Policy & Politics

Drug Price Negotiation Will Require New CMS Regulations, Staffing

Now that Medicare can negotiate the price of prescription drugs it purchases, the Biden administration needs to figure out how it will hash out deals with drugmakers. Experts tell AIS Health, a division of MMIT, that implementation of the long-sought negotiation program will come with plenty of challenges and pitfalls.

The administration will have to issue new regulations, hire hundreds of staff, determine which drug prices will be negotiated first and design the criteria that will select drugs for negotiation in the future.

New Suit Claims Copay Accumulators Violate ACA, but Will Judge Agree?

In a newly filed lawsuit, three patient groups are challenging a federal regulation that allows what they call an “evil money grab” by health insurers and PBMs: copay accumulator adjustment programs. The lawsuit contends that the rule violates both the Affordable Care Act and the Administrative Procedure Act, and legal experts tell AIS Health that it’s still an open question whether those claims will prevail.

The rule in question is the 2021 Notice of Benefit and Payment Parameters (NBPP), an omnibus regulation issued annually that chiefly sets ground rules for the ACA marketplaces. It drew the ire of groups that represent patients with chronic conditions by allowing individual and group health plans to implement copay accumulator adjustment programs, which prevent patients from counting the value of drug manufacturer coupons toward their deductibles or out-of-pocket payment limits. Drugmakers often offer coupons for pricey branded drugs — a practice that they say helps increase access to vital medications. But insurers contend that such coupons push consumers toward high-priced medicines, forcing health plans to raise premiums across the board to compensate.

RFI Commenters Envision More Plan Flexibility, Improved Transparency in MA

After giving stakeholders a month to formulate their thoughts on how best to address a variety of aspects of the Medicare Advantage program, CMS received nearly 4,000 comments on its request for information (RFI). An AIS Health review of select letters reveals comments on a multitude of hot-button topics including beneficiary decision-making, marketing practices and plan oversight, and MA reimbursement.

CMS published the MA-focused RFI on Aug. 1 and asked for input by Aug. 31. The sprawling request asked commenters to consider dozens of questions on key topics such as health equity, risk adjustment, social determinants of health (SDOH), supplemental benefits and value-based care.

Federal Judge Strikes Down ACA’s Coverage Mandate for PrEP Drugs

A federal judge on Sept. 7 ruled that the Affordable Care Act’s requirement that individual and group health plans must cover pre-exposure prophylaxis (PrEP) medications to prevent HIV violates the religious freedom of objecting employers. The ruling is not likely the final salvo in a case that challenged the ACA’s entire preventive service coverage mandate, but it did spark outcry from one advocacy group representing HIV-positive patients.

The case in question, now known as Braidwood Management Inc., et al v. Becerra, argues that Section 2713 of the ACA — which mandates coverage of preventive services recommended by the U.S. Preventive Services Task Force (USPSTF), the Advisory Committee on Immunization Practices and the Health Resources and Services Administration — is unconstitutional. It also challenges coverage mandates for specific preventive care, namely PrEP and some contraceptive methods, on religious freedom grounds.

New Suit Claims Copay Accumulators Violate ACA, but Will Judge Agree?

In a newly filed lawsuit, three patient groups are challenging a federal regulation that allows what they call an “evil money grab” by health insurers and PBMs: copay accumulator adjustment programs. The lawsuit contends that the rule violates both the Affordable Care Act and the Administrative Procedure Act, and legal experts tell AIS Health that it’s still an open question whether those claims will prevail.

The rule in question is the 2021 Notice of Benefit and Payment Parameters (NBPP), an omnibus regulation issued annually that chiefly sets ground rules for the ACA marketplaces. It drew the ire of groups that represent patients with chronic conditions by allowing individual and group health plans to implement copay accumulator adjustment programs, which prevent patients from counting the value of drug manufacturer coupons toward their deductibles or out-of-pocket payment limits. Drugmakers often offer coupons for pricey branded drugs — a practice that they say helps increase access to vital medications. But insurers contend that such coupons push consumers toward high-priced medicines, forcing health plans to raise premiums across the board to compensate.

Multiple States Set Sights on Medicaid Expansion in Coming Election; Millions Could Gain Eligibility

About 3.7 million people could gain access to health care if the current 12 nonexpansion states were to fully implement a Medicaid expansion in 2023, according to a recent Urban Institute analysis.

In the upcoming gubernatorial elections in November, Medicaid expansion could be a key issue in several nonexpansion states, including Wisconsin, Kansas and Georgia. All three states had several failed attempts to fully expand Medicaid eligibility.

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As States Seek to Regain Control of MA Marketing, Senate Launches Probe Into Plan Practices

As CMS urges Medicare Advantage insurers to tighten up their oversight of third-party marketing organizations (TPMOs) and as state insurance regulators seek to regain authority over MA marketing that was transferred to CMS nearly 20 years ago, Sen. Ron Wyden (D-Ore.) wants answers about “potentially deceptive marketing tactics practiced by Medicare Advantage plans.” His investigation could signal legislative interest in returning MA marketing oversight to states, but some industry experts question whether breaking up the CMS-owned process would be in the best interest of beneficiaries.

In letters sent last month, the Senate Finance Committee chairman wrote to 15 state insurance commissioners and State Health Insurance Assistance Programs (SHIPs) expressing his concern about reports of increased beneficiary complaints regarding MA and Part D plan marketing materials and “alarming reports that MA and Part D health plans and their contractors are engaging in aggressive sales practices that take advantage of vulnerable seniors and people with disabilities.”

Insurers Brace for When U.S. Stops Buying COVID-19 Vaccines, Therapeutics

The federal government will stop purchasing COVID-19 vaccines and therapeutics as soon as this fall, Biden administration officials said recently — meaning payers will have to procure vaccines and treatments like any other commercial pharmaceutical product. Health care experts tell AIS Health, a division of MMIT, that the move is likely to make vaccines and therapeutics less accessible and introduce dispensing costs that could drive up premiums.

The Biden administration is transitioning away from the “acute emergency phase where the U.S. government is buying the vaccines, buying the treatments, buying the diagnostic tests. We need to get out of that business over the long run,” White House Coronavirus Response Coordinator Ashish Jha, M.D., said during an Aug. 16 event organized by the U.S. Chamber of Commerce.

News Briefs: Medicare Negotiation Will Cost Pharma Manufacturers

Moody’s on Aug. 19 released a report “stating that the drug pricing provisions in the Inflation Reduction Act of 2022 are credit negative for the pharmaceuticals industry, as the savings to the federal government and consumers will generally be borne by the industry,” the credit rating firm said. The most substantial impact on drug manufacturers will come from the IRA’s Medicare provisions, which the report observes are “estimated to save the US government $102 billion over 10 years. This cost will fall largely to the industry, as will the price curbing provisions and the reduction in the beneficiary out-of-pocket costs.” Moody’s also expects pharma’s early-stage transaction trend to accelerate: “One implication of the Inflation Reduction Act will be an increase in industry-wide acquisitions, as companies will seek ways to improve longer-term growth rates, given pressure on earnings growth that will result from the legislation. By acquiring companies with promising pipeline-stage products, pharmaceutical companies can increase the number of future drug launches to drive higher earnings.”

FTC Fines Broker for Pushing ‘Sham’ Health Insurance Plans

Benefytt Technologies, Inc., a health insurance brokerage controlled by private equity firm Madison Dearborn Partners, LLC, will refund its customers $100 million after the Federal Trade Commission (FTC) found Benefytt knowingly defrauded consumers shopping for Affordable Care Act marketplace plans. Health care experts tell AIS Health, a division of MMIT, that similar schemes involving deceptive and exploitative sales tactics are now a common problem.

The FTC said in a press release that Benefytt misrepresented bundles of short-term, limited duration (STLD) plans and supplemental health insurance products as comprehensive plans that meet the ACA’s standard benefits requirements. Benefytt’s marketing practices were misleading, the FTC said, and involved “lying to consumers about their sham health insurance plans and using deceptive lead generation websites to lure them in.” According to the FTC complaint, Benefytt also “illegally charged people exorbitant junk fees for unwanted add-on products without their permission.”

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