Medical Costs

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.”

CMS Fines 2 Georgia Hospitals for Non-Compliance with Price Transparency Rule

In the first enforcement action since CMS’s Hospital Price Transparency rule went into effect at the start of last year, the agency on June 7 fined two hospitals in Georgia a total of more than $1 million for non-compliance with price transparency requirements. Health policy experts tell AIS Health, a division of MMIT, that they hope CMS ramps up its enforcement efforts, which could help payers, patients, employers and other stakeholders benefit from price comparison and greater competition.

CMS levied an $883,180 penalty against Northside Hospital in Atlanta and a $214,320 fine against Northside Hospital in the Atlanta suburb of Canton, Ga. The penalties were announced the same week that a research letter published in JAMA revealed that only 5.7% of hospitals had complied with the federal transparency rule between six and nine months after the legislation was enacted on Jan. 1, 2021 — the latest in a series of studies drawing similar conclusions.

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Medicare Advantage Organizations Chase ‘Signature Trend’ of Offering Extra Benefits for 2023

Judicious enhancements to supplemental benefits was the common theme as Medicare Advantage organizations prepared their bids for 2023, according to actuaries who recently helped sponsors submit bids that were due on June 6. The benefit changes come as plans considered potential bonus payment losses in 2024 and other possible drivers of increased costs next year.

“The signature trend of this year was carrying forward a lot of the innovative benefits that we’ve seen take hold over the past few years,” remarks Tim Murray, principal with Wakely, an HMA company. These include “wallet” benefits such as over-the-counter card allowances and flexible “choose your own adventure” benefits often involving healthy food and/or groceries, he observes.

Trustees Report Underscores Need for Wholesale Medicare Reform

While the headline takeaway from the latest Medicare Trustees report was that the Hospital Insurance (HI) trust fund will be exhausted two years later than previously projected, industry experts suggest that the report should light a fire under Congress to take swift legislative action to sustain Medicare financing. During a recent webinar hosted by the Bipartisan Policy Center, a panel of seasoned policy experts agreed that the report underscored the need for comprehensive structural reform to the Medicare program, including potential changes to the way Medicare Advantage plans are paid.

Published on June 2, the Medicare Board of Trustees’ annual report provides previous and projected costs for the Medicare program’s two separate trust funds: the Hospital Insurance trust fund (HI), which helps pay for inpatient hospital and other services covered by Medicare Part A; and the Supplemental Medicare Insurance trust fund (SMI), which helps pay for physician, outpatient hospital, home health and other services covered by Parts B and D.

MedPAC Mulls Method of Reducing High-Cost Outlier Impact on Risk Scores

After its last two reports suggested comprehensive reforms to Medicare Advantage plan reimbursement, the Medicare Payment Advisory Commission (MedPAC) in its June report to Congress shifted its MA focus to one area in particular: the potential for high-cost patient outlier data to skew the calculation of risk scores that determine MA plans’ risk-adjusted pay.

Although the Hierarchical Condition Category (HCC) risk adjustment model is intended to produce scores that reflect the relative health status of a plan’s enrollees, fee-for-service (FFS) Medicare spending data that is used to calculate risk scores can include a small group of outliers whose annual costs are much higher than the average costs of patients with a given condition, explained MedPAC Executive Director Jim Mathews during a June 15 web briefing with members of the press.

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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FTC Files Lawsuits to Block Hospital Deals in N.J. and Utah

The Federal Trade Commission (FTC) on June 2 said it had filed lawsuits to block hospital mergers in New Jersey and Utah. Health policy experts tell AIS Health that health insurers and other payers likely will welcome the FTC’s actions as mergers limit competition and lead to higher prices.

The FTC is looking to block HCA Healthcare, Inc.’s acquisition of five hospitals that Steward Health Care owns in Utah. The agency is also aiming to deny RWJBarnabas Health’s purchase of Saint Peter’s Healthcare System, a non-profit that operates a hospital in New Brunswick, N.J. The Utah trial is scheduled to begin on Dec. 13 and the New Jersey trial is scheduled to start on Nov. 29.

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Clover Health Hires New CFO as Firm Aims to Improve Efficiencies, Lower Costs

Medicare Advantage-focused startup Clover Health, which continues to expand its footprint and gain enrollees despite questions about its profitability, will soon have a new chief financial officer. According to a May 25 press release, Scott Leffler will join Clover in August after serving as CFO and treasurer of Sotera Health, where he oversaw the company’s global finance, procurement and IT organizations.

Leffler’s hiring follows several key additions to the company’s management team this year. During the first quarter, Clover Health appointed Conrad Wai as chief technology officer and Joseph Martin as general counsel. And in May, the company hired Aric Sharp as CEO of value-based care. The news of Leffler’s appointment comes after Clover Health spent more than 10 months seeking a replacement for Joe Wagner, who left the company in August 2021 for personal reasons.

Health Insurers, Hospitals Grapple With Inflation, Labor Costs

While inflation hits consumers at car dealerships, airline counters and grocery stores, health insurers and hospitals also are seeing inflationary pressure, particularly with the so-called Great Resignation underway and labor costs skyrocketing.

The Labor Department reported on May 11 that the Consumer Price Index rose 8.3% over the 12-month period that ended in April 2022, down only slightly from the four-decade high of 8.5% reported in March.

“There’s no question that the labor market is tight. So, as you think about inflation, we hear it certainly from our provider partners, and we see it in certain parts of our own business,” Anthem, Inc. CEO Gail Boudreaux told investors during an April 20 conference call to discuss first-quarter 2022 financial results, per The Motley Fool.

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Various Components Play Important Role in Companies’ Definition, Demonstration of Drugs’ Value

As prices for health care services, especially drugs, continue to be under the microscope of public scrutiny, life sciences companies are under pressure now more than ever to make sure that they can demonstrate the value of their products. But this may be easier said than done, as a patient’s perception of value may be quite different than, for example, that of a payer. But these conversations are starting to happen and need to continue to evolve and include all industry stakeholders to truly incorporate value into the equation, say life sciences experts.

According to Daniel C. Lane, Pharm.D., Ph.D., director of US Access Marketing-Customer & Portfolio Value Generation for Bristol Myers Squibb, “Value is something that’s very individualized…If you think about value on a conceptual level, it’s a benefit being received over some type of value-assessment measure…At the elemental level, that’s what we as a life science industry are really trying to understand — how do we communicate that?”