Policy & Politics

Panelists Take Stab at Fixing the Medicare Advantage Payment Problem

Citing a Medicare Payment Advisory Commission (MedPAC) estimate that the government pays about 22% more for Medicare Advantage enrollees than it would if they were enrolled in traditional Medicare, participants in a July 10 panel discussion all agreed that the way MA plans are paid needs to be fixed. However, those panelists — each with ties to MedPAC — had very different views about what those changes should look like, underscoring how difficult it will be to get stakeholders to agree on any reforms even as scrutiny of MA intensifies.

“What’s the diagnosis — in other words, what problem are we trying to solve?” Francis Crosson, M.D., queried during the Virtual Fifth National Medicare Advantage Summit, which was livestreamed from July 9-12. “Is it that the current MA payment methodology is fatally flawed and must be replaced now? Or, MA costs the Treasury too much compared to traditional Medicare? Or, MA costs too much because of a broken risk adjustment process, which if fixed, would solve the cost problem?”

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Experts Challenge Specter of ‘Widespread’ ACA Enrollment Fraud

In recent letters to two federal watchdog agencies, Republican leaders of key House committees demand an investigation into “widespread” improper enrollment in Affordable Care Act exchange plans, citing the findings of a paper from Paragon Health Institute, a right-leaning think tank.

Health policy experts who spoke to AIS Health agree that that there are incentives for enrollees — and the brokers who help them find coverage — to estimate their income in such a way that they will qualify for the richest ACA subsidies. However, they aren’t convinced that there’s large-scale enrollment fraud taking place.

In their paper, the Paragon researchers estimate that 4 million to 5 million people are improperly enrolled in $0-premium (or fully subsidized) ACA exchange plans as of 2024, costing taxpayers between $15 billion and $20 billion.

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Study Outlines Limits on Medicaid-to-ACA-Plan Pipeline

As states resumed their Medicaid eligibility redeterminations last spring, some experts suggested that officials should prioritize helping Medicaid managed care (MMC) enrollees who were losing coverage enroll in a plan from the same carrier in the Affordable Care Act (ACA) individual marketplace. Private insurers like Centene Corp. have also emphasized this strategy, with the goal of stemming member attrition. However, a new study from Health Affairs suggests that “a within-carrier transition is likely to be possible only for roughly half of Medicaid managed care enrollees.”

By examining Clarivate’s InterStudy enrollment data from 2021, researchers found that in 2021, 52.1% of MMC members were enrolled by a carrier that also had a plan on the ACA marketplace in the same county. Among all MMC enrollees, 24.5% were in counties where the largest insurer was the same in both Medicaid and the ACA marketplace. In 10.3% of the 2,625 counties with MMC, all MMC enrollees were in a plan offered by an insurer that also had a marketplace plan.

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Shot and Chaser: FTC Issues PBM Report, Reportedly Plans Lawsuit

When the Federal Trade Commission on July 9 released an interim report based on its yearslong investigation of PBMs, criticism of the document abounded, with even an FTC Commissioner saying it wasn't nearly comprehensive enough to publish. However, one day later the FTC appeared to prove its critics wrong, with the Wall Street Journal reporting that it plans to sue the three largest PBMs over their business practices related to the rebates they negotiate with drug manufacturers for products like insulin.

The FTC has not yet confirmed the WSJ report, which cited a person familiar with the matter. But it would not be the first time the federal government attempted to reform how PBMs treat drug rebates. The Trump administration proposed a rule in 2019 that would have effectively forced PBMs to pass negotiated rebates on to consumers at the point of sale in Medicare Part D and managed Medicaid, but it later tabled the regulation.

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FTC’s First Shot at PBMs Leaves Many Industry Critics Wanting More

When the Federal Trade Commission (FTC) on July 9 released an interim report based on its yearslong investigation of PBMs, criticism of the document was in no short supply.

The trade group representing major PBMs, the Pharmaceutical Care Management Association (PCMA), said the report “falls far short of being a definitive, fact-based assessment of PBMs or the prescription drug market.” And FTC Commissioner Melissa Holyoak, who voted against issuing the report, said during a House Energy & Commerce Committee hearing on July 9 that the report is not nearly comprehensive enough and “lacks economic and empirical evidence.”

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Appeals Court Backs Cigna in Noncompete Ruling With FTC Rule in Limbo

A federal appeals court recently ruled that former Cigna Group executive Amy Bricker cannot join rival CVS Health Corp. due to a noncompete agreement, upholding a preliminary injunction from last year. While the case involving Bricker suggests companies can effectively prohibit employees from switching jobs, firms may no longer be able to do so later this year.

A Federal Trade Commission (FTC) final rule published in the Federal Register in May would ban most firms from enforcing or signing noncompetes with their workers. However, two attorneys tell AIS Health, a division of MMIT, the rule may not go into effect as planned on Sept. 4 due to multiple appeal. Moreover, it may never be implemented, especially if Donald Trump is elected president in November.

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Health Care Coverage, Spending Trends Diverge Among Payers as COVID-Related Policies Expire

The share of people without health insurance coverage reached an all-time low of 7.2% in 2023 but is projected to rise to 8.9% in 2034, according to the Congressional Budget Office.

The increase in the uninsured rate was largely due to the end of Medicaid’s continuous eligibility provisions in 2023 and 2024, the expiration of enhanced subsidies available through the Affordable Care Act (ACA) marketplaces after 2025 and a surge in immigration that began in 2022, observed the CBO in a report posted June 18.

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‘Chaotic’ Health Care Rulemaking Looms After Supreme Court Hamstrings Federal Agencies

On June 28, the U.S. Supreme Court in two rulings eliminated a longstanding legal precedent that has protected regulations issued by federal agencies from a broad swath of legal challenges. Attorneys say rulemaking in health care will become more unpredictable as regulations are challenged — which could cost health plans, providers, and patients.

In their rulings in Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo, the Supreme Court did away with “Chevron deference,” a legal concept that is over 40 years old. Chevron deference granted agencies the legal benefit of the doubt when they issued regulations that clarified parts of statute that Congress had left ambiguous. The premise behind the concept was that agency staff have subject matter expertise that Congress is unlikely to share, and that Congress couldn’t be expected to continually update statutes in order to address every emerging issue of importance to a specific sector of the economy.

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Appeals Court Leaves Preventive Services Coverage Mandate in Limbo — What’s Next?

Legal odds are growing long for the Affordable Care Act’s preventive services coverage mandate after a June 21 appeals court decision, which didn’t resolve a lawsuit that could undermine the legal authority of federal preventive services experts to recommend those services be covered free of charge by health plans. The next stage of the Braidwood v. Becerra suit will be decided by either the conservative Supreme Court or a federal judge who has issued a series of rulings undermining the ACA.

The U.S. Court of Appeals for the Fifth Circuit found that the federal government can still require health plans to provide some preventive services to plan members free of charge under the Affordable Care Act — for now. The ruling still leaves open the possibility that, in the end, Braidwood could upend the preventive services coverage regime set up by the ACA. In the next step of Braidwood, the Biden administration must decide whether to petition the Supreme Court for an appeal, or let the case be decided by Texas District Court Judge Reed O'Connor, who has repeatedly ruled against provisions of the ACA.

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News Briefs: Supreme Court Hobbles Federal Regulators’ Authority

The U.S. Supreme Court on June 28 issued rulings that will overturn the so-called Chevron doctrine, which gave federal agencies broad authority to interpret laws through their regulations. Writing for the majority in a pair of related cases — Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Dept. of Commerce — Chief Justice John Roberts wrote unambiguously that “Chevron is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the [Administrative Procedure Act] requires.” The phrase Chevron doctrine refers to a 1984 case, Chevron v. National Resources Defense Council, which created a framework in which courts largely defer to interpretations of the law made by entities like HHS or the Environmental Protection Agency, as long as that interpretation is reasonable. Overturning that doctrine is expected to have significant implications for highly regulated industries, including the health insurance sector.

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