Oregon Hospital Price Ceilings Reduce Plan And Patient Costs But Could Increase Utilization
A good article discussing Oregon’s law capping maximum in-network hospital payments to 200% of Medicare and out-of-network prices at 185% at 24 urban hospitals. These are modest reforms, but good ones. They tie to my recent blog on center-left think tank Third Way finding commercial prices can come down and hospitals can make a profit (blog here: https://www.healthcarelabyrinth.com/the-truth-about-hospital-costs-and-payments/ ).
One study of the Oregon experience thus far found health plan savings of $108 million in the first 27 months. A second study finds reduced out-of-pocket costs for patients of 9.5% or about $800,000 annually in the first 27 months. The law began in October 2019.
There is some evidence that the lower hospital costs drove some utilization. A 4.8% uptick in outpatient procedures per enrollee per year was registered. But in my view, this could be good consumption as well that leads to long-term savings. The added utilization cost about $4.6 million annually – so savings was still big.
#hospitals #healthcare #or
Saga Of Medicare Advantage Overpayments And Risk Adjustment Abuse
Interesting article about a long-standing lawsuit that pits a whistleblower and the Centers for Medicare and Medicaid Services (CMS) against United Healthcare. Latest deposition materials released in the case show that CMS does react to industry political pressure and that it dropped a proposed change in 2014 regarding manual chart reviews in Medicare Advantage (MA). It would have required that the manual process for risk adjustment was not the exclusive avenue for codes qualifying for additional reimbursement. I have proposed that this be a reform that is adopted to make the overall system fairer. The article goes on to put the MA overpayment and risk adjustment debate in good perspective.
In a related article, former Kaiser Permanente CEO George Halverson does his usual good job of beating down MA opponents’ overpayment charges on overpayments and showing how MA saves against traditional fee-for-service (FFS). He also correctly notes that the new risk adjustment model being phased in from 2024 to 2026 will better ensure correct coding and reduce any overpayments. I respect George a great deal but differ a little. I do think there are opportunities for bad players to continue to abuse risk adjustment and receive overpayments. Again, I have called for eliminating manual chart reviews and health risk assessments as the sole source for a qualifying diagnosis.
Additional article: https://thehealthcareblog.com/blog/2024/08/27/fake-news-from-medpac-on-medicare-advantage-needs-to-be-corrected-pt-1/
#medicareadvantage #riskadjustment #radv #overpayments
Eli Lilly Reducing GLP-1 Costs Through Direct Sales Program
Eli Lilly is reducing the costs of its GLP-1 weight-loss drug Zepbound by selling the drug direct to consumer at a cost of less than half of retail $about $400). The catch: the drug is only available as vials requiring syringes vs. auto-injection. The vials are easier to manufacture. The vial program is part of Lilly’s effort to address shortages for the drug and its sister, Mounjaro (targeted to diabetes). Because of shortages of GLP-1s, compound pharmacies can offer compound versions. That could change if shortages are addressed across companies. On a related note, Pfizer is launching a direct-to-consumer program for migraine, COVID-19 and flu treatments.
Additional articles: https://insidehealthpolicy.com/daily-news/lilly-hopes-stop-counterfeit-zepbound-stem-shortages-selling-discounted-vials-online and https://thehill.com/policy/healthcare/4849762-eli-lilly-lowers-zepbound-prices/ and https://www.healthcaredive.com/news/pfizer-direct-to-consumer-telehealth-migraine-covid-flu/725376/
(Some articles may require a subscription.)
#weightlossdrugs #drugpricing
State Prior Authorization Laws Continuing
According to a National Conference of State Legislatures database, twenty-three states have enacted more than forty-three bills related to prior authorization (PA) in the last few years. They have various levels of rigor. Eighteen have been enacted in 2024. Much of this is being driven by an aggressive lobbying campaign at the state level by provider lobbies as well as frustration over a lack of federal reforms. The American Medical Association says ten states have passed PA bills it endorsed. Remember that state PA laws cannot govern certain lines of business governed at the federal level.
Additional article: https://insidehealthpolicy.com/daily-news/ama-drives-prior-authorization-reform-10-states-eyes-federal-action-next
(Articles may require a subscription.)
#priorauthorization #healthplans #providers
Express Scripts To Remove Humira From Formularies In Favor Of Biosimilars
Express Scripts, Cigna’s pharmacy benefits manager (PBM) has removed brand Humira from its formularies in favor of several biosimilar alternatives. A new Humira biosimilar is available at $0 for patients of Cigna’s Accredo Specialty Pharmacy. Express Scripts is the second major PBM to replace Humira. CVS Caremark also did so.
The move offers hope that more biosimilars will be adopted.
#biosimilars #drugpricing #branddrugmakers
https://www.beckerspayer.com/policy-updates/cigna-to-remove-humira-from-most-formularies.html
— Marc S. Ryan
