As part of a sweeping new Medicare Advantage rule, CMS recently proposed a policy aimed at reforming a reimbursement system that local pharmacies have long claimed is straining them to the breaking point. PBMs, on the other hand, argue that the proposal could hamper value-based contracting in Part D and potentially increase Medicare spending.

At issue are arrangements in which Part D plan sponsors can recoup money from pharmacies for dispensed drugs if the pharmacies do not meet certain metrics. Generally speaking, these payments to plan sponsors are known as price concessions, and when assessed retrospectively — as they currently are — they are counted as direct and indirect remuneration (DIR).

New research conducted by Avalere on behalf of the Better Medicare Alliance (BMA) suggests Medicare Advantage plans aid in earlier detection of type 2 diabetes and that seniors diagnosed with type 2 diabetes generally fare better than similar patients in fee-for-service (FFS) Medicare. Specifically, lower medical spending and rates of inpatient hospitalizations/emergency department visits observed by researchers may be particularly compelling for policymakers as they consider the overall value of the MA program.

With MA serving more seniors than ever before — having just reached a milestone of enrolling more than 30 million Medicare-eligible beneficiaries — and one-third of seniors estimated to have a diagnosis of type 2 diabetes, it is important to look at how these patients’ care differs in MA vs. traditional Medicare, asserted Matt Kazan, managing director with Avalere, during a Jan. 12 webinar hosted by BMA. In many cases, there are “major differences,” he noted.

About 800,000 Medicare beneficiaries in 2024 and 200,000 in 2025 could see their out-of-pocket (OOP) medication costs exceed 10% of their annual income, even with the Part D drug benefit reforms passed via the Inflation Reduction Act (IRA), according to an Avalere analysis.

The IRA will establish a beneficiary OOP cap at the catastrophic threshold, which is estimated to be $3,233 in 2024. Avalere estimated that 1.5 million Part D enrollees without low-income subsidies (LIS) are projected to reach OOP drug spending levels above the catastrophic threshold in 2024. Among them, about 18% of beneficiaries will reach the catastrophic phase in the first three months. Greater shares of beneficiaries who are younger than 65 years old or who are Hispanic will face affordability challenges compared to the average non-LIS enrollees. The analysis also suggested that non-LIS enrollees taking asthma drugs, blood thinners, immunology therapies, cancer treatments and HIV drugs are more likely to reach the OOP cap in 2024.

The coming year is unlikely to see any major new policy developments come out of the split Congress, but health insurers and other stakeholders will have their hands full figuring out the implications of the Inflation Reduction Act’s (IRA) Medicare drug price negotiation policy, according to a Jan. 18 panel of Avalere Health experts.

Last November’s election led to divided control of Congress, with Republicans in control of the House of Representatives and Democrats in control of the Senate. Given that, “the activity this year, over the next two years, is going to look quite a bit different than we saw in Congress from the previous two years,” said Matt Kazan, managing director at Avalere.

The pharmaceutical industry and the broader health care services market currently are experiencing a series of trends that are likely to persist into 2023, said Adam J. Fein, Ph.D., CEO of Drug Channels Institute, during a Dec. 16 webinar titled Drug Channels Outlook 2023. These include pressure on insurers’ traditional coverage of generics from patient-paid prescriptions, ongoing 340B litigation and providers’ increased presence within the specialty pharmacy market. But the impact of the biggest disruption, the Inflation Reduction Act (IRA), is yet to come. In this second of a two-part series, AIS Health highlights these trends projected by the longtime industry expert.

New research conducted by Avalere on behalf of the Better Medicare Alliance (BMA) suggests Medicare Advantage plans aid in earlier detection of type 2 diabetes and that seniors diagnosed with type 2 diabetes generally fare better than similar patients in fee-for-service (FFS) Medicare. Specifically, lower medical spending and rates of inpatient hospitalizations/emergency department visits observed by researchers may be particularly compelling for policymakers as they consider the overall value of the MA program.

With MA serving more seniors than ever before — having just reached a milestone of enrolling more than 30 million Medicare-eligible beneficiaries — and one-third of seniors estimated to have a diagnosis of type 2 diabetes, it is important to look at how these patients’ care differs in MA vs. traditional Medicare, asserted Matt Kazan, managing director with Avalere, during a Jan. 12 webinar hosted by BMA. In many cases, there are “major differences,” he noted.

When it comes to chasing high ratings and quality bonus payments to help them stay competitive, Medicare Advantage and Part D plan sponsors this year may be forced to overhaul their current strategies and investments if CMS finalizes a host of recently proposed changes. In addition to implementing a new outlier methodology that will drive up cut points and make it harder for plans to achieve 4 stars next fall, CMS last month issued a sweeping rule proposing policy and technical changes across the MA and Part D programs for contract year 2024. That rule included multiple proposals aimed directly at the stars program, such as the creation of a health equity index for the 2027 Star Ratings and the addition of several new measures to the 2026 Star Ratings.

Exceeding 950 pages in its initial prepublication version, CMS’s most recent rule proposing policy and technical changes for contract year 2024 is the Biden administration’s most complicated and sweeping Medicare Advantage and Part D rule to date. Following a comprehensive request for information issued last summer on various aspects of the MA program, the rule addressed many of the same hot-button topics — from health equity and misleading marketing to behavioral health and prior authorization — that CMS asked about in the RFI. Additionally, the rule proposed major reforms to the Star Ratings and contained meaningful clarifications for MA Special Needs Plans (SNPs).

As multiple biosimilars to AbbVie’s Humira (adalimumab) are set to hit the market in 2023, two of the largest pharmacy benefit managers (PBMs) in recent weeks made favorable coverage decisions for the soon-to-debut drugs. The FDA has approved seven Humira biosimilars so far, with Amgen’s Amjevita set to launch first, in January 2023. Bloomberg on Nov. 15 reported Optum Rx will cover up to three of the new biosimilars on the same tier as Humira on its 2023 formularies, while Cigna Corp.’s Express Scripts on Dec. 5 said it will cover the biosimilars as preferred products on its “largest formularies.” The PBM said it will “continue to evaluate all biosimilar products to Humira….and will provide updates related to specific changes as available.” Combined, the two PBMs and their corresponding payer units cover nearly 15 million people on their Medicare formularies, according to data from MMIT Analytics (MMIT is the parent company of AIS Health). Most people (86%) covered under Medicare formularies have access to Humira on the specialty tier, with utilization management restrictions such as step therapy and prior authorization.

As Programs of All-Inclusive Care for the Elderly (PACE) grow across the U.S., sponsoring entities can expect CMS to put additional scrutiny on their operations. New PACE organizations are subject to audits in their first three years of operation, and updated audit protocols for 2023 include expanded collection of data around both the clinical services provided to participants as well as the non-clinical program features such as transportation, according to BluePeak Advisors, a division of Gallagher Benefit Services, Inc. This will require significantly more man hours and readiness on the part of the sponsoring PACE organization, adds BluePeak, which helps PACE organizations and Medicare Advantage organizations prepare for audits.