Policy & Politics

A House Committee on Oversight and Accountability hearing on potential PBM reform legislation suggests there remains strong, bipartisan interest in crafting legislation that could have a significant impact on the sector, but also that any substantive actions will not come before next year.

The committee heard testimony from executives of the “big three” pharmacy benefit management companies, CVS Caremark, Express Scripts and United/Optum Rx, at its July 23 hearing on “transparency and accountability.” The hearing was the third in a series from the committee after previous sessions were held in May and September 2023.

CVS Health Corp. announced on Aug. 1 an initiative to provide timely excessive heat alerts and outreach to at-risk members of Aetna health plans. CVS is focusing on people “most vulnerable to extreme weather events that can worsen existing chronic conditions,” according to a press release. This fall, it will expand to people who are susceptible to reduced lung function, asthma and cardiac problems. CVS plans to make the service available eventually to its MinuteClinic and CVS Pharmacy locations. CVS said care managers have worked with “hundreds of at-risk patients” in 20 states since launching the initiative two weeks ago.

With Vice President Kamala Harris poised to get the Democratic nomination for president, Wall Street analysts have been busy prognosticating what that means for the array of for-profit health care firms they cover — including Medicare and Medicaid insurers.

So far, select analysts are predicting that Harris’ ascendance will give Democrats a greater chance of winning the election, which would be bad news for Medicare Advantage-focused insurers but good for those more focused on Medicaid and the Affordable Care Act exchanges.

With Vice President Kamala Harris now poised to get the Democratic nomination for president, Wall Street analysts have been busy prognosticating what that means for the array of for-profit health care firms they cover — including health insurers.

So far, select analysts are predicting that Harris’ ascendence will give Democrats a greater chance of winning the election, which would be bad news for Medicare Advantage-focused insurers but good for those more focused on Medicaid and the Affordable Care Act exchanges.

States have been pursuing reforms that would limit hospitals’ ability to charge facility fees for routine medical services delivered in outpatient settings, which drive up enrollees’ premiums and out-of-pocket health care costs, according to a study by Georgetown University’s Center on Health Insurance Reforms.

Facility fees are charges from hospitals and other institutional health care providers that ostensibly cover their operational expenses for providing care. When hospitals acquire or affiliate with physician practices and other outpatient health care providers — a trend seen in the U.S. in recent years — ambulatory services provided at outpatient practices often generate a second bill for the facility fee on top of the professional fees the practitioners charge.

Testifying before a House committee on July 23, executives of the three largest PBMs faced a grilling from lawmakers while trying their best to outline the reforms and transparency efforts they’ve voluntarily implemented in their businesses.

However, the executives’ answers to questions about group purchasing organizations (GPOs), especially when compared to their answers to similar questions at a 2023 hearing, suggest that the companies may still be resisting transparency in some respects.

As scrutiny of PBMs has reignited recently — with critics of the industry hoping to push through a reform measure by the end of the year and the Federal Trade Commission (FTC) reportedly poised to sue the largest PBMs over their contacting practices — the spotlight is also getting brighter on GPOs.

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?”

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.

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.

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.