Industry Trends

Trends That Matter for New Cystic Fibrosis Medication

December 5, 2019

The FDA recently approved a drug therapy for cystic fibrosis (CF) that is being viewed as a “game-changer” for the roughly nine in 10 patients with the rare, progressive disease who might benefit from it. Where does this leave payers facing rising specialty drug costs across the board? Industry experts predict that most payers likely will cover this latest cystic fibrosis treatment option despite an annual price tag topping $300,000, AIS Health reported.

The FDA recently approved a drug therapy for cystic fibrosis (CF) that is being viewed as a “game-changer” for the roughly nine in 10 patients with the rare, progressive disease who might benefit from it. Where does this leave payers facing rising specialty drug costs across the board? Industry experts predict that most payers likely will cover this latest cystic fibrosis treatment option despite an annual price tag topping $300,000, AIS Health reported.

Vertex Pharmaceuticals, Inc.’s Trikafta (elexacaftor/tezacaftor/ivacaftor and ivacaftor), taken as a twice-daily pill regimen, is the first triple combination therapy available to treat patients with the most common cystic fibrosis mutation. The drug directly addresses the underlying cause of the illness — mutations in the CFTR protein.

The FDA approved Trikafta for patients 12 years and older with at least one F508del mutation in the CFTR gene, which is estimated to represent 90% of the cystic fibrosis population — many of whom have had no approved therapeutic options previously.

“From a utilization management standpoint, there is nothing in the marketplace that will be more effective or significantly less costly” than Trikafta, says Yusuf Rashid, R.Ph., vice president of pharmacy and vendor relationship management at Community Health Plan of Washington.

Manu Jain, M.D., professor of medicine and pediatrics at Northwestern University’s Feinberg School of Medicine and director of Northwestern’s adult CF program, expects the payer community generally will approve Trikafta. But coverage “definitely will be uneven,” he says.

The graphics below show the current market access to CF medications for all payers under the pharmacy benefit.

Radar On Market Access: Amid Budget Standoff, North Carolina Delays Medicaid Transformation

December 3, 2019

In the middle of an epic budget standoff between the state’s Democratic governor and the Republican-controlled legislature over Medicaid expansion and teacher pay, North Carolina’s plan to transfer some 1.6 million Medicaid enrollees into managed care in February is now indefinitely delayed, the North Carolina Dept. of Health and Human Services (DHHS) said on Nov. 19.

In the middle of an epic budget standoff between the state’s Democratic governor and the Republican-controlled legislature over Medicaid expansion and teacher pay, North Carolina’s plan to transfer some 1.6 million Medicaid enrollees into managed care in February is now indefinitely delayed, the North Carolina Dept. of Health and Human Services (DHHS) said on Nov. 19.

Because the North Carolina General Assembly adjourned on Nov. 15 without providing the needed funds and program authority for a Feb. 1, 2020, managed care start date, said DHHS, it has suspended implementation and open enrollment, which began for part of the state in July and went statewide in October.

With an estimated annual spend of approximately $13 billion, North Carolina is the largest state in terms of Medicaid expenditures that has not yet made the move to managed care. And the five managed care organizations taking part in North Carolina’s Medicaid transformation began enrolling beneficiaries on Oct. 14.

Taylor Griffin, a spokesperson for the NC Association of Health Plans, tells the AIS Health that the MCOs are ready to go live on schedule. “Once the state approves a budget, health plans are fully prepared to serve North Carolina’s Medicaid managed care recipients,” he tells AIS Health.

AmeriHealth Caritas North Carolina, one of the insurers contracted to serve the new Medicaid program, said it “remains committed to helping North Carolina bring about its innovative plan for Medicaid transformation” and does not intend to lay off any staff, as one GOP lawmaker had suggested insurers would be forced to do.

But one industry expert cautions against the statewide implementation. “When you push everything statewide all at once, your problems tend to magnify and it becomes very, very challenging for a state to manage not just the beneficiaries — figuring out where to go, how to go, all of that — but the state to manage their five contracted [payers],” remarks Jeff Myers, former Medicaid Health Plans of America president and founder of health care consultancy OptDis.

Perspectives on Racial Bias in Optum Risk-Prediction Algorithm

November 28, 2019

To improve care for patients with the most complex health needs, many providers and payers turn to risk-prediction tools that use an algorithm to determine which patients need more intense care management. But a recent study, published in the journal Science, found that one such widely used algorithm exhibits significant racial bias by assigning black patients the same level of risk as white patients even when they are far sicker, AIS Health reported.

To improve care for patients with the most complex health needs, many providers and payers turn to risk-prediction tools that use an algorithm to determine which patients need more intense care management. But a recent study, published in the journal Science, found that one such widely used algorithm exhibits significant racial bias by assigning black patients the same level of risk as white patients even when they are far sicker, AIS Health reported.

This study garnered significant media attention, and at least one state’s regulators launched an investigation into UnitedHealth Group, whose Optum subsidiary sells Impact Pro, the data analytics program that researchers studied.

Brian Powers, M.D., one of the study’s authors and a researcher at Brigham and Women’s Hospital, says that “the algorithm did a great job of what it was specifically designed to do, which was predict future health care costs.” The problem is that the organizations deploying the tool often “use health care costs as a proxy for health care need,” he says, and black patients tend to cost the health system less because of a “lack of access to care due to structural inequalities, and a variety of other issues that have been well documented.” So while there is a correlation between high-risk patients and high health care spending, just looking at expenditures doesn’t paint a truly accurate picture of patients’ health care needs.

Rich Caruana, a Microsoft Corp. senior researcher who studies machine learning in health care, says he was “not at all surprised” to learn that researchers uncovered hidden bias in a predictive algorithm.

“Most of what machine learning is doing is right, but in addition to these things it’s doing really right, roughly 5% of what it’s learning are these sort of silly, wrong things,” he continues. “These are known as treatment effects — we’re seeing patients’ risk as more or less based on the treatment that they receive.”

Radar On Market Access: Trump Administration’s Transparency Rules Are Part of Larger Effort

November 28, 2019

On Nov. 15, the Trump administration released two rules — one final, one proposed — outlining new price transparency requirements for hospitals and health insurers, which the industry has long warned will impede competitive rate negotiations without actually benefiting patients, AIS Health reported.

On Nov. 15, the Trump administration released two rules — one final, one proposed — outlining new price transparency requirements for hospitals and health insurers, which the industry has long warned will impede competitive rate negotiations without actually benefiting patients, AIS Health reported.

In the proposed rule, slated for publication in the Nov. 27 Federal Register, the administration would require all non-grandfathered group and individual health plans to:

  • Provide consumers with personalized out-of-pocket cost information for all covered health care items and services through an “internet-based self-service tool” and in paper form upon request, and
  • Make their negotiated rates with in-network providers and historical allowed amounts to out-of-network providers available to the public in “standardized, regularly updated machine-readable files.”

In a simultaneously issued final rule, the administration outlines transparency requirements for hospitals. It says they must make public, in a machine-readable format, all “standard charges” for items and services — which the rule defines as gross charges, payer-specific negotiated charges, de-identified minimum and maximum negotiated charges, and discounted cash prices. Plus, hospitals will have to publicly post standard charges for at least 300 “shoppable services” in a consumer-friendly format.

Previously, “standard charges” simply meant hospital chargemaster prices, explains David Kaufman, a partner at Laurus Law Group LLC and former general counsel of Blue Cross Blue Shield of Illinois. Whether CMS is allowed to expand that to include negotiated rates is “going to be the key issue” in a court challenge that hospital groups have promised to file, he tells AIS Health.

But while legal challenges could delay or even prevent one or both rules from being implemented, that doesn’t mean health care organizations have nothing to worry about, says attorney Katie Keith, a principal at Keith Policy Solutions, LLC.

“I guess if I was in the industry, I wouldn’t have my head in the sand about this,” she says. “Insurance companies, to the extent that they have not developed these tools and are not working on this and are not focused on transparency, it does seem like they’re going to want to increase focus on it, because I don’t know that every lawsuit will be successful.”

Radar On Market Access: National and Regional Players Make Dual Eligible SNP Moves

November 26, 2019

Through strategic acquisitions, product launches and geographic expansions, Medicare Advantage insurers across the U.S. are offering new Special Needs Plans (SNPs) aimed at improving the lives of members who are dually eligible for Medicare and Medicaid, AIS Health reported.

Through strategic acquisitions, product launches and geographic expansions, Medicare Advantage insurers across the U.S. are offering new Special Needs Plans (SNPs) aimed at improving the lives of members who are dually eligible for Medicare and Medicaid, AIS Health reported.

According to an analysis of the 2020 “landscape” files posted by CMS in September, Chicago health care consultancy Clear View Solutions, LLC, estimates that there are 171 net new SNP IDs, up from 60 net new plans in 2019. And 97 of those net new plans are dual eligible SNPs, compared with 47 D-SNPs that were introduced for 2019.

“I do think there is some ‘pent up energy’ from plans, and now that there is clarity with permanency and the requirements for integration, plans are ready to move forward,” Cheryl Phillips, M.D., CEO of the SNP Alliance, says in an email to AIS Health.

Phillips says plans may also be “working to better position themselves” for managed long-term services and supports, as states sharpen their focus on rebalancing their long-term care populations and shift more of the responsibility to managed care organizations.

A review of the new D-SNP offerings for 2020 indicates that larger players such as Anthem, Inc., Centene Corp., Humana Inc., Molina Healthcare, Inc. and UnitedHealthcare are leading the charge, but numerous plans have been introduced on a local level.

For instance, UCare, the largest provider of SNPs in Minnesota, said it is expanding its UCare Connect + Medicare plans to mirror the 62-county UCare Connect service area. And Priority Health is preparing to launch its first D-SNP, which will serve all 68 counties of Michigan’s lower peninsula.

Trends That Matter for 2020 Star Quality Ratings

November 21, 2019

According to CMS’s recent release of the 2020 star quality ratings, many Medicare Advantage beneficiaries continue to enroll in plans with 4 or more stars. There was also a notable shift of membership into highly rated Prescription Drug Plans, some of which made meaningful improvements on an individual basis even though PDP performance on average was stagnant, AIS Health reported.

According to CMS’s recent release of the 2020 star quality ratings, many Medicare Advantage beneficiaries continue to enroll in plans with 4 or more stars. There was also a notable shift of membership into highly rated Prescription Drug Plans, some of which made meaningful improvements on an individual basis even though PDP performance on average was stagnant, AIS Health reported.

More than half of Medicare Advantage Prescription Drug plans (210 contracts) that will be offered in 2020 earned overall star ratings of 4 or higher, compared with 46% of MA-PDs (172 contracts) offered in 2019, CMS reported on Oct. 11. Weighted by enrollment, approximately 81% of MA-PD enrollees are currently in contracts that will have 4 or more stars in 2020, up from about 75% in 2019.

Given that there were no substantial changes to the star measures in terms of weights or calculations this year, MA-PDs’ performance on average is “good evidence that the industry did a great job teaching to the test,” observes Melissa Smith, senior vice president of strategy and stars with Gorman Health Group.

Meanwhile, the percentage of enrollees in a PDP rated 4 or higher increased from a meager 3.5% in 2019 to approximately 28% for 2020 based on current enrollment, and the average star rating for PDPs rose from 3.34 in 2019 to 3.5 in 2020.