Welcome to the latest edition of Investigative Roundup, highlighting some of the best investigative reporting on healthcare each week.
Surprise COVID Bills
Although the federal government has taken steps to prevent surprise billing for COVID-19 patients, the practice is still occurring, the New York Times reports.
The Times collected 350 surprise bills from coronavirus patients, the majority of which come from out-of-network doctors, ambulances, and medical labs that patients didn’t choose or didn’t realize were involved in their care.
Congressional efforts to prevent surprise bills fell through after private equity firms poured millions into advertising opposing the plan, the Times reports. Congress ultimately passed $175 billion in provider relief funds for hospitals and doctors who agreed not to send surprise medical bills when accepting the funds. Additionally, insurers promised to cover hospital stays in full for plan participants.
Yet labs and ambulance services didn’t get those funds, so they were free to bill coronavirus patients as they pleased.
In one instance reported by the Times, an air ambulance owned by Conemaugh Medstar (owned by Air Methods, in turn owned by private equity firm American Securities) sent a Pennsylvania patient a bill for $52,112. The patient, who was intubated, needed to be airlifted from one Philadelphia hospital to another, both of which were in her insurance network.
The plan initially said it would pay about $7,500 of the initial charges, but subsequently reversed its decision, leaving the patient on the hook for the full amount.
The patient called her state’s insurance commissioner, which doesn’t regulate air ambulances, but it appears to have strong-armed the insurer into paying, according to the Times.
In another instance, a California COVID patient was hit with two bills of $1,471 each for the Los Angeles Fire Department ambulances that took her and her husband to the hospital, which was only a mile from their house. While insurance covered most of the bill, she was stuck owing nearly $300.
Another patient in Austin, Texas, was treated for COVID in an in-network hospital but seen by many out-of-network doctors. Her insurer denied about $4,000 of their charges.
“I think about the bills several times a day,” the patient told the Times. “How am I going to pay this all off? My parents were like, ‘Don’t worry about this right now, focus on getting better,’ but that’s easier said than done.”
Moderna CMO’s $50M Rolling Payday
Each week, Moderna’s chief medical officer Tal Zaks, MD, PhD, has been selling off his stock in the company through pre-scheduled trades, earning more than $50 million since the beginning of the pandemic, STAT Plus reports.
The sales are completely legal, executed under a Securities and Exchange Commission rule called 10b5-1 that allows insider trades under certain circumstances — in this case, because the trades were scheduled before Zaks had insider information that could work to his advantage.
Zaks’ first trade came on Feb. 21, three days before Moderna announced that its vaccine was ready for human trials. He sold 10,000 shares every week for the next 10 weeks, until his ownership stake was liquidated, bringing in $3.4 million, STAT reported.
Zaks then moved on to his stock options, exercising them every Tuesday and then immediately selling those shares. He has thus far earned $48.9 million on nearly 1 million options.
Moderna’s stock price has nearly tripled since Zaks began selling his shares, and it’s expected to rise even more if its coronavirus vaccine is approved, but Zaks isn’t waiting for that, STAT reported.
A Moderna spokesperson said the company is “aware of the questions that have been raised related to stock sales by members of its executive team.”
Nell Minow, of watchdog ValueEdge Advisors, said Zaks’ actions are rare: “When I complain about stock sales by insiders, they always say, ‘Oh, their kids are going to college. They have liquidity concerns.’ Give me a break,” Minow told STAT. “They’ve got plenty of cash, and you can always borrow against your stock holdings if it comes to that…. It’s impossible for me to imagine any legitimate reason for this.”
24 States in COVID Red Zone
Nearly half of U.S. states were in the federal government’s “red zone” for new coronavirus cases, according to the latest White House coronavirus task force documents obtained by the Center for Public Integrity (CPI).
Many of the 24 states in the red zone were in the middle of the country, including North Dakota, South Dakota, Wisconsin, Montana, and Utah, according to the Oct. 4 task force report, which urged masks and testing in hard-hit states.
Red-zone Kansas, where most counties have opted out of a state mask mandate, was told that masks “must be worn indoors in all public settings and group gathering sizes should be limited.”
This was also the first time the task force recommended closing schools, noting that outbreaks in 10 Idaho counties may be related to school openings. “Recommend change to online K-12 classes in counties and metro areas with elevated test positivity and incidence among school-age children and increasing hospital utilization,” the report stated.
Vermont was the only state in the green zone. Nine others were in the yellow zone, followed by 17 in the orange zone.
The White House coronavirus task force distributes the reports to governors every week but doesn’t publish them. CPI began obtaining the reports in July.
More Calls to Release Warp Speed Contracts
Following an NPR investigation, Democrats in Congress are calling on the Trump administration to release Operation Warp Speed vaccine contracts.
Rep. Lloyd Doggett (D-Texas), who has been working on a bipartisan bill to create a central database to track COVID-19 spending, said the White House hasn’t responded to requests for information on coronavirus spending and “really just seems to be playing a game of hide-and-seek.”
Sen. Patty Murray (D-Wash.) and Rep. Jan Schakowsky (D-Ill.) also objected to the lack of transparency and called for the contracts’ release.
Last month, NPR reported that the Trump administration awarded more than $6 billion in contracts tied to Operation Warp Speed through a third party company, Advanced Technology International, bypassing normal processes. Contracts awarded this way don’t have to include taxpayer protections, NPR reported.
Rick Bright, PhD, who was fired from the Biomedical Advanced Research and Development Authority (BARDA) after clashing with the administration, filed a whistleblower complaint in May alleging that some federal coronavirus-related contracts were awarded based on “political connections and cronyism.”
Bright told NPR that administering contracts through third parties could hide certain terms: “We don’t know the rewards or the incentives that the companies are getting, which might drive some companies to take additional risk or maybe do things inappropriately.”