March 17, 2026 · Insurance Committee · 8,415 words · 10 speakers · 104 segments
Assurance Committee to order. Mr. Friend, would you please call the roll?
Chair Lampton.
Here.
Vice Chair Craig.
Here.
Ranked Member Hall.
Representatives Barhorst.
Here.
Cockley.
Here.
Daniels.
Here.
Dieter.
Here.
Jarels.
Here.
John.
Here.
King.
Here.
Lorenz.
Here.
Peterson.
Yes.
And Sweeney. We have a quorum present. We'll proceed as a full committee. Members of the committee, the minutes from our previous meeting are on your iPads. so I'd like to approve those without objection. And hearing no objection, the minutes are approved. At this time, I call forward House Bill 220 for its sixth hearing. What is the pleasure of the committee? The chair recognizes.
Vice Chair Craig for a motion. Chairman, I move to favorably report House Bill 220 and recommend its passage.
Mr. Friend, would you please call the roll?
Chair Lampton.
Yes.
Vice Chair Craig.
Yes.
Ranking Member Hall, Representatives Barhorst, Yes. Cockley, Yes. Daniels, Yes. Dieter, Yes. Jerrolds, Yes. John, Yes. King, Yes. Lorenz, Yes. Peterson, Yes. and Sweeney.
With the 11 affirmative votes and zero negative votes, House Bill 220 is favorably reported out of committee. We will leave the roll open until 1 p.m. This concludes the sixth hearing on House Bill 220. No comments from the peanut gallery. At this time, I now call forward House Bill 579 for its first hearing sponsored testimony. Testifying with us today is Representative Jean Schmitt. Thank you, Mr.
Good morning and welcome to committee. Good morning and happy St. Valentine, I mean St. Patrick's Day. We're all wearing green. Anyway, Chair Lambton, Vice Chair Greg, Ranking Member Hall, and all members of the House Insurance Committee, thank you for the opportunity to allow me to testify on House Bill 579. This bill addresses the growing use of artificial intelligence by health insurers when making decisions about patient care. Technology is moving quickly. While there are real benefits, we have to make sure it is being used responsibly. I've heard from physicians and patients who are concerned that artificial intelligence is being relied on too heavily in prior authorization decisions. When that happens, care is delayed or denied without meaningful human review. That is not how medical decisions should be made. House Bill 579 does not ban the use of artificial intelligence. technology can be helpful, but this bill makes it clear it cannot be the only determining factor when care is medically necessary. Those decisions must involve a licensed medical professional who can look at the full clinical picture of the patient. This bill improves transparency. Health insurers would be required to report how they are using artificial intelligence in utilization reviews. If these tools are affecting coverage decisions, then regulators and policymakers need to understand just how those are being used. Patients also deserve a clear explanation when care is denied or delayed. Health care is personal. People should not be left wondering why decisions are being made about their treatment. This legislation includes oversight by allowing the superintendent of insurance to review the use of artificial intelligence. As new technology becomes more common, accountability must keep pace. I would also like to note that similar legislation has been introduced in Ohio Senate, Senate Bill 164, sponsored by Senator Alcatrona, and reflects the same goal of making sure innovation in health care protects patients and supports providers. Artificial intelligence can be a useful tool, but it should never replace human judgment in making medical decisions. House Bill 579 ensures that balance. Thank you for the opportunity to testify, and I'll be happy to answer any questions you might have.
Thank you, Representative. Do we have any questions from the committee?
Representative Gerroles. Thank you, Chair, and thank you, Representative, for this bill. You know, one of the things that I wanted to ask as it relates to kind of the human review, can you walk through like and maybe even explain how your bill is going to require that human review for AI decisions and how it's going to reduce that risk? because I'm trying to, some folks who are doing these reviews, they're not necessarily always doctors. They're not always the folks in, as a doctor isn't making the decision for a script or surgery or procedure. The folks who are making a review on insurance may not have the same credentials. And so how, how are you going to make sure that there's no bias in our system, or at least try to address that inherent bias from the AI with a human interaction? Help me understand and unpack how that's going to happen. Through the chair. Thank you, representative.
It's an excellent question, and I'm not sure how we get through human bias, but we can never let artificial intelligence be the determining factor. I had a personal experience with it. You know, I'm a runner, and last July 25th, hotter than Hades, I did speed work. I felt terrible. I had three of the seven signs of heat stroke. Called my doctor who was out of town. They said, go to the emergency room. I wasn't going to go. An hour later, I still felt like I was going to throw up. I was dizzy, had a headache. All this, three of the seven signs called again, went to the emergency room. My troponin at that point was at 79. 161 is a heart attack. That was three hours after the event. So we don't know where the troponin was. We only know where it was when I entered the emergency room. Long story short, I spent the night in the hospital against my will. My doctor actually called my daughter and said, I don't care if you have to handcuff her to the bed. We've got to make sure she's okay. Had a stress test. It turned out perfect. Four days later, I got a letter from the insurance company denying the coverage and giving me a $17,000 bill. I knew then that naked eyes did not look at that. It was AI. It was artificial intelligence because you don't have enough time in an insurance industry to have a real eye look at it. We went and challenged it twice, were denied twice, and then my doctor pitched a fit with the doctor at the insurance company, and it was finally covered. And I realized then that most people don't have the self-assurance to fight this, and then they're going to end up with a medical debt. And so I looked into the fact that AI can be the sole determining factor in what your issue is. I talked to doctors about this as well as other people whose insurance coverage was denied. And I felt that it is important to make sure that human eyes are interacting with it. And by the way, my cousin was in the insurance industry for years reviewing insurance claims, and they were trained as to medical necessity. Then the second step was if it was denied that a doctor would review it. That's not always the case right now. In my case, the doctor was not the one reviewing it at the second stage. Now it's going to have to be a medical provider. Just one more question. Follow-up, yes. Thank you. And just to kind of go like maybe 50,000 feet in the air, have you talked with insurers about their usage of AI? Like how prevalent is this really? Are there some insurance companies that are doing it and some that are not? Because I will see that that's maybe a competitive edge, but that competitive edge is every insurance company may not be doing the same thing. And so have you talked to them about kind of the ecosystem, what's going on?
Through the chair, Representative, actually they really are very hesitant to say whether they're using it at all when you talk to them. They don't give you a clear picture, so I don't have a map on how much is being used. The question is if it's being used at all. Human eyes need to be the ones that look at it first. Thank you.
Representative Cockley?
Thank you, Chair, and thank you for your testimony today, Representative. Kind of in a similar vein, I've heard from many people that this is something that insurers are doing all day, every day, is using AI. And that's why oftentimes people don't want to necessarily comment on it or show reports of it. And so I'm curious that if this bill were to be passed, would it unintentionally cause an administrative burden on providers and the insurers? Through the chair. Thank you, Representative. That's a great question, but you know, until we had AI, a naked eye, a human eye was doing it to begin with, so it shouldn't be causing them an undue burden to have the human eye first and then have AI look it over. There's nothing wrong with AI being the second look, but there's everything wrong with AI being the first look.
Any other questions from committee? All right, seeing none, thank you very much for your testimony this morning.
Thank you so much.
And that will conclude our first hearing of House Bill 579. And now call forward House Bill 716 for its first hearing. Sponsor testimony. And this morning we have our own Meredith Craig and Representative Kelly Dieter. Looking very festive. Happy St. Patrick's Day. The floor is yours.
Chair Lampton, members of the Insurance Committee, thanks for the opportunity to testify on House Bill 716 alongside my joint sponsor, Representative Kelly Dieter. House Bill 716 would create an all-payer claims database within the Ohio Department of Insurance. I'm going to call it an APCD, though I'm probably going to fumble on those words as I'm talking. So I may even just say all-payer. It's easier that way. So an all-payer is a centralized data system that collects medical, pharmacy, and dental claims data from public and private payers operating within a state. These databases allow policymakers, researchers, employers, and health care stakeholders to better understand how health care services are utilized, how much they cost, and how these costs vary across regions and payers. All-payers were developed to provide a more complete view of the health care system. They typically capture claims across all major settings of care, and with this information, states can analyze health care utilization, spending patterns, and price variation, as well as evaluate the impact of policy changes. Legislatures frequently rely on all payers to evaluate cost drivers, measure trends in emergency room use or hospital admissions, better understand access to care, particularly in rural communities. This type of data can also support transparency initiatives by helping policymakers and consumers understand price differences for common services. States use all payers as a policy tool to promote greater transparency in health care pricing and utilization. With better data, states can assess geographic variation in spending, identify drivers of cost growth, evaluate the impact of these policy changes, and support initiatives designed to improve health care cost and affordability. Currently, approximately 30 states operate either a mandatory or voluntary all-payers database, including several neighboring states in the Midwest, Indiana being right next door. These databases have become an increasingly important resource for state governments, seeking to understand the true cost of health care services and how those costs impact everyone involved. Ohio already collects certain health care data, including hospital and patient admissions, emergency department visits, ambulatory surgery data, and hospital discharge information However this information is reported directly from hospitals and facilities rather than from insurers or other payers As a result the available data typically reflects hospital charges rather than the actual amounts paid, and it does not capture care delivered outside of hospital settings. This means that a large portion of our health care system is not currently represented in Ohio's existing data infrastructure. An All-Payers Claims Database helps address these gaps by collecting standardized claims data directly from payers, allowing the state to analyze actual paid amounts across a wider spectrum of health care services.
Thank you, Representative Craig, Chair Lampton, and members of the committee. It is important to note that federal law places some limitations on the scope of these databases. In 2016, the Supreme Court ruled that states cannot require self-funded employer health plans governed by ERISA to submit claims data to an all-payers claims database. Because ERISA includes a federal preemption clause, states cannot regulate certain administrative requirements for these plans. As a result, all-payers claims databases cannot capture every claim in the health care system and self-funded employer plans, which cover a large share of Americans with employer-sponsored insurance, may not be fully represented. However, these plans may voluntarily submit data, even though states cannot require it. Even with this limitation, all payers' claims databases still provide a robust and valuable data set, often representing a significant share of a state's insured population through commercial fully insured plans, Medicaid managed care plans, Medicare Advantage plans, and the state employee health insurance program. Under House Bill 716, claims data submitted to the all-payer claims database would include information from both public and private payers to the extent permitted under federal law. The data would be de-identified and maintained in accordance with applicable privacy protections, and it could be made available to approved users, including researchers, policymakers, employers, and other stakeholders through controlled access or subscription-based data products. The goal of this legislation is simple, to give Ohio employers, plans, providers, and policymakers better data to make better decisions. Health care represents one of the largest and fastest growing sectors of our economy. Without reliable, comprehensive data, it is difficult to fully understand cost drivers, evaluate reforms, or ensure that Ohioans are receiving value for the health care dollars that they spend. House Bill 716 takes an important step towards improving transparency and strengthening Ohio's ability to analyze and address the cost and delivery of health care across Ohio. Thank you for the opportunity to present this legislation, and we are happy to answer questions.
Well, thank you very much for your presentation today. Do we have any questions from the committee? Okay, I'm going to ask one, maybe two. This in no way violates the HIPAA requirements. There's no names attached, so that stays?
Correct.
Okay. Okay. The payers that are submitting this data, were there in the database itself, will their names be attached to it, or will that be redacted? So we don't know who paid what, but we know what was paid.
Yeah, thanks, Chair, for that question. Similar to the HIPAA, right, we want to make sure that trade secret information remains as such, So we want to make sure all if you read the bill, it's very broad and we give a lot of discretion currently with the Department of Insurance, even through the rulemaking process. I think as we continue these conversations and working with the other stakeholders, we'll flush out exact details. I'm a big believer in taking what's working in other states. And because a lot of other states are doing this, I think we have a good opportunity to choose what works best and model Ohio accordingly. Very good.
Rep. John?
Thank you, Chair. Thank you for your testimony. So Representative Dieter mentioned in her testimony about the plans that you cannot require. So what percentage of the claims do you think that are out there that this would capture?
Thank you for the question. Through the Chair, I'm going to guess roughly, just based on research, about 50%.
Follow-up?
Representative Jerrolds.
Thank you both for this bill. I guess my only question I'm trying to understand is, so when we collect this data, I understand it's going to be de-identified and other things, what are the potential policy decisions that we will be looking at using this data to do what?
Great question through the chair to the representative. One great example currently, as we work through the Rural Health Transformation Funds, I believe that we could have used it more targeted, very targeted actually, to places that we've identified gaps, say in preventative care, tracking and monitoring chronic disease presence and management. And we could really go on down the line to prescription opioids or prescription drug use. We have some partial databases currently, like the OR system that tracks just the prescription, but we don't have anything that tracks the patient after they get the prescription and what happens to them as a result of that prescription.
Got it. Thank you.
And I'll chime in, Chair, if I can. I'll give an example of what policy we've actually passed and implemented, and it's working well, but during the surprise billing conversation about how many years ago was this, five or six years ago, you know, we thought, so I was working at the department at the time, and it kept getting brought up, well, how do we figure out, right, we're not going to surprise bill patients, so how do we figure out what that actual median in-network rate is? And we had to come up with a creative formula because the state of Ohio does not have an all-payers claims database. So I think if we would have had something like that, it probably would have been a little bit of a simpler process. So those are types of policy that we passed. Working well, it just probably would have went smoother if we had something like this. Representative Barhorst. Through the chair, thank you for your testimony, representatives. I just was curious if there's a state that you would view as the model that we could kind of look into as far as this new database, what state's doing it best.
Yeah, through the chair to represent Barhorse. I don't know if we know what state is doing it best, which is why I kind of want, I think both of us want input from the various stakeholders to figure out. Because many of these payers, right, they operate in multiple states. You know, Indiana obviously is right next door, so it makes sense to kind of look at what they're doing. but again they contracted their all payers claims database out with someone I don't know if we're necessarily going to want to do that I think it's something that the department can administer and operate themselves so I think those are all the questions we're looking to get answered we want feedback from folks so would welcome your input on that as well follow-up any additional questions from
committee all right seeing none thank you very much for your testimony this morning. Thank you. And this concludes the first hearing of House Bill 716. Now call forward House Bill 682 forward for its second hearing proponent testimony. We do have some in-person folks this morning. We have, first up, we have Dr. Randy Drosik. And Dr. Drosik, thank you very much for Joining us today, the floor is yours.
Thank you. Chairman Lampton, Vice Chair Craig, ranking members and members of the House Insurance Committee, thanks for having me here for a bill I think is vitally important to our patients for House Bill 682. My name is Randy Drosik. I'm a practicing hematologist-oncologist for about 35 years, even though I look a lot younger, I get it, in oncology hematology care in Cincinnati, Ohio. We are the largest independent practice in the state of Ohio, and there are other independent practices. We've got about 50 cancer providers, and we deliver very high-quality care. We do a lot of things that universities and local hospitals don't do. We have clinic hours on Saturday and Sunday to keep our patients out of the emergency room, which we all know is extremely expensive. We're the only people in Cincinnati that offer that service. and we've been doing this and we've been in practice for about 40 years. We also have clinical trials. We have over 40 clinical trials in our office and we have a link to a first in humans trial facility with that. I'm here on behalf of my colleagues and my partners, but really I'm here on behalf of my patients to keep their care safe, cost effective, and to prevent life-threatening illnesses to turning into death sentences. and that's what I'm worried about with white bagging. I also want to thank Representative Craig and Senator Manning for bringing this legislation forward and bringing it to your attention because I think it's something that could be easily overlooked. Today, if you're one of our patients and you come in the office, I will see you. We'll have a person who is certified to mix your chemotherapy, someone who's certified to deliver your chemotherapy. This is a closed distribution system. Drugs are delivered to our office. They are put on a shelf or a Pyxis, which is an electronic machine, and we know how to get those out. And there's very little change of hands of those drugs. And we know through medical care, the more things change hands, the greater the risk of error. This has been looked at in the pharmacy. It's also been looked at even with residency training. When you start passing patients off so much, errors are made, and this is something we want to prevent. This has become even more important because cancer care is now personalized, and we actually call it personalized medicine or target-directed therapy. These drugs, as I said, are presented and done on site. Because of this, we're incredibly cost-effective. In fact, I think it's very easy to say that we're the most cost-effective cancer delivery system in the state and independent practices like ours. Groups like ours across the country last year saved Medicare alone, just on cancer care, just Medicare, in excess of $300 million. And this was documented through a program through Medicare that tracked this. So we know we're cost effective. Not only that, groups like ours that are independent are the only ones that really saved Medicare any money. Sometimes to get health care delivered in a hospital, it can be 2 to 2.5 to 3 times much more than us. do with us. So what's white bagging? White bagging is where the drug company wants to send us the patient's drug, and then the patient comes in. We go back in the back office again, find that little white bag or whatever they send it in, and match it to that patient. That sounds all well and good, but here's why it's not. The drugs come in, let's say, from four different insurance companies. Now we have a stocking problem. Where do you keep everybody? Different changes come in. Four different suppliers coming in. Four different bags on the shelf. Much more prone to error. That's one problem. Two, it's expensive to keep all that stocking straight. That's problem number two. But what's the most important problem? What happens to the patient? Let's say that you come in and you're trying to hold a job down. You're trying to take care of your children. And I go, hey, your weight has changed. Your blood counts are different. Your performance status will change. I've got to change that dose. What happens to that medication? It has to get shipped back to your insurance company, your PBM or whatever. You can come back tomorrow if we can get it in that amount of time because we order most of our drugs a week ahead of time to keep us properly stocked. So now you've got to take another day off work. You may have to have another day of getting babysitting or child care coming in. And I've run up our bill, and I've run up your time. And if you're someone who has six months to live, and I do that three or four times, and that's how often we can change drugs, and this happens to about 25% of our patients, I can take away an entire week of your life in six months quite easily. That's something that we can't really do to our patients. It's just not fair to them. And what happens when we can't use that drug? It goes to waste. you can't send it back and use it on somebody else. It's already been tailored to that person, right? Unless, I guess, you could find somebody across the country that has that same body weight, same white blood count, same performance status, which is highly unlikely and needs that same dose. That's just preposterous to even think it can happen. As I mentioned before, when you're protecting patient safety, we need a narrow chain of command a narrow chain of events of what happens with these drugs These drugs are highly complex They have to be stored in a certain manner They have to be stored at a certain temperature When we know they're coming in from our supplier, we know that that's happened. When we know it comes in with four or five different suppliers and four or five different insurance companies who are getting it from a supplier, how did they get it to the insurance company? How did they get it to us? We don't have any control over that. And again, it's not about liability, even though, yes, it is. It's really about patient safety. So when you look at this, the reason why we don't think white bagging is safe or appropriate for our patients, I actually think it's going to run up. It's going to definitely run up our costs. And I think in turn it's going to run up the patient costs. And in turn with that, it's not going to be nearly as safe as what we do today, and it's not going to be anywhere close to convenient for our patients who are suffering from a significant illness to ask them to come back tomorrow or next week. Your drug is either the inappropriate dose, or in some cases we can't get it because it didn't get delivered on time. And that's going to happen to a minimum of 25% of our patients. My last concern is this was done, and I think it was in Kansas City years ago, where they were having pharmacists ship in drugs from this. And I'm not saying insurance companies and everybody else is dishonest, But when money's involved, things happen. There was a pharmacist there that was diluting their tax all, I think, by 50%. And a doctor noticed that, hey, my patients aren't doing well. And they found out that a third party who was delivering drugs was diluting that drug and charging the same amount. And that is something that is also very scary. So I think this bill is very thoughtful. I think it was well crafted. I think it prioritizes patient safety number one, patient cost number two. I think prohibiting insurer and PBM-mandated white bagging for physician-administered medications, and this bill restores appropriate clinical control to health care providers and safeguards vulnerable patients receiving life-sustaining therapies. I just want to thank everyone for their time and for hearing about this and this hearing, and if I can answer any questions, I'll be more than happy to.
Thank you very much, Doctor, for your testimony this morning. Do we have any questions from the committee?
Ranking Member Hall. Thank you, Chair. Thank you, Dr. Drosick, for joining us today. I just have a couple of what I think are clarifying questions. My first question is, with regard to white bagging, can you talk about the reimbursement differential between a drug that you procure versus a drug that the insurer sends you via white bagging? Is there a difference?
through the chair to the representative, what I have been told by one of the insurance companies is that we get the drugs cheaper because now you're changing hands again. There's another cost markup. Our drug prices are negotiated. It's not like we say, hey, I want to charge $100 for this drug. That's already pre-negotiated with the insurance company. And then it's also mandated with how we get paid through Medicare and things like that. So this is not only going to cost cut.
Follow up? I'm sorry. Let me ask a question a different way. Can you speak to the difference in margin, your margin versus when you procure the drug directly versus when the insurance company procures the drug? What's the margin differential for you?
Through the chair to the representative. As an oncologist. Are you asking us whether we make money on selling the drugs? Is that what you're asking? Yeah, sure. I'm asking what the margin is. Yeah, yeah. Sorry, because I'm not a mathematician. Our margin is set by the federal government. It's usually about 6%, but some drugs, we're actually underwater. Okay. We have drugs that we actually lose money on. I can probably give you quite a bit list. We do get a small infusion fee, but it doesn't cover it. Gotcha, gotcha.
Follow-up? Yeah. so in your patient example that you gave earlier you talked about when the drug arrives via the white bagging process that sometimes there's been a change in the patient's status right their weight may have changed right and you talked about but however you contrasted it with when you all order medication and you say well listen we've ordered it so we've been able to more appropriately match it to the patient I guess my question though was you talked about even in your process how that drugs being ordered sometimes a week in advance, right? So what do you do in the situations where in that intervening week, the patient status has changed, right? And before we answer that, you know, when the insurer is sending you the medication,
are they sending the medication to you further out than two weeks? So are you getting it three weeks in advance versus a week in advance when you order it? Many of those you can't store that far in advance. And we actually keep drugs on stock, but we try to project what we'll need. and then we can dose adjust them from our stock. When they come pre-dosed, there's no way that's cost effective because of the amount of waste it will have. One more, one more.
I'm sorry, one more. He says one more, Doc. One more, one more. So can you describe that? So I guess the other thing I'm trying to wrap my head around is process. And by the way, I appreciate you answering my questions, by the way. I try. How does the process differ? So you order medications versus the insurer sends you medications. From a supply chain standpoint or chain of command standpoint, as you put it, chain of custody standpoint, how does that process differ? So you order from your supplier, insurer orders, has their PBM, or social pharmacy, sends you the drug. How does that process differ?
Sure. Through the chair to the representative, twofold. One, it puts another layer of management in the drug, which means another layer of potential error. Where we get our drugs directly from the supplier, this will go through the insurance company and then to us, more than likely in their own stock, because that's how they do with their PBMs, right? They don't ship directly from the supplier. That's one. The other nightmare with that, going along to what you're saying, can you imagine I have my stock of drugs that is OHC-owned, versus now I've got OHC-owned, Humana-owned, Anthem-owned, every other insurance company, Medical Mutual of Ohio, trying to keep all that straight in your back room. That's another potential source of error with that. But the real big thing with that is, one, is just the dose adjustments are just nonstop. Okay. I know any other questions?
Yes. Vice Chair Craig.
Thank you, Chairman, and thank you, Doctor, for being here. Appreciate your advocacy on this bill. Just to kind of continue the line of questioning that the ranking member is trying to, just to help clarify some things, are you guys a 340B eligible entity?
No, ma'am. We are the most cost-effective system in the state. Sure.
Follow-up, Chair? Yes. So with that, would you say your reimbursement, you know, your contracted rates, You have to have contracted rates with the insurers already on these drugs. And would you say you're pretty much the Medicare reimbursement tends to be the actual sale price plus about 6 percent? I think you said your margins are about 6 percent. So would that be a fair statement or I guess clarify a little bit on that?
Yes, through the chair to the representative, that is actually correct. Okay.
One separate question. And I guess, obviously, we're going to continue to hear concerns about controlling drug costs and making sure that, you know, we're not pushing back into this, the cost of the health care system. And generally, you know, that's always the concern. but can you talk about the value of patient care and how sometimes when we're addressing some of these issues, we have to look at the overall mechanism in which these services are offered and just kind of elaborate a little bit more on how we're improving the value of patient care here.
Through the chair to the representative, that's a really question, is looking at the big picture, and I think that's one of the things you're getting at also. Hospitals charge for the same services we do two to three times as much. They get a room fee just for walking into the room. They get a fee for use of pharmacy, even if they're not using the pharmacy. These are all tacked on. That's why their profit is so much higher than ours. That's why doctors are running to the hospital, because they can offer higher salaries with things like that, which is running up your cost. And that's how I can easily say we're the most cost effective. When you look at the big picture, if you put us out of business and other groups like ours in the state of Ohio or in the country, your health care costs are going to go way up. And if we don't protect things like this, again, patient safety is number one, but patient cost is number two, you're not going to see independent physicians. You're just going to see a rise in your health care costs. It's exactly opposite of what the opponents are telling you.
Okay. Follow up? Thank you.
Doc, I want to ask one. You said around 25% of your patients will have a scenario where they've come in, their weight has changed, the other items change, and now you have to make a dose adjustment. So when that happens and that on-the-shelf insurance drug has to now be discarded because it's now inappropriate for that patient, who paid for that?
Well, in our office, we don't charge patients for that because we're not using it. But the insurance company will end up eating that.
And what do you think that will happen to premiums when they start eating 25% of their drug costs or their drug acquisitions?
That will go up in a premium. That's going to be passed on to the consumer.
Thank you.
Any additional questions from committee? All right, seeing none, thank you very much for your testimony this morning.
Thank you very much.
Appreciate you coming here.
And if anybody has any other questions, I'll be more than happy to answer them. It's david.drosick at U.S. Oncology, and you're welcome to send me an email.
All right, thank you very much. Our next person testifying is Marlo Blazer. Welcome to committee. The floor is yours.
Thank you. This is my first time here, so I appreciate getting out to see everybody else do it first so that I know the formality. Thank you, Chairman Lampton, Vice Chair Craig, Ranking Member Hall, and members of the Insurance Committee. Thank you for the opportunity to provide testimony on House Bill 682. I'm Marlo Blazer. I am a board-certified oncology pharmacist. I serve as the Executive Director of Clinical Strategy and Senior Director of Pharmacy Services for a physician-owned independent practice in Columbus, Columbus Oncology and Hematology Associates. I've spent more than 20 years working in oncology pharmacy, including more than a decade providing direct patient care as a clinical oncology pharmacist. In my current role, I oversee the pharmacy services across multiple infusion sites, and a medically integrated pharmacy that works closely with our oncology care team. Every day I see firsthand how important timely access to cancer medications are for our patients who are facing life-threatening illnesses and emotionally difficult treatment decisions. Unfortunately, the practice known as white-bagging increasingly interferes with that care. And again, you've heard already, white-bagging occurs when an insurance plan or a pharmacy benefits manager requires that the medication be dispensed by a designated external specialty pharmacy, oftentimes, quite frankly, owned by the insurance company, and shipped directly to the physician's office for administration rather than allowing the medication to be safely procured and managed by the treating practice. While this process appears maybe, you know, outwardly as administratively convenient from a payer perspective, the reality for us in oncology practice is very different. white bagging creates significant risks, inefficiencies, and treatment delays that directly affect our cancer patients. When I first joined the practice at Columbus Oncology, I reviewed our white bag policy. And quite frankly, we just didn't have the administrative time and effort to fight it. So we did have some white bagging that was going on at the time. And when I went in to do our first inventory there was about worth of medication sitting on our shelves that was no longer needed due to the disease progression or toxicity that required dose reductions that were white medications that payers had already covered patients had already paid their co for but the patients couldn use that we just simply had to throw away When that happened given the stricter Drug Supply Chain Security Act regulations the increasing rigor of USP 800 which regulates how we mix parenteral medications in a hazardous environment for our patients, we implemented a strict policy prohibiting white bagging for any medication that must be compounded for parental use in our practice. Along with what the good a doctor set up here, you know, cancer treatments are dynamic. We have lab results, toxicities, patient conditions, and if you look across all studies on oncology, it's actually upwards of around 80 percent that patients need an interruption or dose reduction, a dose modification, and these happen while the patient's being evaluated by the physician shortly before administration. So when drugs are white-bagged, the medication can't be easily modified or replaced to affect these real-time clinical decisions. This often leads to canceled or delayed treatments. For a cancer patient who has arranged transportation, taken time off work, mentally prepared for therapy, these delays can be devastating. Further, this practice negatively impacts value-based care arrangements, where our practice works collaboratively with payers to improve care while reducing costs, namely by avoiding extra visits, avoiding escalation to higher cost-of-care sites, such as ER visits. We have an acute care visit team that if patients need to be seen, we'd rather them be seen by us rather than sending them to the ER or a higher cost of care site. And avoiding waste and unnecessary treatment. This practice, given the risk of delay and receipt of the medication and our office having no control over the condition in which the medication may be received, creates both undue risk of waste as well as risk of adverse events that can lead to escalation of care. Additionally, white bagging undermines critical safety controls that oncology practices have developed over many years. When medications are procured through the practice, they are stored, handled, verified, and prepped according to strict safety and quality standards overseen by trained oncology pharmacy teams. With white bagging, we lose that control over the supply chain, temperature monitoring, product integrity, and custody of the medication until it arrives at our clinic. Equally concerning, and I mentioned before, is the financial waste created by white bagging. If a patient's treatment changes after the medication has shipped, the drug cannot be returned or used for another patient because it's specifically dispensed for that one individual. That results in thousands of dollars of medications potentially being discarded, costs that ultimately contribute to higher health care spending. White bagging also fragments care. Oncology treatment works best when the pharmacists, the physicians, the nurses, the financial navigators operate as a coordinated team. Medically interrated pharmacies within oncology practices are designated specifically to support the team-based model of care. When an external pharmacy is inserted into that process, the communication gap occurs and coordination suffers. House Bill 682 helps address these concerns by protecting the ability of physicians and oncology pharmacists to obtain and manage medications through the medically integrated systems that are designed to support safe, efficient cancer care. The bill ensures that treatment decisions remain centered on clinical judgment and patient needs rather than payer-driven distribution mandates. As someone who has dedicated my career to oncology, pharmacy, and the care of oncology patients, I believe strongly that patients should receive their medications through the systems that support safety, coordination, and timely treatment. For cancer patients, time matters, safety matters, care coordination matters. House Bill 682 helps preserve those principles. Thank you for your time, and I'll take any questions.
Thank you very much for your testimony this morning. Do we have any questions from committee? Ranking Member Hall.
Thank you, Chair. Dr. Blazer, it's good to see you again. And I love what you said in your testimony. I think the winning argument here is the impact on value-based care, right, which is what we're, you know, higher quality and lower cost for our patients, right? So, and I also don't want my comments to be misconstrued here today that I'm some huge advocate of white bagging. But I do feel compelled to be fair in the questioning, right?
Absolutely.
So I do have one remaining question that I hope to ask you. It's really the patient cost component of it, right? So we talked earlier, I think Dr. Drosser talked about cost being passed on to the patient. could a could an insurer make an argument that they're procuring the drug even with the waste that we talk about in the drug that they're still at large procuring the drug at a much lower cost than what it would cost you all to procure it and therefore the cost is lower to the patient because they're procuring it for so much less you know my apologies through the chair
thank you for the question I think it is a short game argument in that they may be able to say that. And let's be honest, a lot of the specialty pharmacies that the payers mandate we white bag through, the payer actually owns the pharmacy. And so they are paying themselves to provide the care, right? But at the end of the day, we do, on our level, the patient gets an estimate of what their cost is going to be before they start any therapy with us. And if they raise any white flags whatsoever, we start fundraising or fund finding for that patient instantaneously. And in fact, I would guess somewhere around 50% to 75% of our patients receive some sort of funds through PAN Fund Foundations when we can help them with that or co-pay cards if we can help them with that. We'll do whatever we can to support that patient from a financial risk standpoint. But the long game is that if we cannot participate as an independent practice in the value-based care for that patient, independent practices are becoming few and far between. And what you're going to see is vertical integration into hospital systems or PE-backed sort of scenarios. And we know that if you look at independent practice for the first four quarters leading into an acquisition and then the four quarters following an acquisition, costs go through the roof post-acquisition. And so in the long game, supporting independent practice and being able to provide care for the patients at the bedside will ultimately be the way that we can support care long term in a total cost of care lowering effect.
Follow up?
Good. Okay. Any other questions from committee? All right. Seeing none, thank you very much for your testimony this morning.
Thank you very much.
And we now have Dana Zager. Welcome to committee.
Thank you very much.
The floor is yours.
Thank you. Chairman Lampton, Vice Chair Craig, Ranking Member Hall, and members of the committee, thank you for the opportunity to testify today in support of House Bill 682. My name is Dana Zager. I'm an oncology social worker at the Zangmeister Cancer Center. I've worked in mental health, oncology, hospice, and end-of-life care for more than 30 years. Hard to believe. Every day, I help patients and families navigate the emotional, financial, and logistical challenges that come with a cancer diagnosis. While physicians and pharmacists focus on the medical treatment plan, My role is to help patients manage everything else that cancer brings into their lives. Fear, uncertainty, transportation issues, work disruptions, family responsibilities, and the emotional toll that comes with serious illness. One of the most difficult situations I encounter with patients involves treatment delays, and increasingly those delays are caused by a practice known as white bagging. White bagging, as you've heard about today, occurs when an insurance plan requires a cancer drug to be shipped from an outside specialty pharmacy directly to the physician's office instead of allowing the clinic to obtain and prepare the medication itself. While this may seem like a technical or administrative issue, from a patient perspective, it can create significant stress and disruption. Many of the patients I work with are already overwhelmed. They may be coping with a new diagnosis, managing side effects, trying to continue working, coordinating care for their families. They arrange rides to treatment, take time off of their jobs, and mentally prepare themselves for what can be a very difficult day. When they arrive at a clinic only to learn that their medication has not arrived or there is a problem with the shipment, the emotional impact is significant. Patients often feel frustrated, anxious, and sometimes fearful that their cancer treatment is being delayed for reasons outside of their control. I've had patients break down in tears after learning their treatment needs to be rescheduled because a medication was not delivered on time or could not be used. These delays can mean rearranging transportation yet again, taking additional time off work, or asking family members to step in once more to assist. For some patients, particularly those who are alone, who already struggle with transportation or financial challenges, these disruptions create real barriers to continuation of care. Cancer treatment is not just about the medication. It is about the entire support system around the patient. In community cancer centers, our teams work closely together to coordinate care so that patients can receive their treatment as smoothly and safely as possible. Whitebagging disrupts this coordination. When an outside pharmacy controls the medication supply, the care team has less flexibility to respond to the patient's needs and less ability to prevent delays that can cause significant stress. From my perspective as a social worker, what matters most is helping patients maintain stability and confidence during a very uncertain time in their lives. Policies that create additional obstacles to treatment only add to the emotional burden patients are already carrying. House Bill 682 helps protect the ability of cancer care teams to manage medications within the clinical setting where the patient is receiving the care. This support is crucial. It is able to allow for more reliable treating schedules, help in reduction of stress and confusion that the patients experience when these delays occur. Cancer patients already have enough to worry about. We should be doing everything we can to make their care more coordinated, more predictable, and more compassionate. Thank you for your time today and for considering this important legislation. I'm now happy to answer any questions you may have.
Thank you very much for your testimony this morning. I appreciate the work that you do. Do we have any questions from the committee?
Yes. Thank you, Chair, and thank you for being here today. You talked about the delays. Presumably the majority are due to the clinical picture changing of the patient. Once they're rescheduled and they return, there's really no guarantees that their clinical picture hasn't changed again, correct? Or it could be multiple times. It could be infinitely changing. Is that what you're seeing in practice? The other concern, too, a question through the chair, is sometimes they don't come back. There's always risk that a patient has done everything they can to get to care. I may arrange treatment, transportation for them and other services. Some come from farther counties. They're coming, like, touching West Virginia. We have some coming even from out of state. That may then impact them to the point they don't come continuously. And that ultimately is a huge risk in their overall care and prognosis. Follow-up?
Any other questions? Well, once again, thank you very much for your testimony before committee. Do we have anyone else who wishes to testify as proponent before committee? Okay, seeing none, we also have some written testimony provided from the Worcester Community Hospital Health System as proponent, from Brian Hannon on behalf of the Healthcare Distribution Alliance as proponent, and finally from Monica Heckle on behalf of the Ohio State Medical Association as proponent. This will conclude our second hearing of House Bill 682. Do we have any further business before committee? Seeing none, we are adjourned.