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POLITICO New York Health Care, presented by PhRMA: The cost of Hep C; Brooklyn guilty plea

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 Dan Goldberg

THE BIG SPEND New Yorkers are on pace to spend more than $1 billion in state and federal money this year on high-priced Hepatitis C cures. The spending comes amid a national debate over the cost of prescription drugs, the value they present and whether the pharmaceutical companies require greater scrutiny and regulation. Read my full story here:

...On that note, Reuters reports: “A panel of medical experts said on Friday the prices of prescription medicines in the United States need to be brought in line with the value they bring to patients instead of continuing to let drugmakers set any price they choose.”

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AND MAKE SURE YOU FOLLOW Josefa and me on Twitter @J__Velasquez & @DanCGoldberg. And for all New Jersey health news, check out @katiedjennings

SITE NEUTRAL — Early reports indicate that the two-year budget deal negotiated by Congress, and expected to be approved by the Obama administration, will adopt some form of a site-neutral payment rule to offset spending in other areas. Site-neutral means Medicare payments for outpatient services would be capped at the rate Medicare pays for treatments in a physician’s office, even if the procedure took place in a hospital-setting, which has much higher overhead. On Monday, the Greater New York Hospital Association sent a letter to its members warning of the looming cuts, which could cost hospitals across the country $1.44 billion, according to the Medicare PAyment Advisory Committee. “GNYHA strongly opposes including site-neutral cuts in a budget agreement,” the letter said. “Such a cut ignores the legitimately higher costs of providing services in a hospital setting and could severely compromise access to care for some of the nation's most vulnerable communities.”

...President Barack Obama had recommended site-neutral payments as part of his most recent budget. His administration estimates that it would save Medicare $30 billion over 10 years, more than raising the eligibility age to 67. Proponents argue that this is an effective cost-cutting measure made necessary by the wave of acquisitions that has hospitals performing many of the procedures once done by a physician.

GUILTY PLEA — A 46-year-old woman who owned two Brooklyn medical clinics pleaded guilty Monday to defrauding Medicare and Medicaid out of $55 million, according to a press release from the U.S. Attorney's office. Valentina Kovalienko will pay back nearly $30 million after admitting she was part of a scheme that paid patients to undergo medically unnecessary physical and occupational therapy, which was performed by unlicensed professionals. The services were billed to Medicare and Medicaid and the patients would receive a kickback, the release said. Kovalienko was caught in what former U.S. Attorney General Eric Holder described as one of the largest such takedowns in history.

NOW WE KNOW — Men are more likely to be thought of as creative thinkers, according to an article in the Association for Psychological Science. "Our research shows that beliefs about what it takes to 'think creatively' overlap substantially with the unique content of male stereotypes, creating systematic bias in the way that men and women's creativity is evaluated," lead researcher Devon Proudfoot of the Fuqua School of Business at Duke University, said in a press release accompanying the article.

WE'D LOVE TO HEAR FROM YOU: This roundup is for you, so please tell us how we can make it even better. Send tips, news, ideas, calendar items, releases, promotions, job postings, birthdays, congratulations, criticisms and corrections to

** A message from PhRMA: In 2013 alone, the biopharmaceutical industry invested more than $553 million dollars in clinical trials in New York. Learn more about the economic impact of clinical trials in our communities at **

LEGIONELLA UPDATE — St. Joseph’s Hospital Health Center in Syracuse has lifted the restriction on using its water system for emergency services, after tests results showed no presence of Legionella bacteria. Over the weekend, health officials at St. Josephs said they received preliminary test results that indicated some of the water supply may have Legionella bacteria. As a precautionary measure, the hospital restricted the use of tap water for hand washing and instead opted to use bottled water and ice.

CORRECTION On Monday, I wrote that Montefiore Health System was receiving a four-year $6.9 million grant. It is a four-year $9.6 million grant.

Q&A — Modern Healthcare interviewed Michael Cropp, president and CEO of Independent Health, the not-for-profit health insurer in Buffalo.

OPINION — The Wall Street Journal editorial board writes about the demise of Obamacare, and says it is inevitable that the law will be rewritten in 2017 regardless of who is in the White House.

GRANT LAND The University at Albany will establish a Capital Region Medical Research Institute by means of a $550,000 grant, the university announced Monday. The institute will focus on urology, though not exclusively. The grant was provided by the former Capital Region Medical Research Foundation.

MAKING ROUNDS — Kara Kelly has been appointed as the head of the joint program in pediatrics hematology and oncology at a program run by the Women & Children’s Hospital of Buffalo, Roswell Park Cancer Institute and the University at Buffalo. Kelly, who is serving as a professor of pediatrics at the Columbia University College of Physicians and Surgeons, will assume the position Feb. 15, Roswell Park announced in a statement. She will also assume the responsibilities of division chief of hematology and oncology at both UBMD Pediatrics and the Department of Pediatrics in the Jacobs School of Medicine and Biomedical Sciences at the University at Buffalo, where she will be appointed research professor.

ALSO MAKING ROUNDS — Dr. Jyotishman Pathak was named chief of the Division of Health Informatics in the Department of Healthcare Policy and Research at Weill Cornell Medicine. He began October 1. He previously worked at the Mayo Clinic.

PHARMA REPORT — Valeant Pharmaceuticals held a conference call Monday morning to address accusations it created fraudulent invoices through a network of pharmacies it controls. The call raised even more questions, according to The New York Times. “At issue most urgently is Philidor Rx Services, a company Valeant says it does not own or control. Even so, Valeant paid $100 million in 2014 for an option to buy the pharmacy for nothing over the next 10 years. Nearly all of Philidor’s sales are of Valeant’s drugs, and Valeant consolidates its financial figures. Valeant also has the right to approve important roles at Philidor. The opaque structure is troubling. What’s more, the situation is more byzantine than originally imagined. Philidor has the right to buy a pharmacy called Isolani, which owns the right to buy R&O Pharmacy. Such a camouflaged trail can’t sit well with investors.”

...Having trouble understanding what this whole Valeant story is about? The Wall Street Journal has a cheat sheet so you can sound smart at cocktail parties.

-HOW MUCH ARE DRUG PRICES RISING THIS YEAR Pharmalot reports on a new analysis which finds that prices rose 9.1 percent through Sept. 30 for all types of medicines, which trails the 10.9 percent increase seen in 2014.


-HOW RED MEAT BECAME A CARCINOGEN — Bloomberg News provides the backstory of how the World Health Organization decided to declare bacon and other meats as causes of cancer.

-NOT SO FAST — Aaron Carroll explains why nutrition studies are often wrong. “Almost everything we ‘know’ is based on small, flawed studies. The conclusions that can be drawn from them are limited, but often oversold by researchers and the news media.”

The New York Times writes about the tens of thousands of people who may lose their Affordable Care Act subsidies because they failed to file a 2014 tax return. “When the federal insurance marketplace opens for the third enrollment season next Sunday, users will see a new question: ‘Did your household file a 2014 tax return and reconcile any premium tax credit you used?’ If the answer to that question is no, consumers risk losing the subsidies they receive to help pay premiums. Without such assistance, many would find insurance unaffordable. Many of the people potentially affected have incomes so low that they would not otherwise have to file tax returns. But if they received insurance subsidies in 2014, they were required to file this year.”

-HEALTHCARE.GOV PRICES — Premiums are out for states using, the federal exchange. The Kaiser Family Foundation breaks it down.

TODAY'S TIP — Comes from Community Healthcare Network’s Gregory Taddeo, director of dental services. “Halloween is right around the corner. While you are indulging in sugary treats, remember that it is better for your pearly whites if you avoid sticky candies. Candies like taffy or gummies take longer to get washed away by saliva, increasing the risk for tooth decay.”


-MARIJUANA USE DOUBLES — The prevalence of marijuana use in the United States more than doubled between 2001 and 2013, according to a study in Psychiatry. Nearly 10 percent of adults said they used the drug in 2012-2013, up from 4 percent in 2001-2002.

** A message from PhRMA: Every day in New York, countless people fight life-threatening diseases. Their bravery inspires countless researchers and scientists across the country in their quest to develop medicines that help patients live longer, healthier lives. Here in New York, the biopharmaceutical industry has invested more than $553 million during the 2,476 clinical trials that took place in 2013 alone. Each step brings us closer to a cure. To learn more, please visit **

MISSED A ROUNDUP? Get caught up here: 10/26, 10/23, 10/22, 10/21, 10/20

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