WSJ Editorial Wrong On FTC Lawsuit On PBMs
I agree more with the Wall Street Journal (WSJ) editorial page than not, but the newspaper was dead wrong in an editorial yesterday on the Federal Trade Commission (FTC) lawsuit against pharmacy benefits managers (PBMs).
On one hand, I understand the WSJ’s complaint that the FTC appears to be singling out the PBMs when rebates are legal in government-sponsored programs. I defend much of what PBMs do. The WSJ is right, too, that brand drug makers were effectively portrayed as victims.
The WSJ says the suit could lead to higher insurance costs and premiums, and notes that net insulin prices have come down over time. It also says PBMs should not be blamed if employer groups and health plans do not pass the rebate through to the consumer (some now do) and that rebates account for just a small share of profits. It then bemoans Obamacare for leading to vertical integration because it regulated profits via the minimum medical loss ratio (MLR) requirement.
I will have a blog soon that responds to the WSJ editorial, but quite simply WSJ has not thought out its free market position terribly well. In its rush to defend business, it misses the point that the drug channel and pricing system are anything but a free market. The opaqueness and perverse incentives in the channel raise prices and undermine competition in many ways. This leads to major costs for consumers and businesses (which pay a heavy load and need to compete in the global markets). Then there is the sheer dominance of the Big 3 PBMs. That certainly is not healthy for healthcare innovation.
At base, that is what the FTC is going after – admittedly a little clumsily. We can debate the fairness of the lawsuit on the PBMs, but change needs to occur. The WSJ should channel a little more of trustbuster Teddy Roosevelt. More soon.
#pbms #drugpricing #branddrugmakers #ftc #antitrust #consolidation #manda #mergers #acquisitions
Non-Profit Hospital Benefits Quantified
A day after a hospital-friendly study on how non-profit hospitals give back well more than they receive in tax benefits, a new independent analysis shows the tax benefits are well more than the hospitals admit. A study published in JAMA says that non-profit tax benefits across all levels of government is over $37 billion annually. Many studies show that non-profit hospitals are spending less on charity care than their tax benefits as well as suing patients for unpaid bills that are exorbitant.
Additional article: https:/www.modernhealthcare.com/providers/hospital-charity-care-tax-breaks-aha-jama
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#hospitals #charitycare
HHS OIG Wants Prominent Plans To Refund Overpayments
The Department of Health and Human Services (HHS) Office of Inspector General (OIG) says that a number of prominent health plans received overpayments in the Medicare Advantage (MA) program and should refund certain amounts based on audits performed.
The plans, including Humana, Aetna, and Emblem Health, take issue with the findings. The HHS OIG audits are different from the new audits that will occur under the Centers for Medicare and Medicaid Services (CMS) risk adjustment data validation (RADV) rule back to CY 2018. In this rule, penalties can be extrapolated from sample findings across the entire membership’s revenue in a given year. The rule is being challenged in court.
Additional articles: https://www.modernhealthcare.com/medicare/medicare-advantage-overpayments-oig-humana-aetna-emblemhealth and https://www.beckerspayer.com/payer/oig-audits-humana-aetna-for-medicare-advantage-overpayments-10-things-to-know.html
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#medicareadvantage #radv #riskadjustment #overpayments
KFF Details MA Open Enrollment
The Kaiser Family Foundation (KFF) has two issue briefs regarding open enrollment season. That is coming up in October. The main issue brief is comprehensive but based on 2024 benefits. It does a great job of explaining the enrollment periods and what to consider. New benefits will be released in October, but benefit reductions, higher premiums, and contraction of geographies are expected. This will challenge Medicare beneficiaries. Interestingly, the other brief on a KFF survey finds that almost 7 in 10 did not compare plans or benefits. More than 4 in 20 did not check for changes in their plan. They are in for a potential shock this year.
Additional article: https://www.kff.org/medicare/issue-brief/nearly-7-in-10-medicare-beneficiaries-did-not-compare-plans-during-medicares-open-enrollment-period/
#medicareadvantage
Advocates Say Medicaid Is Biggest Election Issue And Getting Little Coverage
The recent presidential debate had no mention of Medicaid and that bothers advocates who argue Medicaid is the biggest healthcare issue of the year. The article notes that Kamala Harris and Donald Trump are diametrically opposed on the issue of Medicaid, with Harris likely to have a pro-coverage and pro-expansion policy on Medicaid. Trump will target Medicaid for savings due to his commitment to not touch Medicare and Social Security as well as to pay for promised extensions of tax cuts due to sunset soon.
In other news, Axios has a great article on the mysterious fact that 5.5 million children have lost Medicaid coverage, but there has been little uptick in the state children’s insurance program (SCHIP). Some kids could have migrated to commercial coverage. But it is also true that many states do not seamlessly move children from Medicaid to SCHIP. Earlier it was thought that 57% of those children losing Medicaid would be eligible for SCHIP, but rolls increased just 9%. New rules will now require seamless transition. Just seven states currently do so.
Additional article: https://www.axios.com/2024/09/25/kids-medicaid-coverage-decrease-states
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#medicaid #election2024 #harris #trump
A Start On Cybersecurity Funding
Democratic Sens. Ron Wyden (OR) and Mark Warner (VA) have introduced cybersecurity legislation that would begin the process of providing funding to hospitals (focused on urban safety net and rural ones) to strengthen standards and preparedness to fight cyber breaches. The bill would also strengthen oversight throughout the industry and levy fines for non-compliance.
Additional article: https://www.modernhealthcare.com/politics-policy/cybersecurity-bill-would-set-industry-standards-penalties
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#cyberattacks #hospitals
Congress Passes Stopgap Continuing Resolution
Both houses of Congress passed a stopgap continuing resolution to keep government open through December 20. This leaves a major showdown in December in a lame-duck Congress.
#crs #governmentshutdown
— Marc S. Ryan
