Policy & Politics

Congressional interest in PBM reform may turn into comprehensive legislation as soon as this summer, D.C. insiders tell AIS Health, a division of MMIT, and possibly has enough bipartisan support to pass both chambers. Lobbyists representing employer plan sponsors say that measures including a requirement that PBMs be fiduciaries to plan sponsors and members, a federal ban on spread pricing, and mandatory price transparency disclosures are all under serious discussion.

Several Senate committees have made moves to advance PBM legislation. The Finance Committee held a hearing on PBMs at the end of March; the Commerce Committee has advanced legislation; and the Health, Education, Labor and Pensions (HELP) Committee seems poised to mark up legislation this month, according to press reports. In the Senate, which is controlled by Democrats, several bills have sponsors from both parties, and the HELP Committee markup will feature members of both parties, led by committee chair Sen. Bernie Sanders (I-Vt., who caucuses with Democrats) and ranking member Sen. Bill Cassidy (R-La.).

Access to the abortion pill mifepristone is in limbo following two contradictory court rulings. On April 7, U.S. District Judge Matthew Kacsmaryk ordered the FDA to suspend its approval of mifepristone, which the agency first issued in 2000. The judge gave the Biden administration seven days to appeal.

On April 10, the Dept. of Justice asked the 5th U.S. Circuit Court of Appeals to block the ruling and keep the drug on the market as litigation plays out. On April 12, the court ruled that mifepristone will remain available for now but with new restrictions, including a requirement for in-person doctor visits to obtain the drug. The Biden administration then responded that it would immediately seek emergency relief from the Supreme Court to restore full access to mifepristone.

Meanwhile, states including New York, Massachusetts, California and Washington are rushing to stockpile abortion pills.

A record high 16.4 million people enrolled in Affordable Care Act marketplace coverage during the 2023 Open Enrollment Period, including 12.2 million people who live in states using HealthCare.gov and 4.2 million in 18 states with their own marketplace, according to CMS. Enrollment in HealthCare.gov marketplaces was up 19% compared with 2022, while signups in the state-based marketplaces saw a slight decline for the first time since 2019.

More than half of states saw their enrollment increase by at least 5% from 2022 to 2023, with five states experiencing signup surges of more than 25%. Meanwhile, plan selections in Kentucky, Massachusetts and New Mexico shrunk by over 10% year over year.

Since the Feb. 1 release of the 2024 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part D Payment Policies, MA insurers had been bracing for comprehensive risk adjustment changes that they argued would result in rate reductions, rather than the modest 1.03% improvement CMS had predicted. In its 2024 final rate notice, released on April 3, CMS finalized but chose to phase in changes to the risk adjustment model, leading to an average expected pay increase of 3.32%. This shift is not unique, as an exclusive look back at previous AIS Health coverage on previous rate notices shows that for much of the last decade, CMS has often left out certain unpalatable proposals from the Advance Notice and improved its payment forecasts.

A federal judge in Texas on March 30 struck down the Affordable Care Act’s requirement that health plans cover, without cost sharing, certain preventive services recommended by the U.S. Preventive Services Task Force (USPTF) — such as preexposure prophylaxis (PrEP) for HIV and screenings for HIV, cancers, suicide risk, and hepatitis C. Policy experts say insurers probably won’t rush to stop covering most affected services, but if the ruling is upheld, they could impose potentially burdensome cost-sharing on PrEP drugs in particular.

The ACA requires private health plans to cover preventive services recommended by several federal bodies without any cost to members. Those entities are the USPSTF, the Advisory Committee on Immunization Practices (ACIP) and the Health Resources and Services Administration (HRSA). In his ruling, Justice Reed O’Connor found that the policymaking power USPSTF wields would require the task force to be appointed by the president and confirmed by the Senate — but the USPSTF is appointed by federal civil servants, not the president. In O'Connor's view, that means issuing plan requirements based on USPSTF recommendations is unconstitutional.

In recent letters sent to seven major publicly traded health insurers, two U.S. senators take aim at the industry’s fierce lobbying campaign against proposed Medicare Advantage rate adjustments — saying insurers are responding to the proposal by threatening to cut benefits for seniors despite spending billions on executive compensation and stock buybacks.

Corporate finance experts say there are valid criticisms to be made about both rising CEO pay and buybacks, but they argue that larger, systemic issues are driving such behavior across all types of industries.

CMS on March 15 revealed the first drugs that will be sanctioned for having their prices increase faster than the rate of inflation, as part of the Inflation Reduction Act. The 27 medications are all covered under Medicare Part B, and many of them are treatments for cancer, chronic kidney disease and the aftereffects of organ transplants. Beneficiaries who normally pay 20% coinsurance under Part B will see their share decline based on an inflation-adjusted price for these drugs.

The federal government will invoice the manufacturers for 2023 and 2024 Part B inflation rebates no later than fall 2025, and those funds will be deposited into the Medicare Trust Fund. A Kaiser Family Foundation analysis found that, from 2019 to 2020, half of all drugs covered by Medicare had price increases above the rate of inflation over that period.

When Medicaid eligibility redeterminations start back up in April, about 9.6 million Medicaid enrollees could transition to employer-sponsored insurance, 2.6 million could move to Children’s Health Insurance Program (CHIP) coverage, and 3.8 million could become uninsured, according to a report released by AHIP. Based on an Urban Institute projection and data on historical coverage transitions from the Current Population Survey Annual Social and Economic Supplement, researchers at NORC at the University of Chicago estimated that in almost all states, the majority of Medicaid enrollees who become disenrolled will transition to ESI, ranging from 57.1% in Delaware to 48.9% in Georgia. Nationwide, over 20% of individuals losing Medicaid coverage during redetermination may become uninsured. Variation across states ranged from 26.2% in South Dakota to 17.7% in Massachusetts.

Many Medicaid agencies’ “frontline eligibility” divisions and call centers are understaffed, according to the Kaiser Family Foundation’s (KFF) just-released annual survey of state Medicaid officials, which was fielded in January. That could complicate income checks and other parts of the eligibility redetermination process, which will resume on April 1 after a yearslong pause due to the COVID-19 pandemic.

State Medicaid programs are ultimately responsible for determining whether a Medicaid enrollee is in fact eligible for enrollment in the program, but Medicaid managed care organizations (MCOs) also have a hand in managing disenrollments — and have strong incentives to keep as many members enrolled as possible. Indeed, the survey found that 41 states are relying on Medicaid MCOs to “conduct outreach and assist members” as they navigate the disenrollment process; 33 states provided MCOs with “advance lists of members up for renewal,” and 26 states have sent out “advance lists of members who may be disenrolled because they have not responded to requests for information.”

Pharma manufacturers may be breathing a sigh of relief as PBMs appear now to be the main focus of lawmakers’ actions on prescription drug pricing. January saw the reintroduction of two pieces of bipartisan Senate legislation, while February brought a Senate hearing focused on PBMs’ transparency and accountability. And in March, Rep. James Comer (R-Ky.), chairman of the House Committee on Oversight and Reform, revealed that he is launching an investigation into those practices. The move continues to keep pressure on the entities over some of their practices and lack of transparency amid concerns around drug prices.

Comer’s move comes more than a year after that committee held a forum titled Reviewing the Role of Pharmacy Benefit Managers in Pharmaceutical Markets. Held Nov. 17, 2021, that event featured a variety of stakeholders within the health care system who spoke about an array of issues, including PBM consolidation, “anticompetitive tactics,” rebates, the need for transparency and PBMs’ role in drug costs. That December, the committee published a report conducted by its staffers on these practices and other issues titled A View from Congress: The Role of Pharmacy Benefit Managers in Pharmaceutical Markets.