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July 29, 2024

CMS Releases Part D Data For 2025; Sets Up Premium Stabilization Program The Centers for Medicare & Medicaid Services (CMS) released preliminary technical Medicare Part D bid information for Contract Year 2025. The Part D base beneficiary premium is capped at 6% growth in 2025 due to a stabilization fund set up in the Inflation Reduction Act (IRA). This was because of all the transfers of costs to plans from the government and caps on out-of-pocket (OOP) costs. The anticipated enrollment weighted-average premiums were not released in part because CMS has proposed to create an additional voluntary premium stabilization demonstration program for standalone Part D (PDP) plans. Many critics of the IRA reforms have suggested that premiums in 2025 could go up 50% to 100% (or more) due to the transfer of liabilities. The stabilization subsidy in the IRA only caps the base premium. Plans enhance benefits and will either have to cut enhancements,

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2023 Medicare Advantage and Part D Program Audit Enforcement Report Out. What Does It Tell Us?

Each year, the Centers for Medicare and Medicaid Services (CMS) issues its Part C and Part D Program Audit and Enforcement Report. I liked how CMS did it in years past, where actual plan audit scores as well as average scores by audit area were released. It gave you a great feel for where plans were struggling the most. Nonetheless, the report continues to be a good tool for Medicare Advantage (MA) and Part D plans (MA-PD or standalone PDP) to review and hone their compliance chops. Here are the major findings from this most recent report (link at bottom). As well, I will go through what I heard about 2024 audits from plan friends and contacts. Background CMS has been expanding the audits it does, using both internal and external expertise.  In 2023, a total of 69 MA-PD contracts were audited — 31 of these contracts offered special needs plans (SNPs). CMS also

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July 26, 2024

What If Exchange Premium Subsidy Enhancements Lapse? A new Kaiser Family Foundation (KFF) analysis determines the potential effects of the lapsing of the enhanced premium subsidies in the Exchanges after 2025. KFF concludes that enhanced subsidies have cut premium payments by an estimated 44%. It says if the enhancements lapse, individuals in twelve of the states that use HealthCare.gov would see their annual premium payments at least double on average. Enrollees with low incomes would see the greatest jump in their premium payments, but all income groups would be hurt (including middle-income earners).  The Congressional Budget Office (CBO) said that Exchange enrollment would drop from an estimated 22.8 million in 2025 to 18.9 million the following year if the subsidies lapse. It would drop to 15.4 million in 2030. This would send our uninsured rate up. I expect it to continue to increase now due to the Medicaid redeterminations and losses

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July 25, 2024

Paragon Proposes Medicaid Reforms The conservative think tank Paragon Institute proposes to phase out the current 90 percent federal matching rate for the Affordable Care Act’s (ACA) Medicaid expansion and begin applying the regular federal match after eight years. It would also reduce the 50% Medicaid reimbursement floor to 40% for the richest states, also phased in over eight years. It says spending would be reduced by $600 billion from 2026 to 2034. Trump is known to pay attention to Paragon. While radical and it threatens to reduce coverage nationally, the proposal is less disruptive than the fundamental remake of the ACA and Medicaid attempted by Republicans during Trump’s first term. #aca #medicaid #coverage #reimbursement https://finance.yahoo.com/news/paragon-proposes-bold-medicaid-funding-100000986.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAJzUe6HiQKz3okVpdso7A0yLeZAIPW1Ub2ostzrg7ZONyQ8z1KWrDGM859gWDHSx-g-178HChmqc40o8i1lMq0Z0f8O1tXErWp6qrflxRiOQ5GwC6iEyxQ2Yhd9fdz-o9EckMhY6Yljg3gA_7GDG6JdxppPhxUpCV_1324WzFyBd CMS May Take A Tougher Oversight Stance On Medicaid Enrollment The Centers for Medicare and Medicaid Services (CMS) says it will adopt greater oversight of the Medicaid enrollment process in states given the major problems

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Part D Premium Woes Due To The Inflation Reduction Act

Major concerns are emerging that standalone Part D (PDP) plans are seeing skyrocketing premiums due to the unintended consequences of major Part D restructuring and out-of-pocket (OOP) cost reduction passed as part of the Inflation Reduction Act (IRA). A new report by the Council for Affordable Health Coverage (CAHC) asks Congress to intervene on what will be growing impacts in 2025 after premium rises in 2024. The increased costs in Part D are tied to a number of changes in the IRA. I went in-depth on all the Part D changes included in the IRA in an earlier blog on April 15, 2024: https://www.healthcarelabyrinth.com/major-changes-occurring-in-medicare-part-d/ . New costs to plans in Part D due to IRA Here is a brief summary of additional costs in the IRA now borne or will be borne in whole or part by plans since the IRA passed: 2023: 2024: 2025: In addition, PBMs are now

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July 24, 2024

Medicare Advantage Inpatient Days Rising Hospitals cry foul at every pass over Medicare Advantage (MA) plans’ efforts to control inpatient hospital utilization. But a new analysis from the Kaiser Family Foundation (KFF) shows that inpatient days attributable to MA have increased considerably over time. Medicare Advantage’s share of inpatient days grew from 13% to 23% from 2015 to 2022. As of 2022, nearly half (48%) of all Medicare inpatient hospital days were attributable to MA. The MA penetration in that year averaged just short of 46%. There are numerous other great statistics in the analysis. This year, MA plans are required to follow traditional program standards for deciding whether a stay is required and thus the share will increase more. #medicareadvantage #hospitals #priorauthorization https://www.kff.org/medicare/issue-brief/medicare-advantage-enrollees-account-for-a-rising-share-of-inpatient-hospital-days/ 2020 Exchange Risk Adjustment Payment Data Published The Centers for Medicare and Medicaid Services (CMS) published the annual risk adjustment reconciliation data today. Risk adjustment is

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Will Democrats Be Victim Of An October Surprise Of Their Own Making?

For those involved in politics, candidates and parties fear what is known as the October Surprise, a scandal or national or world event that threatens to upend candidacies and partisan control of federal and state bodies. These events can be planned (e.g., by opponents) or unplanned (e.g., a terrorist attack or other world event). With the election very close, especially with the change at the top of the Democratic ticket due to President Biden’s lagging performance, many are thinking these types of events could be potential game changers on Election Day. But are the Democrats forgetting about a potential October Surprise they themselves may have created that could impact their electoral chances? Let me explain. Medicare enrollment season Each October, the enrollment season begins for Medicare Advantage (MA) and Part D plans. In the MA world enrollment is fully voluntary for individual policies. In the standalone Part D (PDP) world,

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July 23, 2024

House Committee Grills Big 3 PBM Executives On Practices Executives from the Big 3 pharmacy benefits managers (PBMs) got grilled today before the House Oversight Committee. The committee just released a report on its over year-long investigation of the Big 3 that found that they are anticompetitive, imperil independent pharmacies, overcharge payers and patients using spread pricing, and enter into brand drug rebate deals that tie to the drugs’ preferential placement on formularies. The report concluded the Big 3 not only don’t save on or control costs but steer patients toward higher-priced drugs and their own pharmacies. The committee argued that the PBMs have created multiple ways to advantage themselves in the vertically integrated world the Big 3 live, including the use of group purchasing organization (GPOs). The executives tried to refute the findings and often were silent in response to questioning. The committee also criticized prior authorization and step

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July 22, 2024

Probable Democratic Presidential Candidate Harris To Left Of Biden On Healthcare With endorsements stacking up, Vice President Kamala Harris looks to be the probable presidential nominee of the Democratic Party after President Biden bowed out this weekend. Thus, the media is looking at her positions, including on healthcare.  In general, Harris appears to be to the left of President Biden on a number of healthcare issues.  Harris will of course take credit for the Medicare drug price negotiations and Exchange premium enhancements. She would want to expand and extend each. She agrees with Biden’s anti-trust platform and was active on the issue as California’s attorney general. She may be to the left of Biden on abortion rights, universal access, and drug pricing.  Harris once backed Bernie Sanders’ Medicare for All, although she stepped it down later and advocated for a lighter form — a decade-long transition with private plans playing

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Vertical Integration Appears Very Profitable For Health Insurers And Is Raising Concern Among Lawmakers And Regulators

I have talked often about horizontal and vertical integration in healthcare in these blog pages and on my podcast. One major blog I wrote on vertical integration is here from December 21, 2023: https://www.healthcarelabyrinth.com/do-health-plans-relationships-with-owned-entities-open-up-more-scrutiny/ . Let me recap a little as background before I get to an extremely interesting infographic Jared Strock did recently. Jared is an actuary and health insurer/Medicare Advantage market and finance expert. He posts daily and is well worth following. I posted his graphic, his LinkedIn, and a recent post he did on LinkedIn below. Key background on vertical integration from my earlier blog In comes Strock’s analysis Strock used his financial skills to comb public company financial disclosures to show just how big related-party transactions have become. Here is a summary of what Strock said in his LinkedIn post (link right below the graphic): Graphic source and notes: Q1 2024 financial information for seven major

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