Medical Costs

West Coast Public Sector Plan Sponsors Will Coordinate More Closely Through Purchaser Group

The Purchaser Business Group on Health (PBGH) for the first time has created a public purchaser advisory committee. The decision, part of the purchaser group’s newly announced five-year plan, is meant to align the needs of its public members and integrate them with private purchasers.

PBGH is a nonprofit coalition representing nearly 40 public and private purchasers that collectively spend $350 billion annually on health care services. While the group’s members include major corporations such as Apple, Inc., Microsoft Corp. and the Walt Disney Co., PBGH is different from other purchasing organizations in that it also represents public purchasers, according to Elizabeth Mitchell, PBGH’s chief president and chief executive officer.

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Private Plans in Michigan Stall Under CPC+ Model

A primary care reform model in Michigan failed to deliver intended cost savings and quality improvements among two private payers, casting doubt on whether current value-based model designs in the primary care space have the muscle to exert real benefits.

A study published in the September issue of Health Affairs analyzed the spending and quality results of two large insurers in Michigan that offered a payment reform model designed after the federal Comprehensive Primary Care Plus (CPC+) program. The results were muted: Among the private payers involved, the CPC+ model failed to reduce total spending; the results indicate that, when accounting for care management fees, spending actually rose under the CPC+ program. On the quality side, performance remained unchanged between CPC+ and non-CPC+ participants.

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Study: Pharma Companies Often Profit From Donations to Patient Assistance Charities

Pharmaceutical companies often profit from their donations to non-profit patient assistance charities that are intended to help people afford high-cost medications, according to a study published in this month’s edition of the journal Health Affairs.

HHS’s Office of Inspector General (OIG) has provided guidance on the charities and cracked down in recent years on several charities and drug manufacturers. However, the authors noted that “the current regulations or enforcement permit donations that violate the spirit of Medicare’s Anti-Kickback Statute,” which prohibits pharma companies from covering Medicare Advantage enrollees’ out-of-pocket drug spending for the drugs they manufacture.

News Briefs: Home Depot Appeals Settlement With BCBSA

The Home Depot, Inc. and two other employers — Topographic and Employee Services Inc. — have appealed a $2.67 billion settlement reached in connection with a class-action lawsuit against the Blue Cross Blue Shield Association (BCBSA). The litigation, which has been ongoing since 2012, challenges Blues plans’ agreement to divide the country among the association’s 36 members and to restrict members’ ability to offer non-Blues products, alleging that constitutes anticompetitive behavior. The decision to appeal the settlement could delay the disbursement of funds as well as the changes expected to come about from the settlement, which could give Blues plans more freedom to collaborate and consolidate, experts told AIS Health in 2020. A federal judge signed off on the settlement in August.

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Armed With Transparency Data, Purchaser Groups Focus on Rising Prices

Amid growing medical cost trend and broad fears of inflation, two major purchaser groups have unveiled initiatives to coordinate plan sponsors in an effort to lower health care prices. Managed care experts tell AIS Health, a division of MMIT, that purchasers’ frustration with high prices are valid, but they don’t expect prices to come down any time soon with inflation and other macroeconomic trends set to wash over the health care sector.

The National Alliance of Healthcare Purchaser Coalitions (NAHPC) recently released a “playbook” white paper for regional purchaser groups and employers seeking to rein in price increases. The term purchaser coalition refers to a number of regional nonprofits across the country that are composed of the region’s largest employers; those groups comprise NAHPC’s membership. NAHPC’s largest member, the Purchaser Business Group on Health (PBGH), also rolled out a new plan to manage costs.

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Medicare Advantage Plans Pay Higher Prices Than CMS for Dialysis Care

A new study published in Health Affairs urged government leaders to limit market consolidation among the largest dialysis providers as more and more seniors choose Medicare Advantage over fee-for-service (FFS) Medicare. Analyzing 2016 and 2017 outpatient Medicare claims data, the study authors found that MA organizations paid inflated costs for dialysis services compared to what FFS Medicare would have paid, especially to large national dialysis organizations — where the majority of patients receive treatment. Notably, MA plans’ median cost for in-network hemodialysis (the most common form of the therapy) was $301, which was markedly higher than the $232 median cost for out-of-network treatments. Findings were similar for peritoneal dialysis, the less common form of dialysis.

Overall, MA plans paid 131% of the FFS price for in-network hemodialysis at large chains, compared to 120% of the FFS price at regional chains, and they paid 112% of the price at independently owned facilities. These markups were also found for in-network peritoneal dialysis but were not observed for out-of-network services.

Health Systems May See More Savings With Medicare Advantage vs. Medicare ACOs

A new study published in JAMA Network Open raises questions about whether health systems can actually achieve significant savings through the Medicare Shared Savings Program (MSSP), or if Medicare Advantage could be a better bet. To identify spending patterns in MA and MSSP’s Accountable Care Organizations (ACOs), researchers studied the characteristics and claims data of about 16,000 Medicare patients at Ochsner Health System (OHS), a large, academic system in Louisiana, from 2014 to 2018. Ochsner joined MSSP in 2013, and its ACO hosts more than 2,200 providers. It also offers MA plans via a partnership with Humana Inc.

News Briefs: UnitedHealth, Walmart Ink Medicare Advantage Deal

UnitedHealth Group on Sept. 7 unveiled a “10-year, wide-ranging collaboration” with Walmart Inc., which will start in 2023 with 15 Walmart Health locations in Florida and Georgia. UnitedHealth’s Optum division will provide Walmart Health clinicians with “analytics and decision support tools” to help them improve outcomes for Medicare beneficiaries, and the two firms will offer a co-branded Medicare Advantage plan starting in January called UnitedHealthcare Medicare Advantage Walmart Flex (HMO-POS). Commercial health plan members with UnitedHealthcare’s Choice Plus PPO plan will also have in-network access to Walmart Health Virtual Care, effective in January. “Eventually, the collaboration aims to serve even more people, including those across commercial and Medicaid plans, by providing access to fresh food and enhancing current initiatives to address social determinants of health, over-the-counter and prescription medications, and dental and vision services,” stated a UnitedHealth press release.

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Johnson & Johnson Files Lawsuit Against Copay Maximizer Company SaveOnSP

Multiple companies that provide alternate funding options for patients have been launching over the last several years. But one maximizer company has found itself the target of a legal battle with manufacturer Johnson & Johnson over its strategy to reclassify drugs and maximize the copay assistance it gets from pharma manufacturers.

Copay maximizers have companies classify some drugs as “non-essential health benefits” (NEHBs) as outlined in the Affordable Care Act (ACA). They then secure patient assistance for these drugs through manufacturers’ or charitable foundations’ patient assistance programs, taking the full annual amount of assistance per drug and spreading out that money over the course of the year (see story). The programs are seen as follow-on offerings to copay accumulators, which take the maximum assistance up front and deplete the contribution before the end of the year.

Copay Maximizer Programs Are Coming Under Fire

Multiple companies are offering copay maximizer — also known as variable copay — programs. And while they may be attractive to firms that implement them, a closer look might reveal them to be not as appealing as they seem at first blush, say industry experts. The programs also are being challenged in legal settings, including a lawsuit by manufacturer Johnson & Johnson against SaveOnSP (see story).

Traditionally, when a manufacturer provides copay assistance for one of its drugs, that dollar amount would count toward the patient’s deductible and out-of-pocket maximum. But copay maximizer programs will distribute 100% of available manufacturer copay offset funds over 12 months, as opposed to copay accumulators, which apply the maximum manufacturer assistance up front and deplete that contribution before the end of the year. Payments in both approaches do not count toward members’ deductibles and out-of-pocket maximums.