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Paragon Says DOGE Could Save $2.1 Trillion In Healthcare

Donald Trump has created the informal Department of Government Efficiency (DOGE) to reduce the size of government. He is also looking for budget cuts to help pay for extension of his 2017 tax cuts. As such, healthcare spending cuts are anticipated. Trump is chummy with certain conservative healthcare policy groups, including the Paragon Health Institute. Paragon has put together some possible healthcare cuts amounting to $2.1 trillion in savings over a decade. The possible reductions include the following. While Trump has said he will preserve Medicare, some Medicare cuts are below.

  • Limiting state federal matching in Medicaid
  • Eliminating the provider tax safe harbor in Medicaid
  • Medicaid work requirements
  • Rescinding certain Biden Medicaid rules
  • Limiting Medigap cost-sharing amounts to reduce spending in Medicare
  • Reducing the very high Medicaid admin cost reimbursement
  • Passing site neutral policies for Medicare
  • Expanding Medicare Advantage
  • Eliminating Medicare bad debt reimbursement and reforming uncompensated care
  • Reforming the 340B program
  • Ending the enhanced Exchange premium subsidies
  • Capping employer healthcare tax deductibility

The proposals are not a radical reform of current healthcare programs, but would remove a great deal of funding, shift costs to states and citizens, and mean reduced coverage overall. Some proposals, such as site neutral payments and certain Medicaid and Medicare abusive hospital funding practices, are tremendous ideas.

As well, the Kaiser Family Foundation (KFF) has issued a new brief discussing Affordable Care Act (ACA) and Medicaid issues. It finds that of the 41 states and the District of Columbia that expanded Medicaid under the ACA, 21 states went to Trump and 20 states went to Harris. The ten states that are holdouts on expansion are all red, except Wisconsin (which supported Trump as well). I have calculated that about three-quarters of the over 21 million Exchange enrollment are in states that are Red or Trump won in 2024.

KFF also notes that many are talking about reducing Medicaid expansion funding to regular reimbursement levels rather than repealing the ACA outright. There are 12 states that have a trigger law that rolls back Medicaid expansion if the 90% funding of the expansion population is removed at the federal level. That would impact 4.3 million of the 21 million nationwide covered under the expansion.

Additional article: https://www.kff.org/medicaid/issue-brief/medicaid-expansion-is-a-red-and-blue-state-issue/

(Some articles may require a subscription.)

#healthcare #trump #election2024 #healthcarereform #medicare #medicareadvantage #medicaid #aca #exchanges #obamacare

https://insidehealthpolicy.com/daily-news/paragon-doge-could-cut-21-trillion-medicaid-medicare-reforms

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New MA And Part D Rule Issued As Parting Policy Shot By Biden Administration

The Biden administration issued its draft 2026 Medicare Advantage (MA) and Part D rule today. A draft is available, but the Federal Register indicates the rule was pulled back for additional clarifications and would be reposted on December 10. Due to its late posting, the rule would not be finalized before the Trump administration takes office and therefore could simply be revamped rather than be rescinded.

In some ways, the rule does not have some of the mega changes that some expected in the areas of Star, risk adjustment, and more. This could be due to some sensitivity to the current financial woes of the MA industry. But there is plenty for the industry to object to. I have not done a thorough read yet of the 700-plus page draft rule, but I will do so over the Thanksgiving holiday weekend. I will publish a few blogs next week.

Here are some of the key changes based on the Centers for Medicare and Medicaid Services (CMS) press release, fact sheet, and my perusal of the rule thus far.

GLP-1 coverage: CMS is proposing to reinterpret the existing Part D statute to no longer exclude anti-obesity medications for the treatment of obesity from coverage under Medicare Part D and to require Medicaid programs to cover these medications when used to treat obesity. Today, the rule is interpreted to be available in Part D for those who are obese or overweight and have a qualifying disease state. The change would classify obesity as a disease state to enable coverage (those who are only overweight would not be covered). I will need to read the rule closer to see if this is mandatory coverage or the ability to cover. CMS uses the word “permit.”

Regardless, it would serve to further drive up premiums and costs in the programs. MA would be hurt, but standalone Part D (PDP) plans could be crippled over time. The administration is expected to make some GLP-1s subject to drug price negotiation, but that alone will not mitigate huge costs to the program. We know that price reductions in the negotiation process have not been terribly aggressive. Expanding Medicare coverage for GLP-1s likely will cost $35 billion over nine years, according to a Congressional Budget Office (CBO). CMS ridiculously argues there would be no short-term impact on premiums. CMS and the CBO famously said the Inflation Reduction Act’s Part D cost-sharing changes would not impact premiums, either. 

Prior authorization: For 2024, CMS included via rule major restrictions on the prior authorization process for MA plans by requiring them to follow fee-for-service program polices. Now, CMS is proposing further changes. CMS wants to define “internal coverage criteria” to clarify when MA plans can apply utilization management and prior authorization, ensure plan internal coverage policies are transparent and readily available to the public, ensure plans are making enrollees aware of appeals rights, and bar after-the-fact overturns of prior authorization that can negate payments. Additional gathering of data and reporting to examine prior authorization processes are included as well. The rule would also increase guardrails on the use of artificial intelligence (AI) to protect access to health services.

Marketing practices: Surprisingly, CMS is not seeking to reimplement the overturned rule barring extraordinary compensation to brokers that essentially steer members to certain plans. That was a great proposal. CMS instead is expanding oversight of MA advertisements and expanding what agents and brokers must discuss with potential enrollees.

Medical loss ratio changes: MA and Part D medical loss ratio (MLR) regulations will be changed to improve the meaningfulness and comparability of the MLR across plan contracts and align them with commercial and Medicaid requirements.

I will need to dig into this, but the rule would also require that provider incentive and bonus arrangements are tied to clinical or quality improvement standards in order to be included in the minimum MLR calculation. In addition, CMS will collect additional details regarding plan expenditures categorized by different provider payment arrangements, especially as it relates to vertically integrated organizations.

These provisions are a clear shot across the bow regarding intracompany arrangements between health plans and related entities to get around the minimum 85% MLR. It also would exclude administrative costs of quality-improving activities in the MLR calculation. The rule would also expand audit of MLRs.

Access to generics and biosimilars: In an effort to stop pharmacy benefits managers (PBMs) from favoring brand drugs due to the rebate arrangements with brand drug makers, the new rule would require plan formularies to provide enrollees with broad access to generics, biosimilars, and other lower-cost drugs. This will help with the uptake of biosimilars and likely help consumers at the point of sales as brand rebates often do not get passed through in part or full at the drug counter.

Star program changes: The rule includes various changes to Star measures and sets the road map for the future. I will have a separate blog soon on these important changes.

CMS Fact Sheet and Press Release: https://www.cms.gov/newsroom/fact-sheets/contract-year-2026-policy-and-technical-changes-medicare-advantage-program-medicare-prescription and https://www.cms.gov/newsroom/press-releases/biden-harris-administration-announces-medicare-advantage-and-medicare-part-d-prescription-drug

Additional articles: https://www.healthcaredive.com/news/medicare-medicaid-weight-loss-drug-coverage-rule-glp1-obesity/733994/ and https://www.modernhealthcare.com/policy/biden-rule-medicare-medicaid-coverage-ozempic-wegovy-mounjaro-zepbound-glp-1s and https://www.modernhealthcare.com/policy/medicare-advantage-proposal-prior-authorization-brokers-glp-1s-cms and https://insidehealthpolicy.com/daily-news/cms-ma-orgs-using-ai-must-ensure-equitable-access-services and https://thehill.com/policy/healthcare/5010254-biden-administration-proposes-obesity-drug-coverage-medicare-medicaid/ and https://www.medpagetoday.com/publichealthpolicy/medicare/113131 and https://www.beckerspayer.com/policy-updates/cms-pitches-major-medicare-advantage-changes-10-notes.html and https://www.kff.org/policy-watch/proposed-coverage-of-anti-obesity-drugs-in-medicare-and-medicaid-would-expand-access-to-millions-of-people-with-obesity/ and https://www.beckershospitalreview.com/glp-1s/glp-1s-411b-conundrum.html

(Some articles may require a subscription.)

#cms #regulations #medicareadvantage #partd #pdp #glp1s #weightlossdrugs #priorauthorization #marketing #minimummlr #generics #biosimilars #drugpricing #stars

https://www.fiercehealthcare.com/payers/biden-proposes-medicare-medicaid-cover-anti-obesity-drugs

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Media Attacking Trump Healthcare Picks As Contrarians

The mainstream media are busy attacking Donald Trump’s healthcare picks as public health and healthcare contrarians. They worry the administration could aim to set vaccine policy that is outside of the so-called mainstream.

So far, Trump has named the following to lead key agencies:

  • Robert F. Kennedy Jr. to lead the Department of Health and Human Services
  • Mehmet Oz to lead the Centers for Medicare and Medicaid Services
  • Dr. Mary Makary to lead the Food and Drug Administration
  • Dr. Dave Weldon to lead the Centers for Disease Control and Prevention
  • Janette Nesheiwat to be Surgeon General

The media are less concerned about Oz and Makary and most concerned with Kennedy and Weldon. Some of the criticism is unfair, especially toward Makary. During the COVID years, Makary stood out as a man of science and great educator, calling out the need for COVID vaccines for those most vulnerable to the virus but reasonably pushing back on COVID vaccine hysteria and other excesses.

Additional article: https://www.managedhealthcareexecutive.com/view/trump-names-picks-for-top-jobs-at-fda-and-cdc-and-also-surgeon-general

 (Article may require a subscription.)

#healthcare #trump #election2024 #hhs #cms #fda

https://www.modernhealthcare.com/politics-policy/donald-trump-health-nominees-vaccines-fda-marty-makary-cdc-dave-weldon

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CMS Loses Again In Court On Stars

A just released court decision gives the Centers for Medicare and Medicaid Services (CMS) yet another defeat on how the agency runs the Stars program.

Judge Jeremy Kernodle, of the U.S. District Court for the Eastern District of Texas, ruled CMS violated the Administrative Procedures Act of 1946 by improperly reviewing UnitedHealth Group’s health plan call center ratings.

The judge was rather biting in his assessment. He said that CMS creates the guidelines, identifies the phases, and specifies the criteria for the call center metrics. He concluded that the responsibility for any unreasonable or absurd outcomes therefore lies with the agency not plaintiffs. Other lawsuits have been filed by Humana, Centene and Elevance Health.

This could likely lead to recalculations for many plans, although it will not rise to the mass recalculation we saw in 2024.

CMS says it is looking to deprioritize the measures anyway. The lawsuit likely expedites such a sunset.

#cms #stars #medicareadvantage

https://www.fiercehealthcare.com/payers/trump-could-boost-medicare-advantage-cracks-suggest-reform-may-be-coming

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Commonwealth Study Covers The Underinsured

A very important study from The Commonwealth Fund found that close to a quarter of people who have health coverage are underinsured. This is consistent with other findings that put the number of uninsured and underinsured at about 85 million Americans. In essence, the underinsured are Americans that have coverage but, in many ways, have a hard time accessing the benefits due to high out-of-pocket costs. In my book, The Healthcare Labyrinth (available at this site), I discuss that affordable universal access is needed to address both the uninsured and underinsured crisis.

The Commonwealth Fund polled a national sample of adults aged 18 to 64 and found that 23% are underinsured. Most (about 66%) are in employer-sponsored health plans. About 14% were in individual or Exchange plans and 11% were in Medicaid. About 57% who were underinsured said they skipped care because of the cost. About 44% said they have medical debt.

With regard to Exchange coverage, if premium subsidy enhancements are not renewed as of 2026 annual premium costs for consumers will increase by an average of $705 a year and an estimated 4 million people could lose their coverage. A Kaiser Family Foundation (KFF) study confirms the premium change.

The Commonwealth study recommends a series of policies that could address healthcare affordability, including:

  • Fully expand Medicaid. There are 10 states that have yet to expand. In the interim, allow citizens access to the Exchanges.
  • Make the enhanced premium tax credits for the Exchanges permanent.
  • Bar medical debt from credit reports and reform hospital billing.
  • Lower deductibles and out-of-pocket expenses for Exchange plans.
  • Further expand continuous Medicaid coverage for 12 months.

Additional articles: https://www.modernhealthcare.com/insurance/aca-subsidies-extension-commonwealth-fund and https://www.kff.org/interactive/how-much-more-would-people-pay-in-premiums-if-the-acas-enhanced-subsidies-expired/

(Some articles may require a subscription.)

#uninsured #underinsured #coverage #healthcare #healthinsurance #exchanges #aca #obamacare #employercoverage

https://www.fiercehealthcare.com/regulatory/commonwealth-fund-many-enrolled-employer-plans-are-underinsured

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More on Mehmet Oz’s Healthcare Positions

President-elect Donald Trump’s nominee for the Centers for Medicare and Medicaid Services administrator, Mehmet Oz, has raised concerns with high insulin prices and the role of pharmacy benefit managers (PBMs). At the same time, he has not taken a position on Medicare drug price negotiations. He favors permanent telehealth expansions and has invested in numerous digital health companies over the years. This means he may support artificial intelligence, remote monitoring, wearables, and digital therapeutics.

Oz has long been a supporter of Medicare Advantage (MA) and even pushed for the concept of Medicare Advantage for All, which would have eliminated employer coverage and put everyone in private plans outside of Medicaid.

Additional articles: https://insidehealthpolicy.com/daily-news/oz-raised-concerns-pbms-insulin-costs-his-ira-views-unclear and https://insidehealthpolicy.com/daily-news/oz-would-bring-support-permanent-telehealth-ai-wearables-dtx-cms and https://thehill.com/policy/healthcare/5000821-trump-oz-cms-medicare-medicaid/

(Some articles may require a subscription.)

#oz #cms #trump #medicareadvantage

https://www.beckerspayer.com/payer/dr-oz-on-medicare-advantage-5-things-to-know.html

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The Land of Oz: Trump Nominates Mehmet Oz As CMS Administrator

President-elect Donald Trump has nominated television personality and surgeon Dr. Mehmet Oz to oversee the Centers for Medicare and Medicaid Services (CMS). Oz had a successful TV show for thirteen years, although has become controversial over supplements, alternative treatments, and COVID treatment. He lost to John Fetterman in a 2024 Senate race. He is a cardiothoracic surgeon and went to Harvard and Penn. He holds patents on a variety of devices related to heart surgery.

Additional articles: https://www.modernhealthcare.com/politics-policy/donald-trump-mehmet-oz-cms-administrator and https://www.healthcaredive.com/news/trump-dr-oz-nominate-medicare-medicaid-cms/733416/ and https://insidehealthpolicy.com/daily-news/oz-s-embrace-alternative-medicine-could-influence-cms-policy and https://www.beckershospitalreview.com/hospital-management-administration/president-elect-trump-taps-dr-oz-for-cms-administrator-10-things-to-know.html and https://thehill.com/policy/healthcare/4998738-trump-oz-cms-nomination/

(Some articles may require a subscription.)

#cms #trump #healthcare #healthcarereform

https://www.fiercehealthcare.com/payers/tv-personality-and-surgeon-dr-oz-nominated-run-medicare-medicaid

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Retiree Coverage Dropping Dramatically; Employers Rely More On Medicare Advantage

The Kaiser Family Foundation (KFF) finds that the number of employers providing retiree coverage is dropping dramatically. Among large employers that offer health benefits to active workers, the share offering retiree coverage has dropped from 66% in 1988 to 24% in 2024. The trend will create huge new affordability issues for the nation as aging continues.

Still, that covers 14.5 million Medicare beneficiaries with important secondary coverage to fill in the big holes in the traditional Medicare program. In order to continue coverage and limit costs, employers more and more are turning to wrapping the retiree benefit around Medicare Advantage (MA), known as EGWPs. About 56% of large employers offering retiree health benefits in 2024 offer coverage to at least some retirees through an MA plan, more than double the share in 2017 (26%). About 53% require enrollment in MA. A survey of employers suggests the trend will increase.

#medicareadvantage #egwps #employers

https://www.kff.org/medicare/issue-brief/medicare-advantage-has-become-more-popular-among-the-shrinking-share-of-employers-that-offer-retiree-health-benefits/

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Payers Expect Continuation of Enhanced Exchange Subsidies

Health plan executives say they expect continuation of enhanced premium subsidies in the Exchange in some form past 2025. Oscar Health CEO Mark Bertolini says both parties have an incentive to extend the subsidies. Executives think there will be a bipartisan solution to extend the subsidies.

Expiration of the subsidies could lead to surging premiums and destabilization of access and participation by insurers. At the same time, the price tag is big, especially as the GOP plans for its extension of the Trump tax credits.

I expressed in a recent blog that there could be an extension of the enhanced subsidies via a year-end stop-gap bill or during a 2025 master bill.  But I am not as optimistic as the plan executives.

#aca #obamacare #exchanges

https://www.beckerspayer.com/policy-updates/payer-executives-expect-limited-change-in-aca-subsidies.html

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RFK Jr. Nominated By Trump To Be HHS Secretary

In the biggest news of the day, President-elect Donald Trump nominated Democratic supporter Robert F. Kennedy Jr. to be Health and Human Services (HHS) Secretary. Kennedy is known to be a vaccine skeptic and someone who will focus on food safety, fluoride, and chronic disease. He is also known to be extremely critical of a number of the regulatory agencies under HHS, especially the Food and Drug Administration (FDA), and the food and drug industries.

Many are already characterizing the nomination as one of the toughest battles along with Attorney General nominee Matt Gaetz.

Additional articles: https://www.modernhealthcare.com/politics-policy/rfk-jr-robert-f-kennedy-hhs-donald-trump-vaccines-covid-19-pandemic and https://www.healthcaredive.com/news/trump-nominates-rfk-jr-to-lead-hhs/733009/ and https://www.medpagetoday.com/washington-watch/washington-watch/112913 and https://www.beckershospitalreview.com/hospital-management-administration/trump-picks-rfk-jr-as-hhs-secretary-7-things-to-know.html and https://thehill.com/policy/healthcare/4991324-trump-nominates-kennedy-health-department/ and https://thehill.com/policy/healthcare/4991964-rfk-jr-vows-to-be-honest-public-servant-as-hhs-chief/ and https://insidehealthpolicy.com/daily-news/rfk-jr-trump-s-choice-lead-hhs-sets-stage-health-information-war and https://kffhealthnews.org/news/article/trump-rfk-maha-federal-health-agencies-takeover/ and https://www.modernhealthcare.com/politics-policy/cdc-director-mandy-cohen-rfk-jr-robert-f-kennedy-vaccines-donald-trump

(Some articles require a subscription.)

#hhs #rfkjr #trump #healthcare

https://www.fiercehealthcare.com/regulatory/rfk-jr-selected-lead-department-health-and-human-services

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