Benefit Management

Plans Are Likely to Treat Paxlovid Like Other Drugs if U.S. Isn’t Paying

With COVID-19 infections surging once again, the Biden administration has stepped up efforts to increase the supply of Paxlovid, the Pfizer Inc. antiviral that garnered emergency use authorization as a therapeutic treatment for the coronavirus. However, increased availability for Paxlovid might end in coming months — Congress has stalled on providing the increased COVID-19 response funding that the administration requested, and experts say health plans are likely to treat the drug like any other if the federal government isn’t picking up the tab for treatments.

The Biden administration has pushed in recent weeks to increase the availability of Paxlovid, free of charge, to COVID-19 patients. On May 26, the White House released a statement touting the rollout of more than 2,500 “test-to-treat” sites where free testing and Paxlovid courses are available, along with 40,000 locations where antivirals are available for patients. The administration also noted that it had “increased the number of people benefiting from oral antivirals in the last seven weeks, from about 27,000 prescriptions filled each week to more than 182,000 last week.”

Judge Strikes Down ‘Accumulator Rule,’ Ending Potential Threat to Patient Assistance

A U.S. district court judge has struck down a CMS rule that would have narrowed the exclusions from Medicaid best price for manufacturer-provided patient-assistance programs. The rule, which was set to go into effect on Jan. 1, would have required drugmakers to determine exactly where their patient assistance is going. If 100% of it was not reaching the patient — particularly via copayment accumulators and maximizers when payers are taking this assistance rather than allowing it to count toward patients’ deductibles and out-of-pocket maximums — that assistance would need to have been included in Medicaid best price and average manufacturer price (AMP) calculations for prescription drugs. This decision, as well as a recent pharma lawsuit against a maximizer company, may spur more pushback against these copay programs, one industry expert tells AIS Health, a division of MMIT.

The Medicaid rebate rule allows state Medicaid programs to get the same discounts on drug prices that manufacturers offer commercial plans purchasing prescription drugs. Manufacturers pay rebates to Medicaid programs that are calculated based on drugmakers’ best price, which is the lowest price the manufacturer gives to most providers of health care services or items, including hospitals, HMOs and MCOs — but not patients. It includes any price adjustments, such as discounts and rebates, but not manufacturer-provided assistance to patients.

Marketplace MLR Rebates Likely to Drop After Record Highs

Health insurers will likely issue about $1 billion in medical loss ratio (MLR) rebates this year, according to data from the Kaiser Family Foundation (KFF) and Mark Farrah Associates. That amount is a drop from both 2020 and 2021, which set the all-time highs for MLR rebates disbursed since the Affordable Care Act came into effect. Experts tell AIS Health, a division of MMIT, that the dropoff in rebates is related to pandemic utilization and a more stable policy environment for the individual marketplace.

Health plans selling insurance on the individual, small group and fully insured large group markets are required to return any premium revenue that is not spent on care (or care quality improvements) to members.

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Judge Strikes Down CMS’s So-Called ‘Accumulator Rule’

A U.S. district court judge has struck down a CMS rule that would have narrowed the exclusions from Medicaid best price for manufacturer-provided patient-assistance programs. The rule, which was set to go into effect on Jan. 1, would have required drugmakers to determine exactly where their patient assistance is going. If 100% of it was not reaching the patient — particularly via copayment accumulators and maximizers when payers are taking this assistance rather than allowing it to count toward patients’ deductibles and out-of-pocket maximums — that assistance would need to have been included in Medicaid best price and average manufacturer price (AMP) calculations for prescription drugs. This decision, as well as a recent pharma lawsuit against a maximizer company, may spur more pushback against these copay programs, one industry expert tells AIS Health, a division of MMIT.

Looking to 2023, Employers Focus Benefit Changes on Specialty

Now that many large employers have finalized employee health benefits for 2023, some clear trends are emerging, pharmacy benefit consultants tell AIS Health. Among them: many plan sponsors have traditional drug benefits on auto-pilot but are hyper-focused on high-cost specialty drugs.

For non-specialty drugs, the cost trend is pretty flat, says Paul Burns, a pharmacy practice leader at the HR consulting firm Buck. “There’s been some increases over the pandemic, but it’s not wildly spiking — and that’s where 98% of the utilization is.”

Plans Should Strive for ‘Seamless’ Digital Engagement

Health insurers have ramped up their use of digital tools to improve customer satisfaction, but still have more work to do — particularly as utilization returns to normal two years after the pandemic’s start. Customer satisfaction is lagging after several years of improving scores, and digital tools are disappointing some enrollees.

J.D. Power’s 2022 U.S. Commercial Member Health Plan Study identified call center customer support and digital tools as “key areas in need of improvement,” the advisory firm said May 26. “Health plan members expect a personalized, hands-on experience when dealing with customer support and they expect a seamless digital experience when engaging online. Health plans have some work to do to get the formulas right,” said Christopher Lis, managing director, global healthcare intelligence at J.D. Power.

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Do Pharma/PBM Contracts Play Role in Drugmakers’ Revenue Leakage?

Pharma manufacturers depend on contracts with PBMs — and, increasingly, their group purchasing organizations (GPOs) — to ensure favorable formulary positioning with PBMs’ health plan and employer clients. But as those contracts have grown more complex and less transparent, drugmakers may be at risk of losing significant amounts of money, according to some industry experts.

Revenue leakage — unintended revenue loss because of process inefficiencies — can be a huge financial drain on pharma manufacturers. It also may potentially result in compliance risks with the Anti-Kickback Statute and its discount safe harbor protections, “so it always has to be clearly defined as to what the rebate or any monies between pharma and the PBM being exchanged; there has to be a reason,” explains Stephanie Seadler, vice president of Trade Relations at EmsanaRx.

Novartis’ Pluvicto Brings New Mechanism of Action to mCRPC Options

A new prostate cancer drug is sparking interest among payers and oncologists alike, according to a survey by Zitter Insights. While the product offers a new mechanism of action for the indication, the manufacturer recently halted production of the therapy temporarily in two of its three global sites “out of an abundance of caution” due to “potential quality issues” that could pose a glitch in initial uptake of the therapy.

On March 23, the FDA approved Novartis Pharmaceuticals Corp.’s Pluvicto (lutetium Lu 177 vipivotide tetraxetan) (formerly referred to as 177Lu-PSMA-617) for the treatment of prostate-specific membrane antigen (PSMA)-positive metastatic castration-resistant prostate cancer (mCRPC) in people who have been treated with androgen receptor pathway inhibition and taxane-based chemotherapy. The product from Novartis unit Advanced Accelerator Applications USA, Inc. is the first FDA-approved targeted radioligand therapy for eligible people with mCRPC that combines a targeting compound with a therapeutic radioisotope.

OIG Report on Prior Authorization Denials Puts Pressure on CMS

As Medicare Advantage insurers face increasing scrutiny from lawmakers over coding practices and a pending pay boost of 8.5% next year, a new HHS Office of Inspector General report on rates of prior authorization and payment denials in MA doesn’t do much to help their case. Although it was based on just a weeklong sample of denial cases, the report adds to a growing body of evidence that the prior authorization process in MA is ripe for improvement and in need of either more guidance from CMS and/or stronger oversight.

Receiving widespread coverage at press time, starting with a New York Times article summarizing it as “saying that insurers deny tens of thousands of authorization requests annually,” OIG on April 28 released a report titled, “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care.” The report immediately drew praise from providers, such as the American Medical Association (AMA), which issued a statement agreeing with federal investigators’ recommendations on reining in inappropriate denials. But AMA argued that more needs to be done, such as passing a bipartisan bill that aims to establish new electronic prior authorization (PA) requirements on MA insurers.

Poor Mental Health Care Access Increases Systemic Costs

Health insurers have long struggled to administer behavioral health benefits, which won’t get easier any time soon: Demand for mental health services is high due to the opioid crisis and the mental health strains of the COVID-19 pandemic. Experts from clinical, financial and policy backgrounds say that coordinating behavioral health care with traditional medical benefits — and bringing behavioral health care providers into insurer networks — are both essential to managing costs and ensuring access to care.

Despite decades of policymaking that has attempted to streamline access to mental health care benefits, most notably through mental health parity, mental health care remains expensive and hard to access. (Several federal laws mandate mental health care parity: Health plans are not allowed to impose benefit limitations on mental health care that are more severe than limits placed on medical and surgical benefits.) What’s more, mental health care providers are usually siloed from other clinicians on a patient’s care team, which tends to exacerbate medical conditions and increase costs.

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