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CMS Suspends Agents Operating On The Exchange Enrollment Platform

The Centers for Medicare and Medicaid Services (CMS) has suspended 450 agents and brokers from selling products through healthcare.gov, which enrolls the uninsured in the Exchange program. The move was one in a number of reforms to stop illegal switching of enrollees and fraudulent enrollments.

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#exchanges #aca #obamacare #marketing #fwa

https://insidehealthpolicy.com/daily-news/cciio-suspends-450-agents-brokers-selling-through-healthcaregov

Fallout From Part D Legislation Remains

The fallout from the major reductions in out-of-pocket (OOP) costs and transfer of liability to Part D plans in the Inflation Reduction Act (IRA) continues. The Centers for Medicare and Medicaid Services (CMS) saw massive increases in standalone Part D plans when bids for 2025 were submitted by insurers and the agency quickly created what I think is an extra-legal special subsidy program to limit premium increases in the program. The changes also impact Medicare Advantage (MA) and will contribute to cuts and premium increases there as well for 2025. The GOP in Congress has asked the congressional Government Accountability Office (GAO) to investigate and now is asking the Congressional Budget Office (CBO) what costs will be.

I will have a special blog on this next week. My previous blogs on this are here:  https://www.healthcarelabyrinth.com/will-democrats-be-victim-of-an-october-surprise-of-their-own-making/ and https://www.healthcarelabyrinth.com/part-d-premium-woes-due-to-the-inflation-reduction-act/ .

I have argued that while the program set up by CMS will mitigate some but not all of the hefty premium increases in 2025, the Part D changes in IRA could literally make the standalone PDP program unsustainable over time. The program is only for three years and the massive cost-shift is permanent. It is an example of the perils of hasty political legislation. Democrats passed the changes and quickly took credit for lowering and capping Medicare enrollees’ drug costs. But they did not think about the huge impacts of moving costs to insurers – the changes were not adequately funded by the government. What’s more, the sheer richness of the changes will create major inflation for insurers over time, too.

Another fallout we are already seeing beyond premium hikes: a major Part D sponsor, Centene, is dropping all commissions in its Part D products. Some of this could be a push by the insurer to move people to Medicare Advantage (MA), but most of it is the fact that the already narrow-margin standalone Part D program has become even less profitable with the changes. Centene may have had no choice but to stop commissions. Others likely will follow suit in the future.

Of course, a major broker and agent group is upset and I cannot blame them, but it does not change the financial realities. They are right that beneficiaries will be hurt by a lack of support in the program.

Ironically, the drumbeat about the wonderful benefits of the changes continues. The nation’s biggest senior advocate, AARP, commissioned a study that found that more than a million U.S. seniors will save $1,100 in prescription drug costs every year under a provision due to the $2,000 OOP cap. But there is absolutely no mention of the negatives that the poorly-thought-out legislation will have — premium hikes and less plan choice for tens of millions. AARP either does not understand what is going on or is acting politically here. Either way, shame on the organization.

Additional articles: https://www.fiercehealthcare.com/payers/payer-roundup-devoted-health-raises-112m-la-care-eliminates-prior-auth-codes and https://insurancenewsnet.com/innarticle/agents-fight-for-part-d-commissions and https://www.modernhealthcare.com/insurance/centene-broker-commissions-medicare-part-d-plans-2025 and https://thehill.com/policy/healthcare/4852482-prescription-drug-cost-savings/ and https://www.aarp.org/content/dam/aarp/ppi/topics/health/prescription-drugs/new-medicare-part-d-out-of-pocket-spending-cap-important-improvement-for-enrollees-facing-high-prescription-drug-costs.doi.10.26419-2fppi.00335.001.pdf

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#partd #pdp #medicareadvantage #ira #cms #marketing #agents #brokers

https://insidehealthpolicy.com/daily-news/republicans-ask-cbo-budgetary-impact-part-d-premium-demo

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

https://www.fiercehealthcare.com/regulatory/oregons-hospital-price-cap-policy-cut-patients-out-pocket-costs-bumped-utilization

Biden Administration Announces Exchange Navigator Grants

The Centers for Medicare and Medicaid Services (CMS) announced navigator grants totaling $100 million to forty-four organizations to aid in enrollment in the Exchanges. The agency will distribute up to $500 million over the next five years. The organizations are in twenty-eight states with federally facilitated marketplaces.

CMS Press Release: https://www.cms.gov/newsroom/press-releases/biden-harris-administration-awards-100-million-navigators-who-will-help-millions-americans

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#aca #exchanges #obamacare #marketing

https://www.modernhealthcare.com/policy/insurance-navigators-grants-cms-open-enrollment-2024

Healthcare Services Company Evolent Health Could be Sold; United Healthcare Could Acquire Surgery Group

Evolent Health, a company that offers software and clinical solutions to providers and health plans, could be acquired by either a private equity firm or Elevance Health. In other news, Surgery Partners, a major surgery center, urgent care, and provider group, could be sold to United Healthcare.

Additional article: https://www.modernhealthcare.com/mergers-acquisitions/tpg-unitedhealth-group-surgery-partners

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#manda #acquisitions #consolidations #healthcare #unitedhealthcare

https://www.fiercehealthcare.com/payers/evolent-health-considers-sale-pe-stock-price-leaps

Big Pharma’s Verbal Gymnastics On Drug Price Negotiations

I found this article worthy of top billing tonight due to the laughter I get from hearing Big Pharma talking out of both sides of its mouth. As we know, brand drug makers lobbied hard against the passage of the Inflation Reduction Act’s (IRA) Medicare drug price negotiations and have filed numerous lawsuits to stop it (all without success so far). Brand drug makers argued passage would cripple innovation and the drug industry. Since that time, the first ten drug prices have been set and brand companies have been arguing to their investors that the IRA will not have negative impacts on long-term margins.

With the possibility of Democrats again winning both houses of Congress and the White House, Big Pharma is in panic mode due to commitments by Democrats to expand Medicare drug price negotiations. In comes the brand pharmaceutical lobby, PhRMA, which is now arguing that recent statements by some drug companies that the drug prices will not impact long-term financials doesn’t mean the law won’t hinder the potential for innovation. This led to questions about whether drug maker CEOs were being honest with investors, which forced PhRMA to clarify that the email declaring concerns was not intended as a formal response to the CEOs.

PhRMA still insists that companies are not taking on new development or finishing development for certain types of drugs because of the law. PhRMA points to a few studies to back up its points. But there is really little evidence thus far to suggest this overall.

The verbal gymnastics by PhRMA is comical.

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#ira #branddrugmakers #drugpricing

https://insidehealthpolicy.com/inside-drug-pricing-daily-news/phrma-ceos-statements-downplaying-effect-negotiated-prices-are-not

S&P Sings The Blues Of Hospitals – But Here Is the Other Side Of The Story

Financial firm and rater S & P Global is bemoaning the potential impact of Medicare Advantage (MA) on hospitals. It says in a new report that extended utilization increases could force MA plans to further rein in payments to providers. It also notes that the further expansion of MA hurts hospitals and providers too due to prior authorization (PA) and claims payment delays and practices. Thus, provider margins will be under pressure. And while the provider lobbies got a huge win when the Centers for Medicare and Medicaid Services (CMS) directed MA plans to follow traditional inpatient admission rules, S & P says MA plans could seek to recoup the costs with further restrictions.

I do not take issue with S &P’s assessment per se, but there was another report recently that I found very interesting. A Third Way report suggests that more than half of hospitals make money on Medicare and one-third make money on Medicaid. Thus, it is a myth that hospitals cannot make money on government programs at current rates. It is more an issue of hospital bloat and not using revenue effectively. Hospitals need to reform. The bloat allows hospitals to demand obscene rates from the commercial sector – supposedly to make ends meet.

Hospitals have lived off of the excess and unaccountability of the traditional Medicare program, with no prior authorization or utilization controls. I will go into great detail on this in a blog next week.

And while S & P sings the blues of the hospitals, Modern Healthcare had a good article today about all the pressures faced by MA, some caused by the industry and others by outside forces.  They include:

• The new PA restrictions from CMS.
• The new risk adjustment formula phase-in from CMS.
• The rise of utilization post COVID.
• Contentious payer-provider relationships, where hospitals could term MA plans.
• Major pharmacy trends.
• The cyberattack fallout.

Third Way Report: https://www.thirdway.org/report/tale-of-two-hospitals-why-some-hospitals-succeed-and-others-do-not

Additional article: https://www.modernhealthcare.com/insurance/medicare-advantage-costs-rising-factors

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#medicareadvantage #hospitals #medicare #medicaid

https://www.fiercehealthcare.com/providers/medicare-advantages-growth-bad-omen-hospitals-sp-global-warns