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MA Fallout Much Greater Than CMS Indicates

The Centers for Medicare and Medicaid Services (CMS) has reported that all is fine in the Medicare Advantage (MA) and standalone Part D worlds. But we know that is just not the case. It is political spin in an election year. We featured some good analysis last week about why choice will drop and some premiums and out-of-pocket costs will go up in standalone Part D.

Now, an analysis of MA shows a similar thing. Insurers are exiting geographic markets, reducing benefits, increasing premiums, and imposing higher out-of-pocket costs. An ATI Advisory analysis says more than 7% of beneficiaries, or about two million people, will need to find new offerings. This is up from fewer than 100,000 in past years. This is major displacement right around the election and is the October Surprise I have been talking about.

(Article may require a subscription.)

#medicareadvantage #healthplans #cms

https://www.modernhealthcare.com/insurance/medicare-advantage-aetna-humana-elevance-2025

CBO Says Costs of Medicare Part D Changes Are Ballooning

The Congressional Budget Office (CBO) has updated its projections on the cost of the redesign of the Medicare Part D program passed by Democrats in the Inflation Reduction Act (IRA). I have argued in several blogs (see these: https://www.healthcarelabyrinth.com/part-d-premium-woes-due-to-the-inflation-reduction-act/ and https://www.healthcarelabyrinth.com/part-d-restructuring-in-inflation-reduction-act-could-have-huge-implications-on-standalone-part-d-program/ ) that Democrats did not think through the impact on both premiums over time as well as the stability of both Medicare Advantage (MA) and the standalone Part D (PDP) program. The generous out-of-pocket reductions would be paid by higher premiums and benefit changes since the government did not fund the policy changes. The Centers for Medicare and Medicaid Services (CMS) created an emergency demonstration program to stabilize premiums in 2025. But that only lasts for three years. I also think the program is extra-legal.

Now, the CBO is saying that the original estimates of the Part D changes have increased dramatically. It will cost $10 billion to $20 billion more next year than initially projected. In addition, the demonstration will cost another $5 billion in 2025.

(Article may require a subscription.)

#ira #partd #pdp #medicareadvantage #cms

https://www.statnews.com/2024/10/03/drug-pricing-law-higher-cost-cbo/

United Healthcare Sues CMS on Call Center Measures For Star Year 2025

Interesting development already on Star Year 2025 even before the public announcement of results on 10/10.

In addition to a major drop in Stars for Humana for Star Year 2025, United Healthcare seems to have been hit with lower Stars and is now suing CMS. Humana has appeals on its ratings, too.

In the United case, the company is suing over what it says are arbitrary assessments of calls regarding timely connection to TTY or a foreign language translator as well as CMS asking the right questions and following procedures. Just one arguable assessment on a call by CMS for the Part C and D measures can cost you a higher score on those measures but also perhaps impact your overall score. This is what United says happened to them.

This builds on what happened in Star Year 2024, when Scan, Elevance Health, and some others successfully sued CMS and won a recalculation of Stars. Elevance also settled with CMS on a call center issue for 2024 Star and won increased ratings.

So, there is some hope that United and Humana could see higher scores if successful on appeal or in court.

Additional articles: https://www.fiercehealthcare.com/payers/cms-faces-another-star-ratings-lawsuit-time-unitedhealth and https://www.beckerspayer.com/payer/unitedhealthcare-sues-cms-over-1-phone-call.html

#medicareadvantage #stars #cms #unitedhealthcare

https://news.bloomberglaw.com/health-law-and-business/unitedhealth-sues-us-over-quality-rating-drop-tied-to-phone-call

Trump Won’t Reintroduce Drug Price Reform

Donald Trump is backing away from his previous support for some form of drug price reform. In his first administration, Trump proposed drug price negotiations for Part B medical drugs in Medicare and the eventual cap of prices to international benchmarks. The U.S. would pay the lowest of other nations. He indicated he wanted to extend the concept to Part D retail drugs as well. The change is surprising given polls showing overwhelming support for drug price reform across Democrats, Independents, and Republicans. The reform was pulled back by the Biden administration due to rule-making issues and poor design.

(Article may require a subscription.)

#drugpricing #medicare #branddrugmakers

https://insidehealthpolicy.com/daily-news/trump-campaign-trump-won-t-pursue-most-favored-nation-policy-drugs

Hospital Consolidation Has Meant Little Competition In Many Markets

A great Kaiser Family Foundation (KFF) analysis shows the impact of massive hospital consolidation over the past many years. Nearly half (47%) of metropolitan areas had only one or two hospitals or health systems providing inpatient hospital care in 2022. About one in five (19%) metropolitan areas have only one hospital or health system providing hospital care. More than a quarter (27%) are controlled by two hospitals or systems.

Digging deeper, in 82% of metro areas, one or two hospitals or health systems were responsible for at least three quarters of all inpatient hospital discharges. This signifies these markets are highly concentrated under federal antitrust guidelines.

We know that hospital consolidation has led to major price increases. As well, hospitals and healthcare systems have acquired physician practices, raising prices for physician care by changing practice patterns to more expensive hospital locations.

Congress needs to intervene to stop further consolidation and pass site-neutral policies.

Press Release: https://www.kff.org/health-costs/press-release/nearly-half-of-metro-areas-have-only-one-or-two-hospitals-or-health-systems-providing-inpatient-care/

#hospitals #antitrust #manda #mergers #acquisitions

https://www.kff.org/health-costs/issue-brief/one-or-two-health-systems-controlled-the-entire-market-for-inpatient-hospital-care-in-nearly-half-of-metropolitan-areas-in-2022/

Biden Administration Announced Q3 Drug Inflation Rebates

The U.S. Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) announced that many Medicare enrollees will pay less for 54 drugs available through Medicare Part B. The drugs will have a lower Part B coinsurance rate from October 1, 2024 – December 31, 2024 because drug makers increased prices higher than applicable inflation.

Over 822,000 people with Medicare use these drugs annually to treat conditions such as cancer, osteoporosis, and pneumonia. The inflation cap and rebate were passed as part of the Inflation Reduction Act (IRA), the same bill that has Medicare drug price negotiations. Savings on some drugs could be in the thousands.

Additional articles: https://www.hhs.gov/about/news/2024/09/30/hhs-announces-cost-savings-for-prescription-drugs-thanks-to-medicare-inflation-rebate-program.html and https://www.fiercehealthcare.com/payers/hhs-releases-cost-savings-54-prescriptions-including-cancer-drug

#ira #drugpricing #branddrugmakers

https://thehill.com/policy/healthcare/4904127-medicare-savings-rebates-inflation-reduction-act