February 1, 2024

MA Issues Trickle Down To Providers And Vendors

This article focuses on Medicare Advantage (MA) troubles – rates, utilization, medical expense, and punitive regulatory requirements – and how they impact insurers, value-based-care providers, and vendors. My intel suggests that the traditionally flush global and partial risk funds that insurers have with providers around the country (providers share in profits when they help reduce costs and improve quality) have dried up or are drying up. Providers are already attacking insurers on numerous issues and this development will only make such relationships even worse.

Note as well the reference to MA plans emphasizing profitability by reining in market growth and benefits.  I say just this in my blog on the topic here: https://www.healthcarelabyrinth.com/with-boom-over-will-medicare-advantage-collapse-or-adjust/ . As well, see my just published blog on the 2025 MA payment proposal: https://www.healthcarelabyrinth.com/2025-rates-for-medicare-advantage-plans-look-tight/

(Article may require a subscription.)

#medicareadvantage #vbc #providers

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Scan Group CEO Recommends Medicare Advantage Reforms

A good Forbes article by Sachin Jain, the CEO of the non-profit Scan Group. Jain thinks Medicare Advantage (MA) needs reforms, including the below.  I am not on board for all of the proposals but he has some excellent points.

  • Benefit standardization
  • Broker and marketing reform
  • Star reform
  • Risk adjustment reform
  • Payer and provider collaboration

#scan #medicareadvantage

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Hospital Finance Turning Around

While some studies continue to say something different, Kaufmann Hall is saying that hospital finances appear to be turning around, with margins up 15% year over year. Cost-cutting and an emphasis on outpatient volume are responsible for the turnaround.

#hospitals #margins

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Federal Government Makes Initial Offers To Ten Drug Makers Under Medicare Drug Price Law

In the first round of Medicare drug price negotiations, the Centers for Medicare and Medicaid Services (CMS) has issued its initial price proposal to the makers of the ten drugs subject to negotiation.  The prices will not be made public unless the drug makers releases them.  These initial offers will lead to acceptance of the price or counter-proposals from drug makers by March 2, followed by a round of negotiations.  CMS will issues final prices on September 1.  The prices would go into effect 1/1/2026.

The brand drug makers attacked the behind closed doors approach, say the prices offered are politically motivated, and that the value of the drugs are not being recognized.  At the same time, CMS and its parent, the Department of Health and Human Services (HHS) are going on the offense.  The offers are based in part on drugs in other developed world companies.  HHS published a study that says that brand drugs are 322% higher in the U.S. than other developed countries (after rebates).  Studies consistently show a range of double to quadruple here. The Biden administration also attacked brand drug makers for stock buybacks and lobbying costs. The various lawsuits that business and drug lobby groups and drug companies have filed are beginning as well.

I think that the Biden administration could not have planned this better.  Big Pharma will lose the public relations, policy, and legal fights.  They at best will win some delays in the program.  This is good news for Americans.

Additional articles here: https://insidehealthpolicy.com/inside-drug-pricing-daily-news/cms-makes-initial-drug-price-offers-highlights-new-ira-research and https://www.usatoday.com/story/news/health/2024/02/01/biden-administration-launches-medicare-drug-price-negotiations/72411019007/ and https://thehill.com/policy/healthcare/4441371-drug-price-negotiations-legal-battles-ramp-up/ and https://www.managedhealthcareexecutive.com/view/cms-begins-medicare-drug-price-negotiations .

Additionally, this Health affairs Forefront Blog raises issues with basing its assessments on Canada:  https://www.healthaffairs.org/content/forefront/why-us-medicare-drug-price-assessments-and-negotiations-should-not-use-canada-model

(Some articles may require a subscription.)

#ira #branddrugmakers #drugpricing

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Senate To Hold Hearing On AI Regulation

The Senate Finance Committee will hold a hearing on the use of algorithms and artificial intelligence systems in healthcare on Feb 8. The goal is to determine if regulation should occur via a new federal agency or through existing agencies’ regulatory processes.

(Article may require a subscription.)


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Marketing Firm Gets Its Comeuppance For Opioid Peddling

Publicis Health, part of French media conglomerate Publicis Groupe, got its comeuppance.  It will pay $350 million to states for its role in working with Purdue Pharma to peddle Oxycontin.  It is perhaps way too little for the firm’s clear culpability.


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— Marc S. Ryan

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