Managed Medicaid

The Federal Trade Commission (FTC) ratcheted up regulatory pressure on PBMs once again, announcing that it will apply more scrutiny to PBMs' rebating practices, particularly regarding insulin. The move follows the agency's announcement earlier this month that it would investigate PBM business practices and consolidation. In an official policy statement, the agency wrote that “some have suggested that high rebates and fees to PBMs and other intermediaries may incentivize higher list prices for insulin” and that “rebate and fee agreements may incentivize PBMs and other intermediaries to steer patients to higher-cost drugs over less expensive alternatives.” Actions the agency said it would pursue include cracking down on exclusionary rebates and intensifying scrutiny of formulary design.

South Dakota voters just moved their state one step closer to expanding Medicaid through a ballot initiative, with over 67% of voters rejecting a proposed amendment to the state constitution that would have made Medicaid expansion prohibitively difficult to pass. The founder of a pro-expansion ballot initiative campaign tells AIS Health, a division of MMIT, that he’s optimistic about Medicaid expansion’s chances when it finally comes to a definitive vote in November.

If South Dakota does vote to expand Medicaid in the fall, more than 27,000 people could gain eligibility for the safety-net health insurance program, according to estimates from the Kaiser Family Foundation.

In the latest settlement with a state Medicaid program over its pharmacy benefit practices, Centene Corp. has agreed to pay $13.7 million to the state of New Mexico. Upon referral from the Office of the State Auditor in collaboration with the New Mexico Health Services Dept. — which oversees the Centennial Care Medicaid program — Attorney General Hector Balderas (D) conducted an investigation focused on “concerns that Centene was layering fees and not passing on retail discounts” to the program, according to a June 13 press release from the AG’s office. Centene has spent millions to settle claims by state Medicaid programs that it overcharged them for prescription drugs and is in the process of restructuring its pharmacy benefit management platform.

Several new studies have found that telehealth flexibilities introduced during the COVID-19 pandemic increased access to care for patients who would otherwise struggle to get it. However, the same researchers say that telehealth can’t solve health care disparities on its own — and that lots of work needs to be done to make sure that the incremental improvements made possible by improved telehealth access are durable.

A study published in the May edition of the journal Health Affairs by researchers from Johns Hopkins University found that Medicare patients “living in the most deprived neighborhoods had the highest rates of telemedicine use….Overall, our findings are encouraging, as they suggest that the Medicare telemedicine coverage waiver could improve access to health care for people in the most disadvantaged US neighborhoods without worsening disparities.”

When the Biden administration ends the COVID-19 public health emergency (PHE), states will disenroll millions of Medicaid beneficiaries — and insurers will have to take Medicaid MCO members off their books. Experts tell AIS Health, a division of MMIT, that carriers can take steps to retain some of those members by helping them enroll in Affordable Care Act (ACA) marketplace coverage — but say the number of people who make the switch will be far lower than the number of people who joined the Medicaid rolls during the pandemic (see infographic).

Medicaid and individual exchange enrollment have both boomed with the higher federal funding that was included in the American Rescue Plan Act (ARPA) — and both segments’ total enrollment and enrollee profiles will change significantly when that extra funding ends.

With the COVID-19 public health emergency presumably continuing into October, state Medicaid agencies and their partners theoretically have more time to communicate with enrollees and prepare for the inevitable resumption of eligibility redeterminations once the PHE ends. But ongoing uncertainty over the PHE’s end date presents a host of challenges for states as they handle unprecedented numbers of Medicaid enrollees and attempt to conduct other program work unrelated to redeterminations, according to officials from California, Iowa and North Carolina who spoke during a May 24 webinar hosted by the National Association of Medicaid Directors (NAMD).

Throughout the PHE, which was declared in January 2020 and first renewed that April, states have received a temporary 6.2 percentage-point increase in their Federal Medical Assistance Percentage (FMAP) in exchange for maintaining continuous enrollment of nearly all Medicaid recipients. Once the PHE ends, states have 12 months to initiate eligibility reverifications for everyone enrolled in Medicaid and CHIP and 14 months overall to complete redetermination efforts.

CVS Health Corp.’s Aetna won a new group Medicare Advantage contract to serve retirees covered by Connecticut’s state health plan. Connecticut Comptroller Natalie Braswell on June 1 said the state selected Aetna after a competitive bidding process and that the new contract will save an estimated $400 million over the next three years. Beginning Jan. 1, 2023, Aetna will serve some 57,000 Medicare-eligible retirees and dependents enrolled in the state’s MA plan. Connecticut first adopted an MA plan for retirees in 2018.

After CMS imposed a historic increase to Medicare Part B premiums partly due to cost considerations around Alzheimer’s disease treatment Aduhelm, the agency on May 27 said it will not make a midyear change but will likely lower the Part B premium in 2023. Upon raising the standard monthly premium by $21.60 to $170.10 for 2022, the agency in November said it considered “[a]dditional contingency reserves due to the uncertainty regarding the potential use” of Aduhelm, which was approved in July 2021 and priced at $56,000 per year. After Aduhelm makers Biogen and Eisai, Co., Ltd., cut that price in half starting Jan. 1, HHS Secretary Xavier Becerra instructed CMS to reassess the Part B premium. Meanwhile, the FDA issued a National Coverage Determination stating that Medicare will cover Aduhelm only for patients enrolled in randomized, controlled clinical trials conducted either through the FDA or the National Institutes of Health. CMS recommended incorporating the savings realized from this year’s lower-than-anticipated spending into the 2023 Part B premium determination.

Republican leaders in North Carolina, one of a dozen states that have yet to broaden access to Medicaid programs, say that they are now ready to embrace expansion, which may be a boon to its managed care organizations.

By widening Medicaid eligibility to limits allowed under the Affordable Care Act, North Carolina would enroll an additional 600,000 individuals, a sharp increase over the 2.7 million currently covered under Medicaid in the state, according to a summary of a draft bill first reported on by Axios.

In a May 25 press conference, state Senate leader Phil Berger called Medicaid expansion “the right thing for us to do,” citing the need for coverage for low-income individuals and families and the federal government’s responsibility to pick up 90% of costs for enrollees newly eligible under the expanded coverage guidelines, according to reports.

When the Biden administration ends the COVID-19 public health emergency (PHE), states will disenroll millions of Medicaid beneficiaries — and insurers will have to take Medicaid MCO members off their books. Experts tell AIS Health, a division of MMIT, that carriers can take steps to retain some of those members by helping them enroll in Affordable Care Act (ACA) marketplace coverage — but say the number of people who make the switch will be far lower than the number of people who joined the Medicaid rolls during the pandemic (see infographic).

Medicaid and individual exchange enrollment have both boomed with the higher federal funding that was included in the American Rescue Plan Act (ARPA) — and both segments’ total enrollment and enrollee profiles will change significantly when that extra funding ends.

With radio silence from HHS on May 16 — when states at the very latest had expected to hear whether the COVID-19 public health emergency would end in July — HHS at press time appeared to be gearing up for another extension of the PHE. This will give states, insurers and other stakeholders more time to prepare for the inevitable resumption of Medicaid eligibility redeterminations, which could cause millions of adults and children to lose health insurance coverage.

The PHE has been extended multiple times since the start of the pandemic and remains a moving target. As a condition of receiving enhanced federal funds during the PHE, states have been required to ensure continuous Medicaid and CHIP coverage for most enrollees by pausing eligibility redeterminations. And the Biden administration has promised to provide states 60 days’ notice before any possible termination or expiration. But without such notification, sources estimate the next end date could be Oct. 13. Bloomberg on May 16 reported that the PHE would be extended past mid-July, “according to a person familiar with the matter.”