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POLITICO New York Health Care: Risk corridor payments fall short; scarce details of Utica's new hospital

Dear readers: POLITICO New York Pro subscribers receive this email at 5:30 a.m. each weekday. If you'd like to receive it at that time, along with a customized real-time news feed of New York health care policy news throughout the day, please contact us at and we'll set you up for trial access.

written by Josefa Velasquez and Dan Goldberg

A NEW HOSPITAL — Downtown Utica may see some significant changes to its infrastructure and economy in the coming years, after Mohawk Valley Health System announced plans last week to consolidate the area's two hospitals and build a state-of-the-art facility. But with the plan still in its infancy, details are scarce. As part of the 2015 state budget, Gov. Andrew Cuomo and the Legislature agreed to $300 million in funding for a hospital in Oneida County. The new facility in Utica is expected to take four to six years to complete and is expected to cost between $500 million and $600 million. But how the hospital will shore up the remaining funds not covered by the state is still up in the air. Assemblyman Anthony Brindisi and State Sen. Joe Griffo, who both represent Utica and helped secure the funding for the new hospital, said MVHS will have to bond for the funding, raise funds through contributions and apply for grants to make up the rest of the money.

UNDERWHELMING RISK CORRIDOR PAYMENTS — Insurance companies will be receiving a lot less money from the Affordable Care Act's risk corridor program than they had hoped, the federal government announced Thursday night. The risk corridor — a three-year program that redistributes money from insurance companies that had premiums exceed claims by more than a certain amount to insurers that had claims exceed premiums by a certain amount — will pay $362 million this year. Insurers had requested $2.87 billion.The shortfall could prove particularly harmful for struggling insurers that were relying on risk corridor payments to remain solvent. POLITICO New York’s Dan Goldberg has more: [PRO]

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BLOCKED — Federal and local law enforcement are finding that the state Health Department is hampering their investigations by failing to provide narcotics prescribing data, the Journal News reports. “That is the purpose of this data in the first place, so you’re able to find the pharmacist or the doctor who is prescribing, like candy, the thousands and thousands of pills that are putting people in the ground,” U.S. Attorney Preet Bharara told the paper. Undisclosed records on narcotics prescribing data contains information about patients, pharmacies and doctors that may lead investigators to spot trends or see if practitioners are engaging in wrongdoing.

NOW WE KNOW — Despite not having fluoride or electric toothbrushes, ancient Romans had better teeth than most people today because they consumed a low-sugar, fiber-rich diet.

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DE BLASIO’S NEW INITIATIVE — The de Blasio administration unveiled a multimillion dollar health care initiative to bolster access for some of New York City’s low-income and uninsured immigrant population. The Direct Access initiative isn’t an insurance program, per se, but its aim is to create a sort of universal health care program by paring patients with primary care doctors and medical homes already being paid for by city, state and federal funds. It’ll be a one-year pilot program beginning in 2016, the Wall Street Journal reports, with 1,000 — mostly undocumented — New Yorkers enrolling. Funding will come in the form of $6 million from the mayor’s office, private donations funnelled through the Mayor’s Fund to Advance New York City and $2.5 million from the City Council.

LEGIONNAIRE'S UPDATE — There have been no new cases of Legionnaire’s disease in the Morris Park area of the Bronx since Sept. 21, Dr. Mary Bassett, the city’s health commissioner, tweeted. She added that the reason the Bronx has had a disproportionately high share of Legionnaire’s is because of one infected cooling tower.

BACKLASH — 101 economists, both liberal and conservative, signed onto a letter supporting the Cadillac Tax, the 40-percent tax on high-cost health insurance plans. The letter comes days after Democratic presidential candidate Hillary Clinton said she supported repealing the tax, a move sure to curry favor with labor groups who don’t want to see their generous health plans taxed. Vermont Senator Bernie Sanders, who is running to Clinton’s left, also opposes the tax, and Republican candidates hate all things Obamacare. So, who supports this tax? Health economists because they believe the best way to bend the cost curve is to limit the kinds of health plans that divorce consumers from the cost of care. If people have higher co-pays and greater out-of-pocket costs, they’re likely to be more judicious. And that, in theory, lowers costs for everyone. Read the letter:

MORE FUNDING FOR HEROIN FIGHT — The state approved a second methadone program for Onondaga County, according to the state’s Office of Alcoholism and Substance Abuse Services. New methadone programs were also approved for Buffalo, Albany, Peekskill and Troy.

GRANT LAND — The Onondaga County Health Department will receive $250,000 per year for the next five years from the state's Creating Healthy Schools and Communities program. Howard Zucker, the state health commissioner, toured the HW Smith Elementary School in Syracuse on Wednesday to discuss ways to lower childhood obesity rates. Syracuse has a child obesity rate approaching 24 percent, according to the state, well above the state rate of 17.3 percent.

MAKING ROUNDS — Leonard Girardi has been named chair of the Department of Cardiothoracic Surgery at Weill Cornell Medical College and cardiothoracic surgeon-in-chief at NewYork-Presbyterian/Weill Cornell Medical Center. Girardi has worked at the medical college and New York-Presbyterian for nearly 30 years. He received a bachelor's degree from Harvard, a medical degree from Weill Cornell Medical College and completed residencies in general surgery and cardiothoracic surgery at New York-Presbyterian/Weill Cornell.

INSURANCE REPORT: EmblemHealth's board of directors has elected John Feerick its chairman, the company will announce Friday — one in a series of moves that is reshaping the financially struggling insurer. Feerick replaces Frank Branchini, who had worked at GHI for more than 30 years. Branchini had been CEO but gave up that position Sept. 1 when Karen Ignagni, former head of America's Health Insurance Plans, took over the company. The insurer reported $494 million in losses on about $7 billion in revenue and has accumulated losses across all lines of business. Last month, the insurer also announced a new chief clinical officer and two new senior-level hires charged with managing community affairs and government relations.

PHARMA REPORT: The Wall Street Journal reports: “The U.S. Food and Drug Administration approved the first therapy combining two cutting-edge cancer drugs that unleash the body’s immune system against tumors—a combination that will cost more than $250,000 per patient for the first full year, according to its manufacturer. Bristol-Myers Squibb Co. said Thursday the FDA approved the use of its drugs Yervoy and Opdivo for the treatment of advanced melanoma, a deadly form of skin cancer. Each immunotherapy previously was approved individually to treat melanoma; they work by different mechanisms to fight tumors.”


-SUPPORT SYSTEM — We’re one day into ICD-10, the new medical classification system causing anxiety for providers. Deputy Administrator Sean Cavanaugh of the Centers for Medicare and Medicaid Services said in a blog post that the ICD-10 Coordinator Center will be watching the transition in real time and addressing any problems or issues that may arise. “You may wonder when we’ll know how the transition is going. It will take a couple of weeks before we have the full picture of ICD-10 implementation because very few health care providers file claims on the same day a medical service is given. Most providers batch their claims and submit them every few days,” Cavanaugh wrote.

-OUT OF NETWORK COSTS — Billing for out-of-network providers far exceeded Medicare reimbursements for the same geographical location, according to a report released by America’s Health Insurance Plans, the national association that represents health insurance companies. The report found there was a wide variation for out-of-network charges for the same procedure.

TODAY'S TIP — Comes from the New York City Health and Hospitals Corporation reminding parents to never tell their children that medicine tastes like candy.


-MALE BIRTH CONTROL — Two drugs given to organ transplant patients to suppress their immune system may be the long-sought birth control pill for men, Japanese researchers at the Osaka University’s Research Institute for Microbial Diseases found. The drugs cyclosporine A and FK506 work by preventing the immune system from making the protein that would mobilize T-cells to attack new organs. The study, which was published in the journal Science, shows that the sperm of male mice that were given the drug were unable to fertilize female mice eggs. The male mice fertility returned one week after the drug was stopped.

-EARLY BIRD — There’s a correlation between sleep and body mass index, a study from the University of California, Berkeley, finds. Teenagers and adults who go to bed late on weeknights are more likely to gain weight than their peers who hit the sack early. Researchers found that for every hour of sleep lost, people gained 2.1 points on the BMI index over a five-year period.

-HEIGHT PROBLEM — Researchers at the Karolinska Institute in Sweden found that taller men and women are more likely to develop cancer than their shorter peers. For every 10 cm of height, or nearly four inches, the likelihood of developing any form of cancer rose 18 percent among women and 11 percent for men.

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