Benefit Management

The U.S. Dept. of Defense recently awarded $136 billion in contracts for its TRICARE program that provides health care benefits to military service members, retirees and their families. The contract award for the West region went to TriWest Healthcare Alliance of Phoenix, which is partnering with Regence health plans and Health Care Service Corp. to administer the program. Humana Government Business Inc. will continue to serve the East region when the next contracts begin in 2024. Currently, Health Net Federal Services LLC, a subsidiary of Centene Corp., covers the West region with about 2.8 million beneficiaries, and Humana covers the East region with more than 6.8 million enrollees. In 2024, six states in the East region — Arkansas, Illinois, Louisiana, Oklahoma, Texas and Wisconsin, with a total of 1.5 million beneficiaries — will transfer to the West region in order to balance out the number of beneficiaries served by the two regions.

A group of Blue Cross and Blue Shield-affiliated companies recently unveiled a new medication contracting organization focused on medical benefit drugs. The new company, known as Synergie Medication Collective, will be successful in improving the affordability of these treatments and patients’ access to them, an industry expert says, but it also will need to show that patients are seeing those savings.

Unveiled Jan. 5, the company says it “is focused on improving affordability and access to costly medical benefit drugs — ones that are injected or infused by a health care professional in a clinical setting — for nearly 100 million Americans.” It will focus not only on infusible treatments for conditions such as cancer but also on multimillion dollar gene therapies. The company says its goal is to “significantly reduce medical benefit drug costs by establishing a more efficient contracting model based upon its collective reach and engagement with pharmaceutical manufacturers and other industry stakeholders.” It plans to “bring to market several new product offerings” this year, among them “transformative value-based models.”

Centene Corp. on Dec. 14 made several C-suite changes in order to “position the company for its next stage of growth.” Ken Fasola, who is currently the firm’s executive vice president of Health Care Enterprises, will be Centene’s new president, while current Executive Vice President and Chief Transformation Officer Jim Murray will become EVP, chief operating officer and report to Fasola. In addition, Dave Thomas will transition from EVP of Markets to CEO of Markets and Medicaid, and President and Chief Operating Officer Brent Layton will become senior adviser to CEO Sarah London “as he begins his transition towards retirement,” the company said.

Separately, Centene on its investor day projected total revenues in the range of $137.4 billion to $139.4 billion and adjusted diluted earnings per share (EPS) in the range of $6.25 to $6.40 in 2023. The firm also said it expects a health benefits ratio (also known as medical loss ratio) of 87.2% to 87.8% next year. “CNC’s ’23 outlook included EPS as expected, though revenue was light,” Jefferies analyst David Windley advised investors in a Dec. 18 research note. He added that Centene’s long-term targets for revenue growth by segment and consolidated EPS growth “are favorable to recent performance, and squarely within a common range across MCOs.”

Plan sponsors’ overall satisfaction with their PBMs was 7.8 on a 1-10 scale in 2022, down from 8.2 last year, according to Pharmaceutical Strategies Group’s 2022 Pharmacy Benefit Manager Customer Satisfaction Report. The report was based on surveys completed by 236 individuals representing employers, unions/Taft Hartley plans, health plans and health systems that covered an estimated 76 million lives. Respondents reported a lower likelihood to recommend their PBM to a colleague or to renew their contract without issuing a competitive request for proposal this year, highlighting costs as the primary driver to leave the PBM.

Among core PBM services, satisfaction was highest for “offering competitive traditional drug discounts” and “meeting financial guarantees.” As clinical and cost management programs play a key role in reducing overall costs, 82% of respondents reported using utilization management, while only 8% used gene therapy financial protection programs.

The share of large employers offering retiree health benefits via Medicare Advantage plans nearly doubled from 2017 to 2022, according to a new analysis of the 2022 Kaiser Family Foundation Employer Health Benefits Survey. Notably, 44% of those firms do not offer any additional health benefit options outside of MA coverage. This shift has emerged as the overall percentage of large firms offering any kind of medical retirement benefit declined dramatically from the 1980s ⁠— KFF found that 66% of large employers offered retiree health benefits in 1988, compared to 21% in 2022.

Of the approximately 30.2 million seniors currently enrolled in Medicare Advantage, more than 5.2 million receive their coverage through an employer-sponsored group MA plan, according to the latest CMS enrollment data. That’s roughly the same proportion of MA enrollees in group plans as last year, when AIS Health reported on the rising popularity of Employer Group Waiver Plans (EGWPs, also commonly referred to as group Medicare). Meanwhile, those offerings are growing as the share of employers sponsoring retiree medical benefits is on the decline, according to recent analysis from the Kaiser Family Foundation, which raised questions about the lack of transparency around these plans and the potential cost implications to the overall Medicare program. But industry experts argue that MA offers value to retirees that they can’t get through traditional, fee-for-service (FFS) Medicare.

Building on previous interoperability regulations, CMS on Dec. 13 published a proposed rule that seeks to improve the efficiency and transparency of prior authorization processes in Medicare Advantage and other federally funded health care programs. Industry experts say the rule should ultimately speed access to care, potentially alleviating some but not all of the concerns expressed by providers, patient advocates and lawmakers about the burden of prior authorization, particularly on seniors.

In issuing the proposed rule, the agency said it withdraws and replaces a previously proposed rule (CMS Interoperability and Prior Authorization Proposed Rule, 85 Fed. Reg. 82586), and addresses public comments received on that rule. Published in December 2020, the aforementioned rule proposed to place new requirements on Medicaid and Children’s Health Insurance Program managed care plans, state Medicaid and CHIP fee-for-service programs, and Qualified Health Plan (QHP) issuers to improve the electronic exchange of health care data, and streamline processes related to prior authorization. The rule included five sets of proposals and five requests for information but did not specifically apply to MA.

The FDA on Nov. 22 approved Hemgenix (etranacogene dezaparvovec-drlb), the first gene therapy for adults with hemophilia B, a genetic bleeding disorder. CSL Behring, the medication’s commercial rights holder, set a list price of $3.5 million, making it the most expensive drug in the U.S.

That price exceeds the $2.96 million health benefit price threshold (HBPB) that the nonprofit Institute for Clinical and Economic Review (ICER) determined recently in an evidence report, meaning it is not cost-effective according to the nonprofit’s guidelines.

Plan sponsors’ overall satisfaction with their PBMs was 7.8 on a 1-10 scale in 2022, down from 8.2 last year, according to Pharmaceutical Strategies Group’s 2022 Pharmacy Benefit Manager Customer Satisfaction Report. The report was based on surveys completed by 236 individuals representing employers, unions/Taft Hartley plans, health plans and health systems that covered an estimated 76 million lives. Respondents reported a lower likelihood to recommend their PBM to a colleague or to renew their contract without issuing a competitive request for proposal this year, highlighting costs as the primary driver to leave the PBM.

Among core PBM services, satisfaction was highest for “offering competitive traditional drug discounts” and “meeting financial guarantees.” As clinical and cost management programs play a key role in reducing overall costs, 82% of respondents reported using utilization management, while only 8% used gene therapy financial protection programs.

As researchers gain growing insight into the mechanics of what makes diseases tick, more and more genetic tests are coming onto the market to help make sure the right patient gets the right drug at the right time. While these diagnostics can help inform diagnosis and treatment for patients, the sheer volume of these tests may be overwhelming payers in their coverage decisions. Stakeholders should work together to help establish the clinical utility that payers need to make coverage decisions on these diagnostics, industry experts say.

Daryl Pritchard, Ph.D., senior vice president of science policy at the Personalized Medicine Coalition (PMC), describes the landscape of coverage for genetic testing as “uneven. Payers are increasingly considering coverage and reimbursement of genetic testing products and services.” However, he tells AIS Health, a division of MMIT, “there remain significant challenges in establishing coverage policies and payment rates for diagnostic tests that reflect the value of their care. As a result, many newer novel diagnostics are under-reimbursed or not covered at all. Such practices ultimately restrict patient access to some needed tests and to optimal care. Coverage and reimbursement policies vary widely among different payers, and decision-making processes are often inconsistent and not transparent.”