News Briefs

✦ The White House Office of Management and Budget (OMB) at press time had concluded its review of HHS’s controversial “rebate rule” that would effectively eliminate pharmaceutical manufacturer rebates in Medicare and Medicaid. The original rule, introduced by HHS in January 2019, was withdrawn after regulators estimated that it would increase federal spending by nearly $200 billion over 10 years (RMA 7/18/19, p. 1). President Donald Trump in July directed HHS to “complete the rulemaking process.” That executive order, however, stated that HHS must publicly certify that the policy would not increase premiums, federal spending, or Medicare beneficiaries’ out-of-pocket costs, “effectively meaning that the new rule currently at OMB could look different from the original,” wrote Citi analyst Ralph Giacobbe on Nov. 17. If finalized, it is likely to face legal challenges and “may never be implemented or may be reversed by the incoming Biden administration,” suggested Evercore ISI analysts on Nov. 19. “Still, if it were implemented, there would be no direct impact on the economics of the drug channel for PBMs, Part D plans, distributors or drug manufacturers (the rule has been supported by manufacturers).” In a statement from the Better Medicare Alliance, BMA President and CEO Allyson Schwartz warned, “It would be deeply unfortunate to see CMS risk undermining its own progress in lowering health care costs for seniors in the final weeks of the current administration with finalization of this ill-conceived rule.” Visit https://bit.ly/36OUA3j.

✦ Kaiser Foundation Health Plan of Washington, formerly known as Group Health Cooperative (GHC), agreed to pay $6,375,000 to resolve allegations that it knowingly submitted invalid diagnoses for Medicare Advantage beneficiaries in order to receive higher payments from the Medicare program, according to the Dept. of Justice (DOJ). The allegations were originally made in a False Claims Act lawsuit filed by former GHC employee Teresa Ross. The DOJ said its intervention in the suit reflects its “emphasis on combating health care fraud.” The matter was handled by the DOJ Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of New York and the HHS Office of Inspector General. It did not involve any determination of liability. Visit https://bit.ly/3nyD22b.

© 2021 MMIT

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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