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What’s Up? Medicare Costs Will Be Up in 2024, While Medicaid Will Be Down At The Same Time

The Congressional Budget Office (CBO) has reported one of those weird conundrums in healthcare when it outlined expected cost increases in Medicare and Medicaid for 2024.  The CBO said that Medicare is expected to shoot up dramatically just as Medicaid expenditures will drop considerably as well. How is that possible? Let’s dig in here. Medicare The CBO says that Medicare spending will increase by about $65 billion in 2024 to $865 billion.  That is an increase of about 8%.  The significant rise in expected Medicare costs is driven by a few different things: In the outyears, outlays for Medicare will equal 3.2 percent of gross domestic product (GDP) in 2025 and increase to 4.2 percent of GDP in 2034. Medicaid On the flip side, the CBO says Medicaid expenditures will decrease by $58 billion to $557 billion.  This is a drop of about 9%.  The reason for this drop is driven by

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February 14, 2024

Elevance Health Takeover Of BCBSLA On Hold Again Facing pushback from Louisiana regulators, the governor and some lawmakers, BCBSLA has again withdrawn its application for sales to Elevance Health. BCBSLA sought permission to transition to a for-profit entity. Additional article: https://www.modernhealthcare.com/mergers-acquisitions/elevance-health-blue-cross-louisiana-merger-called-off (Some articles may require a subscription.) #bcbsla #elevancehealth Link to Article Biden Administration To Scrutinize Middlemen In Drug Shortage Controversy The Biden administration has issued a Request for Information (RFI) about the role of drug channel middlemen in creating drug shortages. The middlemen include group purchasing organizations (GPOs) and drug wholesalers. About six entities dominate. The Federal Trade Commission (FTC) and the Department of Health and Human Services (HHS) are leading the effort. The agencies will look at market concentration, contracting practices, and regulatory exemptions. In addition, GPOs’ sole-source agreements that prevent hospitals and other providers from acquiring drugs elsewhere will be examined. HHS Press Release here: https://www.hhs.gov/about/news/2024/02/14/ftc-hhs-seek-public-comment-generic-drug-shortages-competition-amongst-powerful-middlemen.html Additional

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February 13, 2024

Showing Strain In MA, PE Deals Dropped Significantly Private equity firms’ investment in the Medicare Advantage (MA) space are way down from a peak in 2021. This is a sign that rising medical expense and regulation is impacting the industry. Just 4 deals occurred in 2023, down from 19 in 2021. Additional article here: https://www.modernhealthcare.com/finance/private-equity-medicare-advantage-pesp-report (Some articles may require a subscription.) #medicareadvantage #privatequityfirms Link to Article Site-Neutral Payment Fight Great Kaiser Health News article on the fight over site-neutral payments.  Advocates want site neutral and won passage in a small way on Part B drug infusion in the House.  Hospitals are using their weight and dollars to keep it out of any bill.  In a related move, advocates are proposing a possible rural exception to a site neutrality to get the reform passed. See here: https://insidehealthpolicy.com/daily-news/site-neutral-proponents-float-rural-exemption-hospitals-flag-risks (Some articles may require a subscription.) #siteneutral #medicare Link to Article Texas Federal Judge

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February 12, 2024

Kaiser Turns Around Performance Kaiser Permanente moved from a $1 billion loss in 2022 to about breakeven at least in terms of operating income in 2023.  Its income was $4.1 billion with investments.  It reached the $100 billion mark in both operating revenues and expenses. #kaiserpermanente #managedcare Link to Article Article Summing Up Congressional And Regulatory Issues On AI A good article on all the activities surrounding the use of AI and possible regulations.  The article discusses potential Capitol Hill bills, recent rules and guidance from the Centers for Medicare and Medicaid Services (CMS) and lawsuits against insurers on AI issues. #ai #claimsdenials #priorauthorization Link to Article Humana Study Shows Discrimination In Healthcare A new study sponsored by Humana focused on structural determinants of health rather than social determinants.  The study found that 88% of respondents reporting healthcare discrimination were black. While similar and related to social determinants, structural determinants

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Senate HELP Committee Hearing On Drug Pricing Shows The Deep Divide In Congress

While I covered the topic in my Newsfeed on February 8 and 9, I thought it was important to blog about the February 8 Senate Health, Education, Labor and Pension (HELP) drug price hearing. I have listened to every minute of the almost three-hour drug maker CEO hearing (where three brand drug makers testified) as well as an additional thirty-minute hearing presenting the views of advocates and researchers. I want to share my reaction. First, it is important to remember that, while I am a Republican, I march up the middle of the spectrum on health policy in general and share many of the views that Democrats do on drug pricing. I tend to favor what the Democrats have done on drug pricing because I think movement needs to happen and what has passed in the Inflation Reduction Act’s (IRA) Medicare drug price negotiations is a good experiment. Second, the

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February 9, 2024

Senate To Tackle Medicare Physician Formula A bipartisan group of senators will tackle long-term reform of the Medicare physician pay formula. On 1/1, a 3.4% reduction went into effect due to the existing formula.  Some have accused physicians of spending more time lobbying on health plan prior authorization reform than on their own rate issues. #medicare #physicians Link to Article CMS Wants Tougher Regulation Of Accrediting Organizations A proposed rule from the Centers for Medicare and Medicaid Services (CMS) wants reform of how accreditation organizations operate, including conflict of interest and other requirements in force for other organizations. CMS Fact Sheet here: https://www.cms.gov/newsroom/fact-sheets/accrediting-organization-proposed-rule-fact-sheet Additional article here: https://www.fiercehealthcare.com/regulatory/cms-proposes-greater-oversight-consulting-limitations-accrediting-organizations (Some articles may require a subscription.) #cms #healthplans Link to Article Provider Lobbies Pushing PA Reform At State Level A number of states have enacted and more will enact broad reforms of prior authorization (PA).  Generally these reforms revolve around electronic PA transmission,

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February 8, 2024

Weighty Lesson For Employers From NC State Employee Plan Experience On GLP-1 Drugs A lesson for employer groups as weight-loss drugs take off in popularity.  An analysis of data says that just 25 of over 6,200 prescribers in the North Carolina State Employee Plan accounted for 8 percent of the costs of prescriptions for costly weight loss drugs. These include GLP-1 meds Wegovy and Saxenda. These drugs accounted for 10% of total costs – or over $100 million. The state wanted to rein in costs with some ideas, but its pharmacy benefit manger shot them down. Shame on the healthcare players to not work with employers battling these cost issues. As important, there are telehealth entities now emerging, backed by private equity, advertising solely to prescribe such meds.  It is corrupt. #weightlossdrugs #drugpricing Link to Article Good News From Oscar Health; It Favors ACA Subsidy Extension Oscar reported major enrollment

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Part 1: My Courageous Daughter Is Having Brain Surgery!

This is one of a number of blogs that will appear on my daughter.  I call her Kitty.  She is a wonderfully talented, bright, and empathetic individual in her late ‘20s.  She and I agreed I would write this series to impart how important health coverage is. Not only is her decision to have surgery courageous, but so is her decision to share her journey through me. The principal reason to share the journey is because we both want to explain what many average Americans go through financially when they have major operations and do not have the best insurance or no insurance at all.  My daughter is privileged to come from a well-off family and to have consistent and robust insurance.  This will mean that she will pay a tiny amount for a surgery with a sticker price in the hundreds of thousands of dollars.  But for uninsured and

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February 7, 2024

House Republicans Vote To Ban QALYs House Republicans passed a bill to ban the use of the controversial Quality Adjusted Life Years (QALY) measurement in federal programs.  Additional article here: https://www.fiercehealthcare.com/payers/house-republicans-vote-ban-pricing-metrics-federal-programs #qalys #medicare #medicaid Link to Article Fitch Says MA Trends Will Mean A Credit Neutral Outlook Fitch Ratings says that the spike in medical expense and rate reductions in Medicare Advantage (MA) will end up being credit neutral, arguing plans are well-placed to weather a storm. #medicareadvantage Link to Article Even With Good 2023, CVS Health Saw Utilization Spike and Cuts Its 2024 Outlook CVS Health is cutting its 2024 outlook in the face of a utilization and medical expense spike at insurer Aetna. It otherwise had good 2023 results.  CVS also agreed with Humana and Centene that the 2025 rate announcement was inadequate. Additional articles here: https://www.fiercehealthcare.com/payers/cvs-earns-350-billion-revenue-2023-over-77-billion-profit and https://www.modernhealthcare.com/insurance/cvs-health-medicare-advantage-utilization-2024 and https://www.forbes.com/sites/brucejapsen/2024/02/07/cvs-health-profits-hit-2-billion-as-company-benefits-from-new-provider-businesses/?sh=443dc8d5507b (Some articles may require a subscription.) #cvshealth

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February 6, 2024

Centene Reports Good Numbers, But Cautions On MA Rates Centene reported good numbers to Wall Street today, with notable increases in its Exchange line of business. Medicaid enrollment dropped due to redeterminations. But like Humana, Centene is cautioning that the Medicare Advantage (MA) 2025 rate announcement was inadequate and could lead to further benefit and other changes in its MA line. It also notes that other regulatory changes are impacting its MA investment.  Centene has already pared back benefits and geographies to bring its MA line to a better financial position. Additional articles here: https://www.modernhealthcare.com/insurance/centene-medicare-advantage-rate-cut-2025-sarah-london and https://www.healthcaredive.com/news/centene-medicare-advantage-rate-drop-2023-earnings/706620/ Two other articles on the fallout from MA rates and regulatory changes here: https://www.modernhealthcare.com/insurance/medicare-advantage-rate-cut-2025-reimbursements-benefits-unitedhealth-humana and https://www.statnews.com/2024/02/05/cano-health-bankruptcy-medicare-advantage/ These articles underscore what I said in these blogs: https://www.healthcarelabyrinth.com/with-boom-over-will-medicare-advantage-collapse-or-adjust/ and https://www.healthcarelabyrinth.com/2025-rates-for-medicare-advantage-plans-look-tight/ (Some articles may require a subscription.) #centene #medicareadvantage Link to Article Another Big Week For Drug Policy Much like last week, this week is very

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