Issue link: https://beckershealthcare.uberflip.com/i/1161749
27 CFO / FINANCE BCBS of Minnesota defends restrictive policies that hospitals call unlawful By Morgan Haefner B lue Cross Blue Shield of Minnesota held strong against criticism over its new policies that end reimbursement for routine colonos- copies and other services under certain circumstances, according to the Star Tribune. BCBS of Minnesota issued a bulletin to hospitals on Dec. 3, 2018, indi- cating the insurer would stop reimbursing hospitals for seven forms of upper and lower gastrointestinal endoscopy for commercially insured members if a cheaper ambulatory surgery center is within 25 miles. The policies, which took effect March 4, include colonoscopies for preven- tive colon cancer screenings. Hospitals contend the policies violate state law. The Minnesota Hos- pital Association, which represents 141 hospitals, sent a letter to state officials arguing the policies break laws against fraud and deception. In response, BCBS said it stands by its policies, and on July 19 rejected claims that it put the policies in place to delay or deny care. It said it is working with South Carolina-based for-profit contractor eviCore to enforce evidence-based policies for paying for and approving care, ac- cording to the Star Tribune. Minnesota Attorney General Keith Ellison, one of the recipients of the hos- pital association's letter, said his office will investigate the accusations. n 2019 drug price hikes running 5 times the rate of inflation By Alia Paavola P harmaceutical companies have raised the prices of 3,400 drugs this year, 17 percent more than during the same period last year, according to a new Rx Savings Solutions analysis cited by CBS News. Four more things to know: 1. The average price increase of the drugs is 10.5 percent, about five times the rate of inflation. 2. The prices of 41 drugs have been raised more than 100 percent this year. 3. Some of the largest price hikes this year have been for the antidepressant Prozac (879 percent increase); steroid topical cream mometasone (381 percent hike); and pain reliever and cough medi- cine promethazine/codeine (326 percent increase). 4. The drug hikes come as lawmakers and the Trump administration work to address the prob- lem of rising prescription drug costs in the U.S. n Mayo Clinic wins $11.5M tax fight By Ayla Ellison A federal judge sided with Rochester, Minn.-based Mayo Clinic in a dis- pute over $11.5 million in tax re- funds, according to Law360. In May 2016, Mayo filed a lawsuit against the IRS in an attempt to recover tax pay- ments the hospital says it was wrongly forced to pay. The case centered on wheth- er Mayo is primarily an educational orga- nization or a medical center. Mayo contends it is an "educational orga- nization" that "makes patient care available as a necessary and integral part of its edu- cational activities." However, the IRS con- siders Mayo to be "a parent company of a healthcare system as its primary purpose and function." Under the IRS' classification, more of the income generated by Mayo's investments is taxable. Mayo and the IRS filed competing motions for summary judgment in the case, and Judge Eric C. Tostrud granted Mayo's mo- tion on Aug. 6. The issues involved in the lawsuit date back to 2009, when the IRS audited Mayo Clinic and issued an "adjustment" for 2005 and 2006. The agency later expanded the adjustment to include seven nonconsec- utive years of the clinic's tax returns — 2003, 2005 to 2007 and 2010 to 2012. The years 2004, 2008 and 2009 were excluded because Mayo did not report any income from investments during that time. In 2014, the IRS concluded Mayo Clinic does not qualify for a tax exemption on revenue generated by "debt-financed re- al-estate investments." That type of income would not be taxed if the IRS categorized Mayo Clinic as a nonprofit educational or- ganization. Because of the adjustments, the IRS re- quired Mayo Clinic to make $11.5 million in additional tax payments. The health sys- tem made the payments and then asked the IRS for a refund of the full amount. Howev- er, the IRS rejected the refund claim in Au- gust 2016. One month later, Mayo sued the IRS to recover the $11.5 million payment. In the opinion and order issued Aug. 6, Mr. Tostrud said Mayo is entitled to the $11.5 million tax refund because the federal gov- ernment exceeded its authority by creating extra requirements for organizations to qualify as tax-exempt educational organi- zations, according to Law360. n