With help from Victoria Colliver (@vcolliver), Rachana Pradhan (@RachanaDixit) and Renuka Rayasam (@RenuRayasam)

Rep. Michelle Lujan Grisham, the leading Democratic candidate for governor in New Mexico, profited from the state’s use of a health-insurance program for seriously ill patients, even after Obamacare made such programs virtually obsolete, POLITICO’s Rachana Pradhan reports.

What happened: A consulting firm co-founded by Lujan Grisham and Debbie Armstrong, a close political ally and treasurer of her gubernatorial campaign, was paid more than $2 million in fees between 2014 and 2017 to run the program, according to contracts POLITICO obtained through a public records request.

Lujan Grisham sold her 50 percent ownership stake in the company — the Delta Consulting Group, which counts other health organizations and a group with ties to Democratic politics as clients — last year, allowing her to reap thousands of dollars in dividends from the company even after she was elected to Congress.

For context: New Mexico kept its high-risk pool open even as most states have closed their programs completely. New Mexico’s Democrats have staunchly defended their state’s high-risk pool, in part because they say it could protect the state’s small Obamacare market by not loading too many high-cost patients onto it.

Keep reading: More.

CANCER PRACTICES SUE TO STOP MEDICARE SEQUESTER CUTS — The Community Oncology Alliance’s complaint against the Trump administration alleges that a mandatory 2 percent pay cut for drugs is causing cancer practices to shutter or be sold.

The cancer practices, which are seeking an immediate injunction, argue that federal law requires office-administered drugs, including chemotherapy, be paid at average sales price plus 6 percent, and Congress in 2011 did not expressly state that Medicare’s 2 percent sequester apply to drugs. COA says roughly 135 independent cancer clinics have closed their doors, and another 190 clinics have been acquired by hospitals since the sequester began in 2013.

— Background on the sequester: Congress in the 2011 Budget Control Act mandated a 2 percent across-the-board cut in Medicare payments — a cut that’s been extended four times, most recently through fiscal 2027. The Obama administration decided to apply the sequester to some drugs delivered under Medicare Part B, a move that prompted complaints from 124 members of Congress in an April 2014 letter.

— Related letter to Azar: The cancer clinics sent a letter to HHS Secretary Alex Azar Wednesday arguing that proposed Medicare Part B changes in the Trump administration blueprint on drug prices would hurt cancer patients. “Filing this lawsuit was a last resort after numerous meetings, discussions, and letters to HHS and OMB that went nowhere,” Ted Okon, executive director of COA, said in a release.

— There’s been a long-running fight about cancer clinic margins: Before the sequester took effect, patient advocates and economists raised questions about physicians unduly profiting from cancer drugs they administer. Meanwhile, oncology clinics have sounded the alarm as hospital outpatient centers have taken their market share.

PHYSICIAN GROUPS CALL ON IMMIGRATION SERVICES: LET FOREIGN DOCTORS IN — A letter from multiple physician groups, including the American Academy of Family Physicians and the American Academy of Pediatrics, says that the Trump administration should stop slow-walking or denying visa applications from foreign doctors.

The physician groups allege that U.S. Citizenship and Immigration Services is taking a harsher approach than in previous years to vetting the H-1B visa applications of non-U.S. international medical graduates who have been accepted at residency programs, leading some to be denied. That’s a significant concern given the looming start of residencies, many on July 1.

“We hope you can reach an appropriate balance that allows non-U.S. IMGs to contribute to U.S. healthcare service needs without subjecting them to unnecessary delays in the absence of specific and credible evidence,” the physician groups write. Read Wednesday’s letter.

A spokesman for USCIS told PULSE that the agency doesn’t comment on correspondence from outside groups.

** A message from the American Clinical Laboratory Association: Millions of seniors who depend on lab tests to manage their health are facing reductions in access to Medicare lab testing because of HHS’ flawed implementation of the Protecting Access to Medicare Act (PAMA). HHS is putting the nation’s most vulnerable seniors at risk. It’s time for Congress to act. Learn More. **

MEDICAID EXPANSION IS A GO IN VIRGINIA — Both chambers of the Virginia Legislature moved a budget bill Wednesday that would expand Medicaid through the ACA, seemingly putting an end to years of partisan battles. The bill would make Virginia the 33rd state to expand Medicaid under Obamacare and could lead to as many as 400,000 people being newly covered.

“As a doctor, I’m so proud of the significant step we’ve taken together to help Virginians get quality, affordable care,” Gov. Ralph Northam, a Democrat, said in an evening statement.

… Trump administration officials and conservative activists had tried to derail the Virginia plan. White House budget director Mick Mulvaney in March urged the state to reject Medicaid expansion, and White House health care aide Brian Blase joined phone calls with Americans for Prosperity as the Koch brothers-supported group tried to rally opposition. Former Sen. Rick Santorum, who is pushing for another Obamacare repeal vote in Congress this summer, was spotted in the Virginia Statehouse before the vote to brief Republicans,…

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