the system works. “Something goes wrong, and they just expect that’s the way it’s supposed to be,” Volk said.

The GAO report noted other ways the pandemic limited access to care, including how public health guidelines encouraging physical distancing had forced some treatment facilities to cut the number of beds available.

On a positive note, the GAO also reported widespread approval for telehealth among stakeholders like state officials, providers and insurers, who told government investigators that the increased payments and use of virtual appointments had made it easier for patients to access care.

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A rescue squad carried him out of the woods, and a helicopter flew him to a pediatric hospital trauma unit in Roanoke.

Most of Christian’s care was covered by his parents’ insurance. But one bill stood out. Med-Trans, the air ambulance company, was not part of the family’s health plan network and billed $36,000 for the 34-mile trip from the mountain to the hospital. It was greater than the cost of his two-day hospitalization, scans and cast combined.

“When you’re in that moment, you’re only thinking about the life of your child,” said Christian’s mother, Cynthia Bolling, an occupational therapist. “I know that I am being taken advantage of. It’s just wrong.”

The rising number of complaints about surprise medical bills is spurring efforts on Capitol Hill and at the White House to help consumers. Over and over again, the high cost associated with air ambulance service gives patients the biggest sticker shock — the subject has come up at nearly every Capitol Hill hearing and press conference on surprise medical bills.

Yet air ambulance costs are not addressed in any of the proposals introduced or circulating in Congress. Even a congressional decision last year to set up a panel that would study air ambulance billing hasn’t gotten off the ground.

“We’re doing a disservice to patients if we protect them from hospital bills but bankrupt them on the way there,” said James Gelfand, senior vice president for health policy for the ERISA Industry Committee, known as ERIC, a trade association for large employers.

The issue came up again Wednesday at a House Energy and Commerce subcommittee hearing where Rick Sherlock, president and CEO of the Association of Air Medical Services, the industry group for air ambulances, was among eight witnesses.

Rep. Ben Ray Luján (D-N.M.) sharply questioned Sherlock why costs for air ambulance services have risen by 300 percent in his state since 2006.

“I’m trying to get my hands around why this is costing so much and why so many of my constituents are being hit by surprise bills,” Luján said.

Sherlock said that reimbursements from Medicare and Medicaid do not cover the cost of providing services, so charges to private patients must make up that difference.

Air ambulances serve more than 550,000 patients a year, according to industry data, and in many rural areas air ambulances are the only speedy way to get patients to trauma centers and burn units. As more than 100 rural hospitals have closed around the country since 2010, the need has increased for air services.

More than 80 million people can get to a Level 1 or 2 trauma center within an hour only if they’re flown by helicopter, according to Sherlock.

The service, though, comes at a cost. According to a from the Government Accountability Office, two-thirds of the more than 34,000 air ambulance transports examined were not in the patients’ insurance networks. That can leave patients on the hook for the charges their insurers don’t cover, a practice known as “balance billing.”

In 2017, GAO found that the median price charged nationally by air ambulance providers was around $36,400 for helicopter rides and even higher for other aircraft. The total generally includes the costs for both the transportation and the medical care aboard the aircraft.

Additionally, the ongoing “Bill of the Month” investigative series by Kaiser Health News and NPR has received more than a dozen such bills, ranging from $28,000 to $97,000.

Cynthia Bolling said her insurance company paid about a third of Christian’s air ambulance bill and the family settled this week with Med Trans by agreeing to pay $4,400 out-of-pocket.

Reid Vogel, director of marketing and communications for Med Trans, said the company cannot talk about a private patient because of privacy rules. But he added that the company works with patients to find “equitable solutions” when their bills are not covered by insurance.

Since nearly three-quarters of flights are for patients insured by low-paying Medicare, Tricare and Medicaid, he said, “providers must shift costs to insured patients.”

Private insurers usually will pay only an amount close to what Medicare reimburses, which is around $6,500. That gives air ambulance companies an incentive to remain out-of-network, according to a .

“A representative from a large independent provider noted that being out of network with insurance is advantageous to the provider because a patient receiving a balance bill will ask for a higher payment from the insurance company, which often results in higher payment to the air ambulance provider than having a pre-negotiated payment rate with the insurer,” the GAO said.

In an interview, Sherlock, of the trade association, disputed the report’s findings, saying his members are actively trying to be in-network in more places, although he couldn’t provide any specific numbers.

“I think that everywhere they can, they’re incentivized to be in-network,” he said.

States are hampered in their efforts to ease the strain for residents.

The Airline Deregulation Act of 1978, which was intended to encourage more competition, forbids states to regulate prices for any air carrier, which applies to air ambulances. What’s more, many large employers’ health insurance is not governed by states but regulated by the federal labor law, known as ERISA.

So a remedy likely has to come from Congress. And it’s proven to be a heavy lift.

For example, the committees that deal with regulation of the air industry — the Commerce Committee in the Senate and the Transportation Committee in the House — don’t make health policy or regulate health insurance.

Last year, some lawmakers sought to let states regulate air ambulances with a provision in the bill reauthorizing the Federal Aviation Administration.

But that measure was ultimately eliminated. Instead, the bill called for the creation of an to study air ambulance prices and surprise bills.

“The air ambulance lobby did a very good job playing defense during FAA authorization,” said ERIC’s Gelfand.

The panel, which was supposed to be formed within of the law’s enactment date — Oct. 5 — still has not been created.

Representatives from the air ambulance industry don’t think congressional action is necessary, although they are calling for higher reimbursements from Medicare.

Chris Eastlee, vice president for government relations for the Association of Air Medical Services, said his group does not favor more congressional regulation of prices but would mandatory disclosure of costs to the secretary of Health and Human Services. The organization argues that greater transparency will help companies negotiate more in-network contracts.

A fix for surprise bills supported by some researchers and advocates would require every provider within a medical facility to accept any insurance plan that contracts with that hospital. It might also help bring down air ambulance bills, said Loren Adler, associate director of USC-Brookings Schaeffer Initiative for Health Policy.

It would avoid the situation where someone picks an in-network hospital only to find out that a surgeon or anesthesiologist at that hospital doesn’t take their insurance. Air transport should also be included in the rule, he said.

“It’s the exact same situation as with the out-of-network emergency facility rates,” Adler said. “The same solutions should apply.”

Gelfand suggested also that the House Ways and Means Committee mandate that air ambulance companies seeking to participate in Medicare must charge in-network rates.

That would require only a small tweak of the legislative language, as he sees it. “Every proposal that includes something to address surprise bills for emergency care, all you have to do is add in the words ‘air ambulances,’” Gelfand said.

Right now, the closest any surprise billing proposal has come to addressing air ambulances is a draft legislative plan on medical costs from Sen. Lamar Alexander (R-Tenn.) and Sen. Patty Murray (D-Wash.). They would require bills for air ambulance trips to be itemized to show both medical charges and the transportation charges so patients and health plans can understand them better.

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The Government Accountability Office, which spent more than a year investigating the FDA’s orphan drug program, said “challenges continue” in the program that was created to spur development of drugs for diseases afflicting fewer than 200,000 patients.

The investigation began after a request from three high-profile Republican senators last year, in the wake of a KHN investigation. KHN found that the program was being manipulated by drugmakers to maximize profits and to protect niche markets for medicines being taken by millions.

The GAO uncovered inconsistent and often incomplete reviews early in the process of designating medicines as orphan drugs and recommended “executive action” to fix the system. In some cases, FDA reviewers failed to show they had checked how many patients could be treated by a drug being considered for orphan drug status; instead, they appeared to trust what drugmakers told them.

In response to GAO’s probe, the FDA issued a statement saying it agreed with the report recommendations regarding documentation and that the agency is “streamlining our processes.” The agency declined requests for interviews. In a comment included with the report, Matthew Bassett, assistant secretary for legislation at the Department of Health and Human Services, said HHS agreed with GAO’s recommendations.

John Dicken, director of the GAO’s health care team, said the focus of the report is “ensuring that the intent of the law is being met.”

The FDA’s rare-disease program began after Congress overwhelmingly passed the 1983 Orphan Drug Act to motivate pharmaceutical companies to develop drugs for people who lacked treatments for their conditions. Rare diseases had been ignored by drugmakers because treatments for them weren’t expected to be profitable. The law provides fee waivers, tax incentives for research and seven years of marketing exclusivity for any drug the FDA approves as an “orphan.”

The incentives, though, have proven to be more powerful and highly coveted than expected, said Avik Roy, president of the Foundation for Research on Equal Opportunity, a conservative think tank.

Many people are “starting to wonder whether or not the Orphan Drug Act over-corrected for the problem,” Roy said, noting that spending in the U.S. will be on so-called rare-disease medicines in 2020.

GAO analysts examined FDA records for 148 applications submitted by drugmakers for orphan drug approval in late 2017. FDA’s reviewers are supposed to apply two specific criteria — how many patients would be served and whether there is scientific evidence the drug will treat their disease.

In nearly 60 percent of the cases, the FDA reviewers did not capture regulatory history information, including “adverse actions” from other regulatory agencies. The FDA uses experienced reviewers, Dicken noted, who may already know the history of certain submitted drugs and not see the need to document it.

And 15 percent of the time FDA reviewers failed to independently verify patient estimates provided by the drugmaker.

Of the 148 records the GAO reviewed, 26 applications from manufacturers were granted orphan status even though the initial FDA staff review was missing information.

“It is tempting to think that perhaps those approvals were sort of granted routinely without sufficient scrutiny,” said Bernard Munos, senior fellow at FasterCures and the Milken Institute.

By contrast, early Orphan Drug Act advocate Abbey Meyers said she was not concerned about the lack of population estimates because many rare diseases lack population studies that show how common a disease is.

Rather, Meyers said, she’s “disappointed that there is no government-funded agency that is willing to finance” such research.

The GAO investigation began after Scott Gottlieb, who took over as FDA commissioner in May 2017, announced a “modernization” of the rare-disease program.

Critics have long complained that drugmakers game the FDA’s approval process for orphan drugs. In January 2017, the KHN investigation, which was co-, revealed that many orphan drugs aren’t entirely new and don’t always start as treatments for rare diseases.

The GAO report, while not analyzing the same years, found that 38.5 percent of orphan drug approvals from 2008 to 2017 were for drugs that had been previously approved either for mass-market or rare-disease use. About 71 percent of the drugs given orphan status were intended to treat diseases affecting fewer than 100,000 people.

KHN’s investigation found that popular mass-market drugs such as cholesterol blockbuster Crestor, Abilify for psychiatric conditions, cancer drug Herceptin and rheumatoid arthritis drug Humira, the best-selling medicine in the world, all won orphan approval yet were already on the market to treat common conditions.

In addition, more than 80 orphan drugs won FDA approval for more than one rare disease — or several — each one with its own bundle of rich incentives.

Genentech’s Avastin, a cancer treatment approved for mass-market use in 2004, won three more orphan-designated for the treatment of three rare forms of cancer. It now has 11 approved orphan uses in all, and exclusive protections that keep generics at bay won’t run out until 2025.

Sens. Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa) and Tom Cotton (R-Ark.) sent a letter in March 2017 asking the GAO to investigate the program and find out whether Congress’ original intent for it was still being followed.

“Despite the success of the Orphan Drug Act, 95 percent of rare diseases still have no treatment options,” Hatch said in a statement Friday. “I hope that my colleagues will utilize this [GAO] report as they work to strengthen the accomplishments of the Orphan Drug Act and encourage developers to continue their investment in this patient population.” The GAO report also mentioned concerns about prices, noting that “the ability to command high prices” was one reason the rare-disease market was growing so rapidly.

The average cost per patient for an orphan drug was $147,308 in 2017 compared with $30,708 for a mass-market drug, according to a on the 100 top-selling drugs in the United States. Celgene’s chemotherapy drug Revlimid was the top-selling orphan with $5.4 billion in sales and $184,011 in revenue per patient.

“We have accepted culturally that it’s OK for a company to charge high prices for [orphan] drugs,” said Roy. “The end result is that a lot of these orphan drugs are $10 billion drugs, even though they are for rare diseases.”

From 2008 to 2017, more than half of the drugs granted orphan status were for cancer or blood disorders, according to the GAO report. And nearly two-thirds of drugs approved in the program were given expedited review processes, such as accelerated approval or fast-track designation.

Prior to announcing Gottlieb’s modernization plan, the FDA had a backlog of 138 drug applications for orphan status that had been waiting more than 120 days. The backlog was cleared in August 2017 after staff from across the agency stepped in to help.

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Stacks and stacks of it.

Stuck with decades-old technology, the nation’s largest Medicaid program forces federal officials to sift through thousands of documents by hand rather than sending electronic files. That’s one of the critical findings in a from the federal government’s chief watchdog citing inefficient and lax oversight of Medicaid nationwide.

To illustrate, the U.S. Government Accountability Office published a photo showing piles of records submitted for one three-month period. One folder was placed upright to show the height of the heap.

“It’s really amazing when you look at that picture,” said Carolyn Yocom, a health care director at the GAO who focuses on Medicaid, the federal-state health insurance program for low-income people. “For this type of reporting on expenditures, California really should be able to provide that electronically.”

California, with more than 13 million Medicaid enrollees, said it’s hamstrung because it uses 92 separate computer systems to run its Medicaid program — although it has plans underway to modernize its technology.

“Given system limitations and the magnitude of the supporting documentation, providing it electronically is currently not feasible,” the California Department of Health Care Services said in a statement.

The state’s Medicaid program, known as Medi-Cal, has struggled with technology for years. The state thought it had a solution in 2010 when it awarded a $1.7 billion contract to Xerox, which included $168 million for a new system. But after years of delay, the state scrapped the contract in 2016 and started from scratch, leaving the patchwork system in place a few more years.

Nationwide, despite industry buzz about electronic medical records, smartphone apps and artificial intelligence, a lot of paper is still being pushed across the health care system. Consider all those forms patients repeatedly fill out in the waiting room, the screeching sound of fax machines inside doctors’ offices and the bulging binders of patients’ records in file rooms.

Under Medicaid, states submit data quarterly to the federal government on their spending and include supporting documents such as invoices, cost reports and eligibility records. In California, reports on spending are shared electronically, but the copious supporting documentation required for federal review is not, according to the GAO.

When the Xerox venture failed, the company agreed to pay California more than $123 million as part of a settlement agreement, according to state officials.

Meantime, Conduent, the services unit of Xerox that was spun off into a separate company, was left to keep operating the system and process claims.

Last month, the state  to DXC Technology of Tysons, Va., to take over some operations from Conduent. The state said the contract could be worth $698 million over 10 years.

Separately, California’s Medicaid officials are working on plans for a new system that would cost an estimated $500 million. Under the federal-state partnership on Medicaid, the federal government would cover 90 percent of those costs for design and implementation, and the state’s share would be about $50 million.

Pressure has been mounting on California to fix the situation. The Medicaid IT system “needs to be replaced, because it is more than 40 years old, its operations are inefficient, maintaining the system is difficult and there is a high risk of system failure,” state auditor Elaine Howle wrote in to Gov. Jerry Brown and legislative leaders.

In her letter, Howle said the state was paying about $30 million annually to maintain the legacy system.

Overall, Medi-Cal serves 1 in 3 Californians. The annual Medicaid budget in California is about $104 billion, counting federal and state funds.

Beyond California, the GAO criticized the U.S. Centers for Medicare & Medicaid Services (CMS) more broadly. One complaint: Federal officials assign a similar number of staff to states for reviewing case files — even though some states, like California, pose a far bigger risk for enrollment errors and misspent money due to their size and complexity.

For instance, the report’s authors said, CMS reviewed claims for the same number of newly eligible Medicaid enrollees — 30 — in California as it did in Arkansas, even though California had 10 times the number of newly enrolled patients under the Affordable Care Act.

The report also said CMS devoted a similar number of staff to review both California, which represents 15 percent of federal Medicaid spending, and Arkansas, which accounts for 1 percent.

CMS “needs to step back and assess where are the biggest threats and vulnerabilities,” Yocom said. “If you aren’t looking, you don’t know what you aren’t catching.”

Overall, from fiscal years 2014 to 2018, federal Medicaid spending increased by about 31 percent, according to the GAO report. But the full-time staff at CMS dedicated to financial oversight declined by roughly 19 percent over the same period.

In a July 18 letter to the GAO, the U.S. Department of Health and Human Services agreed with the agency’s recommendations for improving oversight efforts.

HHS wrote that it “will complete a comprehensive national review to assess the risk of Medicaid expenditures reported by states and allocate resources based on risk.”

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A released Thursday found some states don’t complete evaluation reports for up to seven years after an experiment begins and often fail to answer vital questions to determine effectiveness. The GAO also slammed the federal Centers for Medicare & Medicaid Services for failing to make results from Medicaid evaluation reports public in a timely manner.

“CMS is missing an opportunity to inform federal and state policy discussions,” the GAO report said.

Joan Alker, executive director of the Georgetown University Center for Children and Families, called the report’s findings “troubling but not surprising.”

“It has been clear for some time that evaluations of Section 1115 waivers are not adequate,” she said. “There is some good work going on in this space at the state level, for example in Michigan and Iowa, but as the report makes clear state’s evaluations are often incomplete and not rigorous enough.”

These experiments are often called “demonstration projects” or “1115 demonstration waivers” — based on the section of the law that allows the federal government to authorize them. They allow federal officials to approve states’ requests to test new approaches to providing coverage. They are used for a wide variety of purposes, including efforts to extend Medicaid to people or services not generally covered or to change payment systems to improve care.

Medicaid demonstration programs often run for a decade or more. Several states that expanded Medicaid eligibility under the Affordable Care Act did so through a demonstration program, including Indiana, Iowa, Arkansas and New Hampshire.

Nearly three-quarters of states have Medicaid demonstration programs, such as those testing providing services through private managed-care firms and requiring enrollees to pay monthly premiums. About a third of the federal government’s $300 billion a year in Medicaid spending goes to these test programs, the GAO said.

The study, requested by top GOP lawmakers including Sen. Orrin Hatch (R-Utah), reviewed demonstration programs in eight states — Arizona, Arkansas, California, Indiana, Kansas, Maryland, Massachusetts and New York.

In five of these states, money from their Medicaid demonstration program makes up more than half their total federal Medicaid budgets. Nearly all of Arizona’s funding — 99.7 percent — is through a demonstration program.

The use of Medicaid demonstration programs accelerated during the 1990s. But in recent years the experiments have often reflected the political leanings of state officials or the party controlling the White House. Under a demonstration program, the Trump administration this year approved requests from Indiana and Kentucky to enact work requirements for some adult Medicaid enrollees.

The GAO report noted that states often do not complete their evaluation reports until after the federal government renews their demonstration program. For example, Indiana’s Medicaid expansion demonstration program, which charges premiums and locks some enrollees out of coverage for lack of payment, was renewed in February even though a final evaluation report is not yet complete.

GAO said Indiana’s evaluation of its Medicaid expansion won’t look at the effect of the state’s provision that locks out enrollees for six months if they fail to pay premiums.

“GAO found that selected states’ evaluations of these demonstrations often had significant limitations that affected their usefulness in informing policy decisions,” the report said.

Alker said that “more sunshine and data are needed” to assess waivers, “especially as they are clearly the vehicle the Trump administration is now using to pursue its ideological objectives for Medicaid.”

(Story continues below.)

While states typically contract with independent groups to evaluate Medicaid demonstration programs, the federal government sometimes does its own review.

But the GAO investigators found Indiana’s Medicaid agency wasn’t willing to work with the federal contractor out of privacy concerns. That halted efforts for a federal review.

Joel Cantor, director of the Center for State Health Policy at Rutgers University in New Brunswick, N.J., said the demonstration programs have often shifted from their intended purpose because they are designed by lawmakers pushing an agenda rather than as a scientific experiment to find better ways to deliver care.

“Demonstration programs have been used since the 1990s to advance policy agenda for whoever holds power in Washington and not designed to test an innovative idea,” he said.

The evaluations often take several years to complete, he said, because of the difficulty of getting patient data from states. His center has done evaluations for New Jersey’s Medicaid program.

GAO recommended that CMS require states to submit a final evaluation report after the end of the waiver period, regardless of whether the experiment is being renewed, and that the federal agency publicly release findings from federal evaluations in a timely manner. Federal officials said they agreed with the recommendations.

Matt Salo, executive director of the National Association of Medicaid Directors, said the report highlighted a need to modernize the law dealing with Medicaid so that successful experiments are quickly incorporated into the overall program.

“The underlying problem is that the Medicaid statute has fundamentally failed to keep up with the changing reality of health care in the 21st century,” he said. “There’s no way to update the rules to make these changes” a permanent part of the program.

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“Some of us actually went to war, some of us had war right here in the States, going to work every day knowing we are going to be harassed,” said Procella, now 62 and living in Plano, Texas.

At the time, fewer than 3 percent of service members were women. Procella recalled the daily barrage of sexual comments, gestures and men grabbing her inappropriately. And one of her superiors made it clear that her hopes of moving up the career ladder were dependent on having sex with him.

“He was kind of discreet about the way he put it, but his one advance and my one acceptance of his advance led to my promotion,” Procella said.

At the time, Procella, who served in the Air Force until 1979 and then went on to the Texas Air National Guard until 1982, accepted the common belief that reporting the incidents would be bad for her career. “It definitely wasn’t talked about, you definitely did not report your superiors for any kind of harassment,” she explained. “At the time that it happens you sweep it away like you’re going to be OK.”

A majority of those who reported sexual abuse met the criteria for a PTSD diagnosis, the researchers said.

And a in the journal Women’s Health Issues found that women ages 45-54 reported more sexual harassment and assault while in the military than other age groups.

“I was struck by the idea that it wasn’t just younger women,” said Carolyn Gibson, a women’s health research fellow at the San Francisco VA Medical Center and co-author of that study.

The research also found that the association between sexual trauma and its negative effects on health — such as cardiovascular disease, substance abuse and other physical and mental illnesses — was most pronounced among female veterans ages 45-64.

Gibson said these effects may be exacerbated among women in midlife because there was less awareness around the issue when they were in uniform and they felt compelled to bear the stress alone.

Midlife is also a time of great change for women, Gibson explained, both physically and emotionally, which could lead them to come forward about sexual trauma after their service ended.

“As people go through periods of transition, then those symptoms tend to pick up a lot more,” she said. More of the veterans who are younger now, she added, may go public about their struggles with sexual trauma when they enter this phase of life 10 to 15 years down the road.

Battle For Recognition

The Veterans Health Administration coined the term “military sexual trauma” in 2004, and today about 25 percent of women and 1.5 percent of men who use VA health services have the diagnosis, according to the VA. The symptoms are closely associated with PTSD and put individuals at an increased risk for other mental health conditions, including anxiety, depression and eating disorders.

But getting a disability claim based on military sexual trauma can be a long and complicated battle. A 2014  found that disability claims related to sexual trauma during military service used to be far less likely to be approved than PTSD claims from other sources. In 2010, 46 percent of all claims related to non-sexual trauma were approved by the Veterans Benefits Administration, while 28 percent of those related to military sexual trauma were, GAO said. By 2013, half of the sexual abuse claims and 55 percent of PTSD claims were approved.

The GAO and veterans groups say the increase came after the VA mandated training on military sexual trauma for employees processing claims at regional centers and for health professionals providing the veterans’ evaluations.

The VA has added resources specifically for women in recent years, even separate entrances for women at some counseling facilities. Still, it’s a challenge to get women through the door to receive help. According to a 2015 VA report on barriers to women’s health care, only 19 percent of female veterans used VA services.

“During the Vietnam era, a lot of veterans who came back had a hard time getting into the VA, especially women — they were put off by the VA for several years,” said Pam Maercklein, who coordinates women’s health care for the Texas Veterans Commission and is an Air Force veteran. “Now the VA, especially here in Texas, is doing a fairly good job of gender-specific treatment.”

Anna Baker, the manager of the commission’s women’s program, said women who are now middle-aged were forgotten when it came to treatment for sexual trauma at the time of their service and afterward.

“We’ve had several nurses who served in Vietnam who are just now coming out, who are saying that for so many years they just suppressed it,” Baker said, “and they’re just now starting to have those conversations and deal with those issues that are causing them anguish.”

While there’s a tendency to associate PTSD with military combat, a published in JAMA Psychiatry found that women who served in Vietnam had increased odds of PTSD. The effect, the report found, “appears to be associated with wartime exposures, especially sexual discrimination or harassment and job performance pressures.”

Delia Esparza, a psychiatric mental health nurse with the Vet Center in Austin, Texas, has been helping veterans — women and men — deal with sexual trauma for more than 22 years.

The Austin Vet Center is one of 300 community facilities across the country that provide veterans (and family members) with free individual and group counseling, in addition to other readjustment services.

Esparza said that even with increased attention to military sexual trauma, many of the problems that Procella and other veterans experienced persist. Among them: Women especially feel stigmatized for speaking out.

She recalled that when she first started practicing she had a female client who was a veteran from World War II.

“She was very troubled by this whole thing,” Esparza said of the veteran, who was then in her 70s, “and when she talked about it she became very tearful.

“It stays with you.”

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The Government Accountability Office still must determine the full scope of what it will look into and the methodology to be used. Determining the scope will take some months, said Chuck Young, GAO’s managing director for public affairs.

Earlier this month, Sens. Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa) and Tom Cotton (R-Ark.) sent a letter to the GAO and raised the possibility that regulatory or legislative changes might be needed “to preserve the intent of this vital law” that gives drugmakers lucrative incentives to develop drugs for rare diseases.

Grassley’s office said Tuesday they expected the GAO to begin its work in about nine months. The delay is typical as the agency has a queue of requests it is pursuing.

The senators have asked the GAO to “investigate whether the ODA is still incentivizing product development for diseases with fewer than 200,000 affected individuals, as intended.”

Congress overwhelmingly passed the 1983 Orphan Drug Act to motivate pharmaceutical companies to develop drugs for people whose rare diseases had been ignored. Drugs approved as orphans are granted tax incentives and seven years of exclusive rights to market drugs that are needed by fewer than 200,000 patients in the U.S.

In recent months, reports of five- and six-figure annual price tags for orphan drugs have amplified long-simmering concerns about abuse of the law. The senators’ call for a GAO investigation reflects that sentiment.

“While few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process,” the letter states.

In January, Kaiser Health News published an  that found the orphan drug program is being manipulated by drugmakers to maximize profits and to protect niche markets for medicines being taken by millions.

That investigation, which also was  by NPR, found that many drugs that now have orphan status aren’t entirely new. More than 70 were drugs first approved by the Food and Drug Administration for mass-market use. Those include cholesterol blockbuster Crestor, Abilify for psychiatric disorders and the rheumatoid arthritis drug Humira, the world’s best-selling drug.

Others are drugs that have received multiple exclusivity periods for two or more rare conditions.

The senators asked the GAO for a list of drugs approved or denied orphan status by the FDA. It also asked if resources at the FDA, which oversees the law, have “kept up with the number of requests” from drugmakers and whether there is consistency in the department’s reviews.

And they said it would be important to include patient experiences in the GAO review. The GAO does not provide updates on ongoing work but rather reports its findings once they complete an assignment.

The rare-disease drugs have become increasingly popular with pharmaceutical and biotech companies and are expected to comprise 21.4 percent of worldwide prescription sales by 2022, not including generics, according to consulting firm EvaluatePharma’s 2017 orphan drug .

That’s in part because of the exorbitant prices that can be charged. Of the top 100 drugs in the U.S., the average cost per patient per year for an orphan drug was $140,443 in 2016, compared with $27,756 for a non-orphan, EvaluatePharma said.

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In a March 3 letter to the U.S. Government Accountability Office, Sens. Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa) and Tom Cotton (R-Ark.) raised the possibility that regulatory or legislative changes might be needed “to preserve the intent of this vital law” that gives drugmakers lucrative incentives to develop drugs for rare diseases.

“While few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process,” the letter states.

In January, Kaiser Health News  that found the orphan drug program is being manipulated by drugmakers to maximize profits and to protect niche markets for medicines being taken by millions.

Others are drugs that have received multiple exclusivity periods for two or more rare conditions. About 80 drugs fall into this latter category, including cancer drug Gleevec and wrinkle-fighting drug Botox.

Few senators are better positioned to alter the law, if they want to. Hatch, a longtime advocate of the rare disease community, said late Monday in a statement that there was little evidence to suggest the Orphan Drug Act needs to change.

Hatch is chairman of the Senate Finance Committee, which oversees 50 percent of the federal budget, including Medicaid and Medicare spending. He said the letter is requesting “the first GAO study exclusively reviewing the Orphan Drug Act, and such oversight will ensure those critical innovations are continued into the future.”

Grassley, the senior senator from Iowa, chairs the Judiciary Committee and has jurisdiction over anti-competitive and patent-related issues. Grassley last month announced an into the Orphan Drug Act in response to KHN’s investigation.

Cotton, a strong conservative voice, chairs the subcommittee on economic policy under the committee on banking, housing and urban affairs. In a floor speech last month, he announced that he would find a legislative solution to price hikes associated with the orphan drug program.

Cotton focused on an orphan drug that has been a flashpoint in the recent national dialogue about drug prices, arguing that the seven-year marketing exclusivity offered by the law should not have been given to Emflaza, a corticosteroid approved to treat Duchenne muscular dystrophy. Emflaza was not mentioned in the letter to the GAO.

“Monopoly rights are not merit badges,” Cotton said . “They’re not a reward for business smarts. They’re supposed to serve the interests of patients.”

Drugmaker Marathon Pharmaceuticals triggered an uproar when it announced an $89,000 annual list price for the drug, which many U.S. patients have purchased overseas for $1,000 to $1,600 a year.

Marathon responded in February by delaying the rollout of the drug, saying it will talk with stakeholders, including patients, about the price.

Last Friday, seven Democratic senators — including Sen. Elizabeth Warren of Massachusetts — and one independent sent a letter to Marathon CEO Jeff Aronin demanding information on the private drugmaker’s pricing strategy.

Marathon spokeswoman Wanda Moebius released a statement saying the company is committed to ensuring that all patients who need this drug have access to it and will continue to work with the Duchenne community.

The three top senators asking the GAO to investigate the orphan drug program also expressed concern about patients, saying in their letter that “we feel it is important to include the patient voice in your review.”

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