legislation & regulation

Reports Underscore Risk of Failing to Extend Enhanced ACA Subsidies

Recent analyses from the Congressional Budget Office (CBO), Centers for Disease Control and Prevention (CDC), and the Urban Institute all demonstrate the impact that’s been made by the supersizing of Affordable Care Act exchange subsidies — as well as the damage to coverage rates and insurance markets that could be wrought if they aren’t extended past 2025.

The enhanced subsidies have been in place since March 2021 after the passage of the American Rescue Plan Act. They both increased the level of advance premium tax credits available to lower-income individuals (making $0-premium plans widely available to that cohort) and expanded eligibility for APTC to middle-income Americans for the first time.

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What Happens If Enhanced Premium Tax Credits Expire?

If enhanced Affordable Care Act subsidies are extended past 2025, 17.4 million people would receive subsidized coverage next year, compared with 10.2 million if only original advance premium tax credits (APTC) are in place, a recent Urban Institute analysis shows. Meanwhile, four million more uninsured people will be covered in 2025 if the subsidy enhancements are extended.

The enhanced APTCs — which were initially passed as part of the 2021 American Rescue Plan Act and extended as part of the 2022 Inflation Reduction Act — resulted in lower premiums for ACA marketplace enrollees at all income levels and allowed many low-income enrollees to access $0-premium plans. If Congress doesn’t act, the credits will expire at the end of the 2025 plan year.

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With IRA Impacts Looming, Manufacturers Should Focus on Providing Patient Support

Most industry experts likely would agree that certain provisions in the Inflation Reduction Act (IRA), such as a $2,000 out-of-pocket spending cap for Medicare Part D beneficiaries and copay smoothing — known as the Medicare Prescription Payment Plan (M3P) — are no-doubt wins for patients. But other aspects of the law, particularly Medicare drug price negotiations and inflation-based rebates, have prompted disagreements over their ultimate outcomes, with some experts claiming that they will hurt drug development and will prompt more restrictive utilization management among payers. Ultimately, said pharma industry experts during a recent webinar, stakeholders should keep patient support top of mind as they navigate these changes.

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News Briefs: Lawmakers Take Another Stab at Improving Prior Authorization in MA

After the Improving Seniors’ Timely Access to Care Act unanimously passed in the House of Representatives last year but failed to make it through the Senate, leadership from both chambers have reintroduced the bill. The legislation, which aims to streamline the prior authorization process in Medicare Advantage, was reintroduced on June 12 by U.S. Senators Roger Marshall, M.D., (R-Kan.), Kyrsten Sinema (I-Ariz.), John Thune (R-S.D.), Sherrod Brown (D-Ohio), and U.S. Reps. Mike Kelly (R-Pa.), Suzan DelBene (D-Wash.), Larry Bucshon, M.D. (R-Ind.) and Ami Bera, M.D. (D-Calif.). The bill would, among other things, establish an electronic prior authorization process for MA plans including a standard process for transactions and clinical attachments; increase transparency around MA prior authorization requirements and its use; and clarify CMS’s authority to establish timeframes for e-PA requests including expedited determinations and real-time decisions for routinely approved items and services. It would also codify and enhance elements of the Advancing Interoperability and Improving Prior Authorization Processes rule that was finalized by CMS in January, according to the Regulatory Relief Coalition (RRC), which has been advocating for the so-called Seniors’ Act since it was first introduced in 2019. RRC, the American Medical Association, the American Hospital Association, and hundreds of other groups are urging passage of the legislation.

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MedPAC’s June Report Flags Interest in Provider Directory Accuracy

Taking a breather from the continuing debate over Medicare Advantage plan overpayments, the Medicare Payment Advisory Commission (MedPAC) in its latest report to Congress touched on three crucial aspects of MA plan administration: encounter data, prior authorization and provider networks. Within its discussion of the latter, MedPAC pointed to persistent gaps in provider directory accuracy, something that insurance executives during the 2024 AHIP Conference in Las Vegas described as creating a “horrible experience” for members and providers.

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As Insurers Are Sued Over AI Use, Regulators Aim to ‘Get Ahead’ of the Issue

Three major health insurers have denied allegations brought against them in lawsuits pertaining to the use of artificial intelligence in coverage decisions. While The Cigna Group, Humana Inc. and UnitedHealth Group may succeed in getting the cases dismissed, those companies and other payers could continue to face scrutiny over their use of AI, according to Ileana M. Hernandez, a partner at Manatt, Phelps & Phillips, LLP.

“The staggering volume of claims and complexity of claims that insurance plans need to review on a daily basis make insurance reviews an attractive target for using AI,” said Hernandez, who spoke on June 12 during a Manatt webinar. “However, the use of algorithms for review of coverage issues has resulted in questions, concerns, investigations and now lawsuits.”

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News Briefs: CMS Reportedly Plans to Redo MA Star Ratings

In light of recent court rulings, CMS said in a memo released on June 13 that it plans to recalculate the 2024 quality ratings of Medicare Advantage plans. Earlier this month, SCAN Health Plan won a legal challenge to CMS’s calculation of the 2024 Star Ratings in the U.S. District Court for the District of Columbia. That same court also ruled that CMS must recalculate Anthem Blue Cross and Blue Shield of Georgia’s MA Star Ratings. Elevance Health, Inc., the parent company of the Anthem Georgia plan, disclosed in March that CMS had updated its original ratings, which will lead to an additional $190 million in revenue for plan year 2025. In its memo, CMS wrote that it has recalculated the 2024 Star Ratings — which determine 2025 quality bonus payments (QBP) — using the published 2023 Star Ratings cut points. “We have assigned all contracts the recalculated 2024 overall and/or summary Star Ratings if those recalculated ratings result in higher QBP Ratings than what was previously assigned based on the contract’s overall and/or summary 2024 Star Ratings that were released in October 2023,” the agency said.

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News Briefs: State Officials Urge SCOTUS Review of PBM Regulation Case

A bipartisan group of state attorneys general recently filed an amicus brief with the Supreme Court, asking it to review an appeals court decision that limited states’ ability to regulate PBMs. In August 2023, the U.S. Court of Appeals for the Tenth Circuit ruled to block an Oklahoma law that contained provisions such as setting uniform standards for pharmacy networks and banning PBMs from using discounts to drive customers to pharmacies owned by their parent companies. That ruling was the result of a challenge to the Oklahoma law brought by the Pharmaceutical Care Management Association (PCMA). In PCMA v. Mulready, the PBM trade group argued that Oklahoma’s law is preempted by the Employee Retirement Income Security Act of 1974 (ERISA) and the statues governing Medicare Part D. But in their brief urging the Supreme Court to review the case, Minnesota Attorney General Keith Ellison (D) and his colleagues argue that the Tenth Circuit’s broad approach to federal preemption would “severely and unduly impede states’ abilities to protect their residents and regulate businesses.” In a similar case regarding an Arkansas law regulating PBMs, Rutledge v. PCMA, the Supreme Court rejected the PBM trade group’s ERISA-preemption argument.

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At Investor Conferences, Execs Paint PBM Reform as Afterthought

During recent investor conference presentations, executives from major managed care companies expressed little concern that PBM reform — which once seemed like a much more acute threat — will impact their businesses anytime soon. Those remarks come even as a large coalition of interest groups is hoping to push lawmakers into refueling the issue’s momentum.

“I would say it is difficult to get alignment and bipartisan support on the specifics relative to PBM [reform],” CVS Health Corp. CEO Karen Lynch said during a “fireside chat” on May 29 at the Bernstein Strategic Decisions Conference. “I think if anything happens, it'll be on transparency, but you have seen time and time again that there's been some challenges.”

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Illinois’ Looming Step Therapy Ban Is ‘Game Changer,’ Could Start Trend

The Illinois legislature recently passed several health insurance reform regulations, most notably banning step therapy for covered services, prohibiting prior authorization for inpatient mental health services and eliminating short-term health plans. Health policy experts tell AIS Health, a division of MMIT, that the Healthcare Protection Act (HPA) goes further than other state laws by banning step therapy outright — a move other states could opt to follow.

Democratic Gov. JB Pritzker, who proposed the HPA in his fiscal year 2025 budget address in February, is soon expected to sign the act into law. It will apply to Medicaid, Affordable Care Act exchange, fully insured employer sponsored and state employee health plans, but it will exclude self-insured and Medicare plans that are regulated at the federal level.

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