longtermcare

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August 12, 2024

PhRMA Attacks FDA Licensing Affordability Proposal PhRMA, the brand drug manufacturer lobby, is attacking the National Institutes of Health’s (NIH) proposal to tie its licensing process to drug affordability in the United States once products hit the market. The proposal would tie U.S. prices to those in other developed countries. PhRMA argues that it would discourage collaboration by the private sector with NIH. “History demonstrates that placing unreasonable terms on licensing agreements diminishes willingness to engage in public-private partnership,” PhRMA said. But there is nothing wrong with the government tying affordability to any collaboration with the government. So much of what the drug industry eventually markets is tied to government innovation and funding.  The proposal is not unlike march-in rights on patents, which is something to consider as well. It also ties to Medicare drug price negotiations. Let’s remember: the drug market is not a free market and needs reform.

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A More Accountable Medicare Advantage

New Humana CEO Jim Rechtin made some waves recently when he made a compelling case on his Q2 2024 investor call that Medicare Advantage (MA) needs to transform and be more accountable to the government and the Americans it serves. Several other prominent MA executives, including Andrew Toy of Clover Health, John Kao of Alignment Healthcare, and Sachin Jain of Scan Health Group, also have signaled views that are similar. Rechtin made the case that greater collaboration with the Centers for Medicare and Medicaid Services (CMS) is needed and that the industry must better show its value and have some of it accrue back to CMS, Medicare, and Medicaid. Read closely, Rechtin is saying that MA has to be willing to allow Medicare to realize more of the savings. I think Rechtin is right. Let’s break the issue down a bit. Today, MA plans are in a cat-and-mouse game with

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August 9, 2024

What Do Q2 Insurer Investor Calls Tell Us? Q2 2024 investor calls are coming to a close and we see mixed results on the part of insurers. Some insurers, such as Cigna (commercial-dominate, Alignment Healthcare (Medicare Advantage (MA)- dominant), Clover Health (MA-dominant), and Oscar Health (Exchange-dominant), have bucked negative trends. On the other hand, CVS Health, Humana and Centene have been hurt by Medicare and Medicaid rates and cost pressures. United remains dominate, but also reported cost pressures and costs from the Change Healthcare cyberattacks. Elevance Health appears to be performing among the best, growing its services line and mitigating government program pressures with strong commercial performance. #healthplans #insurers #healthcare #earnings https://www.fiercehealthcare.com/payers/medicaid-ma-headwinds-pressure-payers-q2-heres-look-how-major-companies-fared Ten States Are Holdouts On Medicaid Expansion And Are Largely In The Deep South A good article recapping once positive efforts to expand Medicaid in the deep South, all of which failed during recent legislative sessions. The ten

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August 8, 2024

GOP On Attack On Questionable CMS Part D Demonstration The GOP is on the attack over the Centers for Medicare and Medicaid Services’ (CMS) announcement of a demonstration project to stabilize 2025 Part D premiums. CMS hurriedly put together the demo after it saw huge increases in Part D premiums come in during the 2025 bid cycle. This was due to the Inflation Reduction Act’s (IRA) shifting of huge costs from the government to health plans and out-of-pocket cost reductions. CVS, the biggest standalone Part D plan, apparently recommended that CMS create the program, although one already exists in law covering just a piece of the benefit. The conservative Paragon Health Institute says the program could cost $10 billion over three years to limit premiums by bailing out insurers. The IRA approach on Part D was flawed and the public will be hurt by high premiums, but I continue to

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Will Insurers Do Better Under a Harris or Trump Administration?

Many are asking whether insurers, and specifically Medicare Advantage (MA), would do better under a Kamala Harris or Donald Trump administration. Well, the answer is not so easy. There are pros and cons for each. Further, some of this could be determined by the makeup of Congress as well. But here is my quick take on the issue. I am sure we will be covering more of this as Election 2024 rolls on. The pros and cons are strictly from the standpoint of a health plan. Trump Pros Trump Cons Harris Pros Harris Cons Areas They May See Eye To Eye #election2024 #harris #trump #healthcare #coverage #medicare #medicareadvantage #medicaid #managedcare #exchanges #obamacare #aca — Marc S. Ryan

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August 7, 2024

CVS Struggles Financially; Undertakes $2 Billion In Cost-Cutting CVS slashed its full-year guidance in its Q2 investor call and has begun a multi-year initiative to generate as much as $2 billion in savings. CVS has been hit by very high utilization in its Medicare Advantage (MA) line and plans to shed about 10% of its Medicare lives in 2025. Its overall medical loss ratio (MLR) is about 90% through 1H 2024. Its Aetna line is performing so poorly that it terminated its recently-hired Aetna president and CVS Health CEO Karen Lynch will take over day-to-day control. She formerly was president of the unit and knows it well. CVS missed its revenue target but exceeded its margin expectations with $1.8 billion in Q2. CVS’ MA line has negative margins now, but the benefit reductions and contraction it plans in 2025 will return it to 4% to 5% MA margins over time. Lynch

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August 6, 2024

Republicans Ask GAO If CMS’ Proposed Part D Premium Stabilization Program Is Legal A group of House and Senate Republicans are asking the congressional Government Accountability Office (GAO) if the Centers for Medicare and Medicaid Services’ (CMS) proposed additional premium stabilization program for standalone Part D (PDP) plans is legal. CMS announced the creation of the program after it received bids that showed premiums would skyrocket despite some protections in the Inflation Reduction Act (IRA). The Part D changes in the IRA were much touted as protecting consumers by lowering out-of-pocket (OOP) costs. It also shifted huge costs to plans. These changes were not adequately funded by the government and thus plans had to reduce benefits in other areas and increase premiums. CMS was caught flat-footed and quickly created the program recently to avoid an October Surprise during open enrollment. I have issues with whether CMS has the statutory authority

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August 5, 2024

Another Devastating Piece From The Wall Street Journal On Medicare Advantage Yet another piece from The Wall Street Journal (WSJ) is bound to generate huge attention on Capitol Hill and among regulators. In its latest expose on Medicare Advantage (MA) finances, WSJ finds that MA home visits’ diagnoses for risk adjustment generated $15 billion in extra pay from 2019 to 2021. WSJ says nurses are pushed to make diagnoses the patient does not have and such diagnoses are never treated by hospitals or physicians. A July article found that $50 billion in overpayments occurred from 2019 to 2021 tied to risk adjustment submissions not treated by healthcare providers. I am a supporter of MA, but I have made the case that a small number of bad actors are generating a huge amount of overpayments and giving all plans a bad name. I have told plans to expect that the Centers

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CMS Overhauls Grievances, Requests, and Appeals Manual Again

After a major rework and massive consolidation of the Parts C & D Enrollee Grievances, Organization/Coverage Determinations, and Appeals Guidance back in 2019, the Centers for Medicare and Medicaid Services (CMS) is back at it with further updates to the all-important manual and guidance to Medicare Advantage (MA) and Part D plans. As many are aware, the manual is the bible for anything related to a grievance, Part C or D coverage request, and Part C or D appeal. Many of the changes come from updated rules as well as the further refinement of the program audit protocols. When CMS discovers something in an audit that raises confusion among plans, they often take the learnings and clarify the manuals further. Plans should be using the manual as a daily operating guide for their departments. From the manual, plans should create their policies as well as standard operating procedures. The manual

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August 2, 2024

State Affordability Boards Taking On Drug Makers Where The Feds Have Failed Frustrated by high drug prices and inadequate policy changes at the federal level (save for slow-moving Medicare drug price negotiations), states are setting up drug affordability boards that can have vast powers to reduce drug costs. This includes setting an upper limit for sales in their state for certain coverage and the uninsured. This is similar to the Medicare drug price negotiations. Due to federal pre-emption, these boards only apply to commercial plans. Medicaid has a federal rebate law that allows for federal and state rebates. Medicare is not covered as private plans negotiate prices with drug makers through pharmacy benefits managers or directly. Under the self-insured employer ERISA law, employer groups appear to be able to opt in and thus this has been built into some state laws.  So far, eleven states have approved establishing drug affordability

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