Home Local News Big Pharma here could be hit with big tax bills • Centene faces patient lawsuit

Big Pharma here could be hit with big tax bills • Centene faces patient lawsuit

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Big Pharma here could be hit with big tax bills • Centene faces patient lawsuit

ABBOTT AND ABBVIE LOOK TO PAY MORE IN TAXES UNDER NEW FEDERAL TAX BILL: Senate Democrats’ passage of a sweeping tax bill over the weekend will require most of corporate Chicago to dig deeper to pay Uncle Sam, with the area’s pharmaceutical players appearing to be hit the hardest of all.

The measure, which passed 51-50 on a strictly partisan basis in the evenly divided chamber and is expected to clear the House and get President Joe Biden’s signature, would hike tax revenues by well over $300 billion over a decade. Central to that is a minimum corporate tax of 15% of the annual income earned by companies making at least $1 billion. Another key component is a 1% excise tax on share buybacks.

Arguably most exposed of the Chicago area’s largest corporations is North Chicago-based Abbott Laboratories. The pharmaceutical giant’s effective tax rate has ranged from 9.6% in 2019 to 13.9% last year, according to Securities & Exchange Commission filings.

Pretax earnings in 2021 topped $8 billion. So, if earnings continue at that sort of level—first-half profits were 54% higher than at the same point last year—and Abbott must pay, say, an extra percentage point to hit the 15% minimum threshold, that’s another $80 million to $100 million in taxes.

Other major local corporations with effective tax rates lower than 15% over the past few years include North Chicago-based AbbVie, another pharmaceutical giant hived off from Abbott more than a decade ago; Deerfield-based medical products maker Baxter International; and Chicago-based food and farm products processor Archer Daniels Midland. READ TOMORROW.

CENTENE SUED OVER AMBETTER PLAN BENEFITS: Consumers of health insurance plans offered by St. Louis-based health insurance giant Centene, and its Chicago-based subsidiary, Celtic Insurance, have filed a class-action complaint against the companies, alleging they did not provide the advertised benefits.

The lawsuit, filed in the US District Court for the Eastern Division of the Northern District of Illinois on Friday, alleges that Centene, through its subsidiaries, sold “fraudulent health insurance policies” to millions of consumers across 26 states, including Illinois, since 2013 .

The primary issue consumers raise in the complaint is that many members of Ambetter, Centene’s consumer-facing insurance plans, have difficulty finding an in-network provider and, in some cases, have been unable to find any provider that takes Ambetter plans.

As a result, some Ambetter members have suffered delays in treatment, been unable to find treatment, been forced to travel hundreds of miles to in-network providers and pay out-of-pocket fees. The complaint also alleges that Ambetter plans refuse to pay for some services they advertised as covering.

Centene denies the allegations. READ TOMORROW.

HEALTH SYSTEM SURVEY FINDS MAJORITY OF PATIENTS ENROLLED IN PORTALS: A digital benchmarking survey of 35 health systems covering some 23 million patients found that 60% of those systems’ patients are enrolled in patient portals and 43% of all patients are actively using them, Chicago-based digital health care company Avia said in a statement .

Avia’s survey also found that uptake of patient appointment booking is less successful. While 36% of appointments are available to patients online, only 6% of all appointments are being booked online, the statement said. Telehealth use, among the 60% of providers saying they offer video or telephone visits, accounted for 8% of all visits.

Avia’s survey involved health systems partners, such as NorthShore – Edward-Elmhurst Health, Sentara Healthcare, and St. Luke’s University Health Network, tracking patient engagement with online scheduling platforms, patient portals, and virtual care offerings, with data representing over 23 million unique patients, 50,000 providers, and 33 million ambulatory visits.

“Forward-thinking health systems recognize that digital is the fastest, most enduring route to transformation. But the aptitude—and appetite—for measurement has lagged,” Linda Finkel, CEO of Avia said in the statement. “Measurement and comparison to industry benchmarks on key performance metrics is mission critical for health systems to optimize decision-making throughout their transformation journey. Further, digital benchmarks allow health systems to develop tailored strategies and rapidly execute against them.”

NORTHWESTERN OPENS CANCER CENTER IN ORLAND: Northwestern Medicine is expanding its oncology services in the south suburbs with a cancer center at its south campus in Orland Park.

The center, which opened Tuesday, offers hematology and medical oncology care, laboratory services, nutritional counseling and social work, the health system said in a statement. The center also includes full-service infusion suite and specialty pharmacy, with plans to offer surgical oncology, gynecologic oncology, genetic counselors and other subspecialties in the future.

“We are creating a center of excellence where patients receive comprehensive cancer care in one facility to improve patient experience, care coordination and quality,” Dr. Christopher George, medical director of Northwestern Medicine’s oncology program in the south and west suburbs.

JUDGE APPROVES BLUES ANTI-TRUST SETTLEMENT: A federal judge in Alabama approved Blue Cross Blue Shield companies’ settlement of a sweeping antitrust suit in which the insurers agreed to pay $2.67 billion and change practices that allegedly limited competition, Crain’s sister publication Modern Healthcare reports.

The settlement would go into effect 30 days after Tuesday.

The case went on for nine years and the settlement received preliminary approval in late 2020, Bloomberg Law reports. For the work involved in the multibillion, multiyear antitrust case, lawyers will split a $667 million fee, Bloomberg Law said.

ADVOCATE AURORA AND ATRIUM MERGER SPARKS PRICING CONCERNS: Advocate Aurora hospitals in Wisconsin have consistently charged commercial insurers higher-than-average prices since Advocate Health Care and Aurora Health Care merged in 2018, according to a Modern Healthcare analysis of data from the not-for-profit research firm Rand. Economists, researchers and state lawmakers expect similar pricing trends as the health system expands its footprint, although limited data exists on cross-market mergers and the effect on prices.

The RAND data shows a strong indication of Advocate Aurora using its market power to increase prices, said Gerard Anderson, a health policy professor at Johns Hopkins University who reviewed Rand’s findings.

“It’s probable that the Atrium merger will give Advocate Aurora more power to raise its prices because there are no real economies of scale for most services,” he said. “The reason why you merge is to gain market power.”

CPS REVEALS COVID MITIGATION FOR NEW SCHOOL YEAR: To help mitigate the spread of COVID-19 in Chicago Public Schools, students are being “strongly” encouraged to wear masks and get vaccinated, said CPS CEO Pedro Martinez during a public health briefing with Chicago’s top health official, Dr. Allison Arwady, on Tuesday.

CPS will also continue a free program that requires unvaccinated students and staff to be tested for COVID on a weekly basis. CPS and the Chicago Department of Public Health are both hosting vaccination events leading up to the first day of school on Aug. 22.

If students or staff test positive, they will have to stay home for five days but can return on the sixth day with a mask if they test negative or no longer have symptoms.

“Covid is still here,” Martinez said during the briefing. “There is no better protection than vaccinations.”

Katherine Davis

PRITZKER TEAM OPENS ARMS TO ELI LILLY: Illinois has heard Eli Lilly, the Indianapolis-based pharmaceutical giant that over the weekend said Indiana’s ban of almost all abortions “will hinder Lilly’s—and Indiana’s—ability to attract” top talent.

Although no one now wants to give details, efforts to talk to Lilly—as well as Cummins, which released a milder statement, and health care giant Roche, which also has operations in Indiana—will be starting soon, according to a source close to the matter, Crain’s Greg Hinz writes.

Illinois won’t necessarily try to grab the headquarters. But given Illinois’ competitive cost of living compared to other big states that might make a pitch—like New York and California—and its talent advantage over Indiana, a fairly large investment here is potentially within reach, the source says.

“Given this new law, we will be forced to plan for more employment growth outside our home state,” Lilly said in her statement.

ALLSCRIPTS’ STRATEGY FOCUSING ON PAYER, LIFE SCIENCE GROWTH: Chicago-based Allscripts looks like its continuing to focus on growing its payers and life sciences business, Fierce Healthcare reports.

The health care IT business sold its hospital and doctors’ practices segment earlier in the year to Constellation Software’s subsidiary, N. Harris Computer Corporation. Executives said the company plans to use proceeds from the deal to support strategic M&A for Veradigm and share repurchases, Fierce Healthcare said.

The company’s Veradigm business has the largest linked electronic health records claims patient database available for research, sourced from and directly connected to clinical platforms.

MEDLINE HELPS OUT FLOOD VICTIMS IN EASTERN KENTUCKY: Medline Industries is donating supplies and funding to people hit hard by the destructive flooding in eastern Kentucky, the Northfield-based medical supply distributor said in an emailed statement.

To date, Medline has donated more than $40,000 in cash and in-kind donations of critical health care supplies through SOS International from the company’s distribution centers in Jeffersonville, Indiana, and throughout the US, Medline said.

PEOPLE ON THE MOVE

• ATI Physical Therapy has hired Emily Tansey as chief people officer. She is the third female member added to the Bolingbrook-based company’s leadership team this year, following the hiring of Sharon Vitti as CEO and her hiring of Diana Chafey as chief legal office, ATI said in a statement. The statement said that 60% of clinicians are women in the physical therapy field.

Tansey most recently served as chief people officer at elder-care provider InnovAge and prior to that was in human resource leadership at CVS Health for more than a decade, the statement said.

Xenia Kovacs joins Schaumburg-based HeartcoR Solutions as associate director of clinical project management.

Kovacs has more than 25 years of experience managing scientific clinical studies at health care and life sciences organizations, the company said in a statement. Prior to joining HeartcoR, Kovacs served in senior clinical project management roles for Abbott Molecular, Abbott/AbbVie, and Pfizer.

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