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Trump administration postpones restrictions on costly bandages

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The Trump administration announced Friday that it would delay the implementation of Biden-era rules intended to limit coverage of unproven, costly bandages known as skin substitutes.

The policy will be It’s late until 2026 allowing businesses to take advantage of the loopholes in Medicare rules to continue to set higher prices for new products. The New York Times reported Thursday that businesses are selling these bandages to doctors at discounted prices, while doctors are charging Medicare for the price of full stickers and pocketing the differences.

According to an analysis conducted by Earty Read, an actuarial company that assesses the costs of large healthcare companies, Medicare spending has skyrocketed above $10 billion from $1.6 billion in 2024. Some experts said bandage spending is one of the biggest examples of waste in the history of Medicare, an insurance program for the elderly.

The Super PAC for President Trump’s election campaign received a $2 million donation from Extreme Care, a leading seller of skin alternatives. Trump has criticised his social media policy twice, saying it hurts patients who use the product with diabetic pain.

“‘Crooked Joe’ has broken through policies that will lead to more suffering and death for Medicare diabetics,” Trump wrote on Truth Social in March.

Extremity care also criticized the plan, claiming it would disrupt the supply chain, eliminate innovation and increase costs for both doctors and patients. The company says it complies with high ethical standards, but did not respond immediately to requests for comment regarding the new delay in the policy.

Over 120 skin alternatives are on the market. They average an average of $5,089 per square inch, with the most expensive time exceeding $23,000.

Biden-era rules would have limited Medicare coverage for a small subset of products that have been shown to be effective in randomized clinical trials. The new policy will be applied to patients using ulcer and leg pain bandages known as ulcers. This can be caused by diabetes or poor circulation.

Medicare said in a Friday’s Statement It will consider policies as part of the transition to a new administration. During that time, he said, “We believe it is important to maintain patient access to skin replacement products with quality evidence of effectiveness.”

Mass Coalition, a group supporting the skin substitute industry, said it was “satisfied” with the delay. Public relations officer Preya Nonona Pinto said the group is looking forward to working with Medicare on “coverage policies and payment reforms that guarantee access to skin replacements.”

Source: www.nytimes.com

Medicare spends billions on costly bandages while doctors face cuts

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According to industry experts, companies can set high prices for their products due to the intricacies of Medicare pricing rules. During the first six months of a new bandage product’s lifespan, Medicare sets a refund rate based on the company’s chosen price. The agent will then adjust the refund to reflect the actual price that your doctor will pay after any discounts.

To avoid decreases in refunds, some companies opt to introduce new products regularly.

For example, in April 2023, Medicare started reimbursing $6,497 per square inch for bandages called Zenith sold by Legacy Medical Consultants, a company based in Fort Worth, Texas. However, six months later, the refunds for Zenith dropped to $2,746.

In October 2023, Medicare began reimbursing $6,490 for a “double layer” bandage for a new product called Impax from Legacy.

Both products use the same images and similar descriptions in their marketing materials, touting them as offering optimal wound care and protection.

Analysis by Earty Read shows that spending on Zenith and Impax has surpassed $2.6 billion since 2022.

When asked about the marketing and pricing strategies for these products, Legacy Medical Consultants did not provide a response. Company spokesman Dan Childs stated, “Legacy abides by laws that govern the system.”

In the field of wound care, doctors and nurses visit patients’ homes for treatment. Some companies that specialize in skin alternatives target doctors to help mitigate the rise in bandage prices.

Dr. Caroline Fife, a Texas-based wound care physician, highlighted the industry’s excesses in her blog last year. She shared an email she received from an undisclosed skin replacement company, which claimed that doctors could generate significant revenue from their bandages.

Some companies offer doctors bulk discounts of up to 45%, as reported by interviews with doctors and contracts reviewed by The Times. However, doctors could still receive Medicare rebates for the full price of the product.

The anti-kickback law prohibits physicians from receiving financial incentives from pharmaceutical or medical supply companies. While Medicare allows for discounts, experts suggest that rebates on bandages may have violated federal law by not requiring actual bulk purchases. In some cases, doctors only needed to buy three products to qualify for a 40 or 45% discount.

Lawyer Reuben Guttman from Washington, D.C., who represents Medicare whistleblowers, commented, “That’s not a volume discount,” indicating that such practices could be a way to disguise kickbacks.

In 2024, at least nine healthcare practices claimed over $50 million in Medicare reimbursements for skin replacements, according to an analysis conducted by The Times and the National Association of Associations representing healthcare organizations incentivized to reduce Medicare spending.

Source: www.nytimes.com

Car manufacturers faced with costly decisions due to Trump’s tariffs

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President Trump’s new 25% tariffs on imported cars and parts have prompted automakers to consider various responses that come with financial implications, ultimately leading to higher car prices as analysts suggest.

Manufacturers may opt to shift production from countries like Mexico to the US, increase production of existing models made in the US, or cease sales of less profitable imported models. Regardless of the decision, consumers should expect to pay more for both new and used cars, with estimates indicating potential price hikes ranging from $3,000 to over $10,000 depending on the model.

In addition, potential additional tariffs announced by Trump could further impact car prices if implemented, especially in the midst of escalating trade conflicts.

The long-term effects of Trump’s tariffs on the automotive industry are expected to be disruptive and costly for American consumers, as noted by Michael Cusumano, a professor at MIT Sloan Management School.

Trump’s tariff threats, stated as permanent, have rattled automotive executives who hoped for negotiation leverage, leading to challenges in reshaping manufacturing and supply chains to comply with the imposed tariffs.

While Trump envisions tariffs as a strategy to revive American automobile manufacturing, the process of relocating production to the US involves substantial costs and complexities for automakers, potentially impacting prices for consumers.

The uncertainty surrounding tariffs has raised concerns among automakers about making long-term investment decisions, as the potential for policy changes under a new administration looms and could reverse current tariff implications.

While tariffs may incentivize choosing US-based production sites, consumer costs may rise as automakers prioritize compliance over manufacturing efficiency.

Major investment decisions impacted by tariffs could have substantial financial repercussions for companies, with potential risks if tariffs are subject to policy changes in the future.

Automakers may be cautious in passing on tariff costs entirely to consumers, as excessive price hikes could lead to reduced sales and revenue, potentially contributing to economic downturns.

In response to tariffs, some automakers have already raised prices, highlighting potential price increases for various car models as a result of imposed tariffs.

As the industry grapples with tariff impacts, automakers may explore strategies such as suspending sales of less profitable models and focusing on domestically produced vehicles to navigate the evolving landscape of trade policies.

Despite efforts to minimize tariff effects, most automakers rely on foreign-made parts, causing tariffs to impact overall vehicle costs and potentially leading to price adjustments across different car models.

As automakers navigate the challenges posed by tariffs, market dynamics and consumer responses could shape future decisions regarding production and pricing strategies in response to evolving trade policies.

Source: www.nytimes.com