Benefit Design

West Coast Public Sector Plan Sponsors Will Coordinate More Closely Through Purchaser Group

The Purchaser Business Group on Health (PBGH) for the first time has created a public purchaser advisory committee. The decision, part of the purchaser group’s newly announced five-year plan, is meant to align the needs of its public members and integrate them with private purchasers.

PBGH is a nonprofit coalition representing nearly 40 public and private purchasers that collectively spend $350 billion annually on health care services. While the group’s members include major corporations such as Apple, Inc., Microsoft Corp. and the Walt Disney Co., PBGH is different from other purchasing organizations in that it also represents public purchasers, according to Elizabeth Mitchell, PBGH’s chief president and chief executive officer.


AHIP Cheers Ruling in Dialysis Payment Case, but Congress Could Step In

Recently, health insurance trade group AHIP highlighted an under-the-radar Supreme Court ruling that centered on who should pay the bulk of the costs associated with treating some of the sickest patients: those with end-stage renal disease (ESRD). However, industry experts tell AIS Health, a division of MMIT, that what seems to be a victory for employer-based plans may be short-lived if Congress weighs in on the issue.

The case, Marietta Memorial Hospital Employee Health Benefit Plan v. DaVita Inc., concerned whether an employer-based health plan violated the Medicare Secondary Payer Statute (MSPS) by offering limited outpatient dialysis benefits to its enrollees. Specifically, the health plan in question had no in-network dialysis providers, capped reimbursement at 87.5% of the Medicare rate, and “imposed utilization management restrictions, such as claims audits and reviews,” health law attorney and Georgetown University research professor Katie Keith noted in a June article for Health Affairs.


Holistic Approach to Prior Authorization for Genetic Testing Is Key in Making Sure People Get Right Tests, Best Care in Timely Manner

Genetic testing is becoming a greater part of health care, as providers can take advantage of it to help inform patients’ diagnosis and treatment. Multiple tests are now available, and many health plans are covering their costs if certain criteria are met. But that’s a tall order with more than 77,000 genetic tests available and new tests constantly coming to market.

Many payers have prior authorization for genetic tests: An AHIP industry survey conducted between September and December 2019 found that genetic testing was the third most common treatment for prior authorization behind specialty drugs and high-tech imaging.

Payers Report Cost Savings From Shifting to Biosimilars

As FDA approval of biosimilars continues and agents are expanding into new indications, more payers are using these drugs and seeing cost savings through that utilization, according to Zitter Insights.

When the FDA approved Fresenius Kabi’s Stimufend (pegfilgrastim-fpgk) on Sept. 1, it was the sixth biosimilar of Amgen Inc.’s Neulasta (pegfilgrastim) that the agency had approved. It also was the 38th biosimilar approved since the first one, Novartis Pharmaceutical Corp. division Sandoz’s Zarxio (filgrastim-sndz), was approved March 6, 2015, referencing Amgen’s Neupogen (filgrastim).

TennCare Acquiesces to CMS’s Demands for Demo Revisions

Bowing to CMS’s request after another public comment period, Tennessee is reluctantly pursuing a series of changes to the pending TennCare III demonstration that had been approved by the Trump administration for a start date of Jan. 8, 2021. In what one source says is an unusual back-and-forth on public display, the state will abandon its notorious plans to implement a closed Medicaid formulary and adopt a fixed funding mechanism.

Shortly before President Joe Biden took office, the Trump administration in January 2021 approved Tennessee’s request to use an “aggregate cap” for Medicaid funding that many industry observers had likened to a block grant. Through that approach, Tennessee would have received federal Medicaid funds based on a fixed budget target that is determined by CMS and the state using historical enrollment and costs data. If spending fell below that target cap but certain quality goals were met, the state would earn up to 55% of annual savings to reinvest back into other state health programs.

Study Suggests Higher Priced Medicare Advantage Plans Aren’t Always Higher Quality

The quality of care and patient experience significantly varies among Medicare Advantage plans with similar monthly premiums, according to an analysis published on Aug. 26 in JAMA Health Forum. The retrospective, cross-sectional study also found that there was only a small mean difference in quality among low- and high-cost plans.

Amelia Haviland, the study’s lead author, tells AIS Health that the results indicate “how little guarantee there is that by paying more you’re going to wind up in a plan with higher quality. You might pick one of the plans that’s well below the mean within that cost tier or much higher.” However, she suggests insurers that offer low-cost Medicare plans can use the findings to show that people can still receive top-notch plans without paying high premiums.


Johnson & Johnson Files Lawsuit Against Copay Maximizer Company SaveOnSP

Multiple companies that provide alternate funding options for patients have been launching over the last several years. But one maximizer company has found itself the target of a legal battle with manufacturer Johnson & Johnson over its strategy to reclassify drugs and maximize the copay assistance it gets from pharma manufacturers.

Copay maximizers have companies classify some drugs as “non-essential health benefits” (NEHBs) as outlined in the Affordable Care Act (ACA). They then secure patient assistance for these drugs through manufacturers’ or charitable foundations’ patient assistance programs, taking the full annual amount of assistance per drug and spreading out that money over the course of the year (see story). The programs are seen as follow-on offerings to copay accumulators, which take the maximum assistance up front and deplete the contribution before the end of the year.

Copay Maximizer Programs Are Coming Under Fire

Multiple companies are offering copay maximizer — also known as variable copay — programs. And while they may be attractive to firms that implement them, a closer look might reveal them to be not as appealing as they seem at first blush, say industry experts. The programs also are being challenged in legal settings, including a lawsuit by manufacturer Johnson & Johnson against SaveOnSP (see story).

Traditionally, when a manufacturer provides copay assistance for one of its drugs, that dollar amount would count toward the patient’s deductible and out-of-pocket maximum. But copay maximizer programs will distribute 100% of available manufacturer copay offset funds over 12 months, as opposed to copay accumulators, which apply the maximum manufacturer assistance up front and deplete that contribution before the end of the year. Payments in both approaches do not count toward members’ deductibles and out-of-pocket maximums.

Survey Finds That Payers Are Covering Sequential Use of SMA Agents

A recent FDA approval of a label expansion put the three marketed therapies for spinal muscular atrophy (SMA) on equal footing for the youngest patients. And recent survey found that many payers are covering sequential use of the costly agents, including a gene therapy.

The FDA initially approved Evrysdi (risdiplam) from Roche Group member Genentech USA, Inc. on Aug. 7, 2020, for the treatment of SMA in people at least 2 months old. On May 30, 2022, the agency expanded the drug’s label to include the treatment of infants less than 2 months old. The survival motor neuron 2 (SMN2) splicing modifier is an oral solution administered by mouth or feeding tube and can be administered by a patient or caregiver at home after a recommended consultation with a health care professional prior to the first dose.

Specialty Trend Rose in 2021, but Biosimilars Are Having Impact

Specialty drug trend in 2021 largely recovered from the hit it took from the COVID-19 pandemic in 2020, driven mainly by an increase in utilization. That’s according to the 2022 Artemetrx State of Specialty Spend and Trend Report from Pharmaceutical Strategies Group (PSG), an EPIC company.

Published in August, the report is sponsored by specialty pharmacy Reliance Rx. Findings are based on an Artemetrx analysis of 73.9 million medical claims and 55.1 million pharmacy claims from PSG’s book of business. It is the sixth annual version of the report.