Newsfeed

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

(Some articles may require a subscription.)

#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

(Some articles may require a subscription.)

#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.

(Article may require a subscription.)

#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

(Some articles may require a subscription.)

#medicareadvantage #hospitals #medicare #medicaid

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

Insurtech Devoted Health Has Major Financial Raise

Medicare Advantage (MA) insurtech Devoted Health raised $112 million in its Series E funding round. Devoted has over 227,000 members, up from 142,000 in December 2023. Its Star rating averages 4.6. It is in 13 states and almost 300 counties.

Devoted is one of the tech-based startups doing well in MA, along with Clover Health and Alignment Healthcare. Each seems to be bucking the major financial pressures seen by the Big 7 MA national plans. Thus, Devoted has filed to expand into seven new states and will double its county penetration. This doesn’t mean, though, that it won’t rein in benefits due to the erosion of MA rates. It likely will do so to protect its long-term financial health.

#medicareadvantage #devotedhealth #insurtechs

https://www.fiercehealthcare.com/payers/payer-roundup-devoted-health-raises-112m-la-care-eliminates-prior-auth-codes

McKinsey & Company Releases Three Briefers On Medicare Advantage’s Future

McKinsey and Company has three important briefers on the future of Medicare Advantage. This is a must read. Among the recommendations in the extremely thorough document include:

• Star measures have increased over the last decade and enrollees are attracted to higher-performing plans. But Star measures will get harder.
• Star performance focus areas are shifting and clinical and pharmacy performance become key.
• Partnering with providers to maximize performance, lower costs, and ensure member satisfaction is key. Value-based arrangements can pay dividends.
• Health equity is a key theme for Medicare in the future and focusing on social determinants is key.
• MA plans have huge opportunities in the Special Needs Plan (SNP) world.
• There are major rate and regulatory pressures hitting plans.
• A focus on member experience is critical.

Briefers here: https://www.mckinsey.com/industries/healthcare/our-insights/the-future-of-medicare-advantage

#medicareadvantage #partd

https://www.beckerspayer.com/payer/3-things-payers-need-for-great-ma-star-ratings-in-2025-and-beyond-mckinsey.html

Harris Economic Plan Includes Continuation of Biden Healthcare Priorities And More

In a major economic speech today, Democratic presidential nominee and Vice President Kamala Harris promised to lower drug prices, maintain enhanced premium subsidies in the Exchanges, and curb and retire medical debt. She would expand the Medicare drug price negotiation program to expand insulin and out-of-pocket drug cost-sharing caps to the commercial world. She also promised to combat pharmacy benefits managers’ (PBMs) unfair practices.

Additional articles: https://thehill.com/policy/healthcare/4832005-kamala-harris-level-up-biden-admin-health-care-programs/ and https://insidehealthpolicy.com/daily-news/harris-economic-policy-plan-echoes-biden-s-health-cost-agenda

(Some articles may require a subscription.)

#healthcare #elections2024 #harris

https://www.modernhealthcare.com/politics-policy/kamala-harris-health-plan-aca-drug-prices

Biden Administration Announces First 10 Negotiated Medicare Drug Prices

In a coup for the Biden administration, all manufacturers of the ten drugs subject to negotiation for 2026 either agreed to prices or decided to stay in the Medicare prorgam when a price was imposed. The administration and the Centers for Medicare and Medicaid Services (CMS) say that, if the new prices had been in effect last year, Medicare would have saved an estimated $6 billion, or approximately 22 percent, across the ten selected drugs. The negotiated prices range from 38 to 79 percent discounts from list prices.

About nine million people with Medicare use at least one of the ten drugs. In addition to government savings, Medicare beneficiaries with prescription drug coverage will see savings of $1.5 billion in their personal out-of-pocket costs in 2026.

The drugs accounted for $56.2 billion in Medicare spending, or about 20 percent of total Part D gross spending in 2023.

The Congressional Budget Office (CBO) estimated $100 billion in savings over 10 years from drug negotiations, and a $3.7 billion savings in the first year. So the first-year negotiations could save more.

The journey for Medicare drug price negotiations (passed as part of the Inflation Reduction Act) continues with CMS selecting up to fifteen more drugs covered under Part D for negotiation for 2027 by February 1, 2025. This will continue with up to fifteen more drugs covered by Part B or Part D for 2028, and up to 20 more Part B or Part D drugs for each year after that.

The real issue is while savings from the list prices are between 38 and 79 percent, what will the net savings be? Because prices are now set, brand drug makers will no longer give rebates to the pharmacy benefits managers (PBMs) at the level they did before if at all. But based on estimates of rebates, the final pricing is still a substantial savings. Before the announcement, analysts at JPMorgan suggested the negotiated prices could be on average 40% lower, which is greater than the 22 percent announced by CMS. Still, PBMs often keep portions of rebates, consumers don’t see the rebate relief at the point of sales, and this provides for a much more transparent model more along the lines of generic drugs.

Other concerns revolve around whether pharmacy benefits managers could restrict access to the drugs in favor of others with rebates. CMS says it will use a comprehensive formulary review process to prevent this abuse that would undermine patient access.

CMS announcement materials: https://www.cms.gov/newsroom/press-releases/negotiating-lower-drug-prices-works-saves-billions and https://www.cms.gov/newsroom/fact-sheets/medicare-drug-price-negotiation-program-negotiated-prices-initial-price-applicability-year-2026 and https://www.cms.gov/files/document/fact-sheet-negotiated-prices-initial-price-applicability-year-2026.pdf

Additional articles: https://www.modernhealthcare.com/politics-policy/biden-medicare-drug-price-negotiations-pharmaceutical-costs-abbvie-merck-amgen and https://www.healthcaredive.com/news/medicare-drug-price-negotiations-results/724320/ and https://www.beckershospitalreview.com/pharmacy/cms-negotiated-drug-prices-12-notes.html and https://thehill.com/homenews/4829155-medicare-drug-price-negotiations/ and https://thehill.com/policy/healthcare/4828633-medicare-negotiations-6-billion-savings/ and https://www.managedhealthcareexecutive.com/view/questions-remain-about-whether-negotiated-drug-prices-will-save-money and https://www.managedhealthcareexecutive.com/view/hhs-releases-prices-for-medicare-negotiated-drugs and https://insidehealthpolicy.com/daily-news/cms-drug-negotiations-beat-cbo-expectations-price-cuts-38-79-percent

(Some articles may require a subscription.)

#ira #drugpricing #branddrugmakers #medicareadvantage #partd #pdp #cms

https://www.fiercehealthcare.com/regulatory/cms-negotiated-drug-prices-would-have-saved-medicare-6b-last-year

Politico Raises Issue Of CMS Premium Stabilization Demonstration For Medicare Part D PDPs

The mainstream media is finally covering the potential October Surprise for Democrats. There are possible huge increases in standalone Medicare Part D (PDP) premiums due to the transfer of costs to plans from the government and member out-of-pocket cost reductions in the Inflation Reduction Act (IRA). The Politico article lays it out well.

The Centers for Medicare and Medicaid Servies (CMS) created a last-minute demonstration to blunt the impacts and the GOP is accusing Democrats of using the U.S. Treasury for political purposes. I continue to doubt that CMS has the authority to do this.  It usurps Congress’ control. I raised this issue in two blogs several weeks ago (July 24 and July 25) 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/ .

In addition to the PDP premium hikes, Medicare Advantage (MA) plans are expected to have benefit cuts for a number of reasons, including the IRA changes and rate reductions.

Additional article: https://www.beckerspayer.com/payer/the-perfect-storm-facing-medicare-recipients-during-enrollment-season.html

#election2024 #medicareadvantage #partd #pdp #ira

https://www.politico.com/news/2024/08/13/biden-adiminstration-medicare-drug-premiums-spike-00173308