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Trends That Matter

Trends That Matter for Medicaid MCOs

July 30, 2020

Two recent reports found that Medicaid managed care plans now enroll most Medicaid members, help keep costs and premiums low in the markets where they participate, and are competitive with commercial plans at the low end of the individual market in areas including network quality and benefit design, AIS Health reported.

One white paper was prepared by consultancy The Menges Group for America’s Health Insurance Plans (AHIP), and the other was authored by researchers at the Robert Wood Johnson Foundation (RWJF) and Urban Institute.

Two recent reports found that Medicaid managed care plans now enroll most Medicaid members, help keep costs and premiums low in the markets where they participate, and are competitive with commercial plans at the low end of the individual market in areas including network quality and benefit design, AIS Health reported.

One white paper was prepared by consultancy The Menges Group for America’s Health Insurance Plans (AHIP), and the other was authored by researchers at the Robert Wood Johnson Foundation (RWJF) and Urban Institute.

The Menges Group-AHIP white paper, which had a national scope, found that Medicaid MCO enrollment increased by 121% between fiscal years 2010 and 2018, from 26 million to over 56 million members, and that as of 2018, more than 75% of all Medicaid enrollees are members of an MCO, up from 50% in 2010. The report also found that, since 2017, capitated payments to MCOs have exceeded fee-for-service expenditures.

The RWJF-Urban Institute paper, which relied on case study surveys in Arkansas, California, Florida, New York, Ohio, and Washington state, concluded that MCOs offer coverage that is at least as good as commercial plans in the low end of the Affordable Care Act individual market.

“Many [stakeholders] feel there are no longer major distinctions between Medicaid and commercial insurers in the marketplaces. Most interviewees have positive perceptions of Medicaid insurers, crediting their ability to increase choice and affordability in the individual health insurance market,” wrote the paper’s authors.

Trends That Matter for Racial Disparities in MA Plans

July 16, 2020

As protests erupt across the U.S. calling for racial justice and police reforms, the COVID-19 pandemic continues to bring to light many of the racial disparities in health care, putting pressure on policymakers and the industry to take a hard look at health and access inequities, AIS Health reported.

As protests erupt across the U.S. calling for racial justice and police reforms, the COVID-19 pandemic continues to bring to light many of the racial disparities in health care, putting pressure on policymakers and the industry to take a hard look at health and access inequities, AIS Health reported.

Meanwhile, CMS’s Office of Minority Research in April released a stratified report highlighting the racial and ethnic differences in health care experiences and care of Medicare Advantage (MA) enrollees. The data showed that black members enrolled in MA plans in 2018 received worse clinical care than white enrollees on 20 out of 44 measures, similar care for 20 and better care for four. And all minority populations reported experiences with care that were either worse than or similar to the experiences reported by white enrollees, including the experience measure for getting appointments and care quickly.

Not getting the proper care when it’s needed is a reflection of the provider network, says John Gorman, chairman and CEO of Nightingale Partners LLC. “And then when you look at the clinical measures where there’s huge racial disparities, all of those tie back to a lack of culturally competent physicians serving these populations in a manner that speaks to the way that they need to access health care,” he observes.

Trends That Matter for DMD Therapies

July 2, 2020

Since 2016, the FDA has approved a handful of therapies to treat Duchenne muscular dystrophy (DMD). But some uncertainty exists over their effectiveness, in addition to concerns about their costs.

When DMD is suspected, a blood test that measures creatine kinase (CK) levels is performed. “CK is an enzyme found in abnormally high levels when muscle is damaged,” Mesfin Tegenu, R.Ph., president of PerformRx, LLC., tells AIS Health. “The detection of an elevated CK level leads to molecular genetic testing to confirm a definitive diagnosis of DMD.”

Since 2016, the FDA has approved a handful of therapies to treat Duchenne muscular dystrophy (DMD). But some uncertainty exists over their effectiveness, in addition to concerns about their costs.

When DMD is suspected, a blood test that measures creatine kinase (CK) levels is performed. “CK is an enzyme found in abnormally high levels when muscle is damaged,” Mesfin Tegenu, R.Ph., president of PerformRx, LLC., tells AIS Health. “The detection of an elevated CK level leads to molecular genetic testing to confirm a definitive diagnosis of DMD.”

In February 2017, the FDA approved then-manufacturer Marathon Pharmaceuticals LLC’s Emflaza (deflazacort). The company said it would be priced at $89,000, which sparked outrage since people have been buying a generic version from overseas since the 1990s for about $1,000 per year. After the backlash, Marathon ultimately sold the drug to PTC Therapeutics Inc., which launched it later that year with a $35,000 annual price tag. Since then, PTC has raised the price to more than Marathon’s original one.

In September 2016, the FDA gave accelerated approval to Sarepta Therapeutics, Inc.’s Exondys 51 (eteplirsen). The dystrophin gene has 79 exons, and about 80% of people with DMD have genotypes that are amenable to exon skipping. Exondys 51 targets those with a mutation of the DMD gene that is amenable to exon 51 skipping.

Sarepta also has a second exon-skipping therapy, Vyondys 53 (golodirsen), which treats DMD in people with a mutation amenable to exon 53 skipping. The FDA gave the drug accelerated approval in December, almost four months after the agency rejected the drug through a complete response letter.

Both drugs are weight-based with similar prices: about $300,000 per year but up to $1 million annually.

“It’s unclear how much a health plan may spend on someone with DMD; however, a recent study from the Muscular Dystrophy Association found that the annual cost for DMD for U.S. society as a whole is around $362-$488 million dollars,” says Tegenu. “The price of the newer DMD therapies (Exondys 51 and Vyondys 53) are both estimated to cost approximately $750,000 per year for the treatment of one patient.”

Trends That Matter: Enrollment Shift Into ACA Exchanges

June 18, 2020

As the impact of the COVID-19 pandemic continues to reverberate throughout the U.S. economy, it’s become clear that there will be a major enrollment shift away from employer-sponsored plans and into Medicaid and the individual market, AIS Health reported.

In fact, one recent analysis suggested that there could be “unprecedented growth” in the individual health insurance market. “The impact of COVID-19-related job losses will likely more than double the current enrollment in Individual & Marketplace plans, with the potential for the Individual market to triple in size to over 35 million in a sustained and severe economic contraction,” stated the analysis from A2 Strategy Group.

As the impact of the COVID-19 pandemic continues to reverberate throughout the U.S. economy, it’s become clear that there will be a major enrollment shift away from employer-sponsored plans and into Medicaid and the individual market, AIS Health reported.

In fact, one recent analysis suggested that there could be “unprecedented growth” in the individual health insurance market. “The impact of COVID-19-related job losses will likely more than double the current enrollment in Individual & Marketplace plans, with the potential for the Individual market to triple in size to over 35 million in a sustained and severe economic contraction,” stated the analysis from A2 Strategy Group.

Such growth, the report said, “will come from newly unemployed individuals in all states who exceed Medicaid eligibility thresholds” because of money they receive from the Coronavirus Aid, Relief, and Economic Security Act. And in states that haven’t expanded Medicaid, nearly all of the newly unemployed who earn below 100% of the federal poverty level could qualify for Affordable Care Act premium subsidies.

Another analysis from the Urban Institute and Robert Wood Johnson Foundation (RWJF), estimated that if U.S. unemployment reaches 20%, 25 million people would lose employer-sponsored health insurance. “Of these, 11.8 million would gain Medicaid coverage, 6.2 million would gain marketplace or other private coverage, and 7.3 million would become uninsured,” it stated.

Katherine Hempstead, the senior adviser to the executive vice president at RWJF, says it’s possible the coming enrollment shifts will cause some health insurers to re-evaluate their level of participation in the ACA exchanges, which some large insurers left in 2017 and 2018 before the market stabilized.

Trends That Matter: The Future of Value-Based Agreements

June 4, 2020

The challenge of improving patient access while reducing treatment costs has led the healthcare sector to explore innovative contract arrangements. Using value-based agreements (also referred to as risk-sharing or outcomes-based contracts) biopharmaceutical manufacturers and payers agree to link coverage and reimbursement levels to a drug’s effectiveness and usage. These agreements have been a necessity in providing patients access to high-cost and high-value gene therapies. However, in chronic disease states like diabetes and cardiovascular disease, value-based contracts have been essential to managing treatment costs associated with the high-volume utilization of these treatments.

The challenge of improving patient access while reducing treatment costs has led the healthcare sector to explore innovative contract arrangements. Using value-based agreements (also referred to as risk-sharing or outcomes-based contracts) biopharmaceutical manufacturers and payers agree to link coverage and reimbursement levels to a drug’s effectiveness and usage. These agreements have been a necessity in providing patients access to high-cost and high-value gene therapies. However, in chronic disease states like diabetes and cardiovascular disease, value-based contracts have been essential to managing treatment costs associated with the high-volume utilization of these treatments.

Current challenges in value-based care include stakeholders’ alignment on which metrics are measurable and are valuable to include in an agreement, along with the presence of extensive technology and an unbiased third-party administrator to track and report on treatment outcomes. Successful implementation of such programs also involves patient adherence to treatments coordinated and monitored by physician practices or hospital systems.

That said, the question remains, how are value-based agreements going to evolve in the future?

Value-based agreements are becoming more prevalent and will continue to grow over the next two years. MMIT’s Special Report on Value Based Agreements Between Payers and Manufacturers surveyed 50 decision-makers covering 136 million commercial members and found that engagement in value-based contracts has steadily increased over the past three years. In this same survey, payers covering 85% of those commercial members reported that they anticipate increasing their participation in such agreements over the next two years.

In addition, the COVID-19 crisis is pushing integrated delivery networks and health care systems to their limits financially, which may prompt them to re-evaluate or renegotiate existing value-based agreements to prioritize their financial recovery. Similarly, accountable care organizations (ACOs) facing a similar financial crisis may experience challenges in meeting their existing value-based contract goals. To alleviate some of the concerns that such organizations are facing, CMS recently announced that it will work toward relaxing quality reporting requirements and prorate losses suffered by Medicare ACOs in 2020.

The special report also illustrates another critical finding – the surveyed payers rated their organizations as highly capable of entering value-based agreements. As a result of the pandemic, recent research suggests there is an increased likelihood of additional vertical integration of payers on one side, in addition to smaller physician practices’ integration into larger hospital systems. This trend stands to improve payers’ and physicians’ ability to track outcomes more effectively, which will bode well for value-based agreements, since they often require interoperability between payers, providers and careful monitoring of patient adherence.

If payers relax their initial and reauthorization restrictions on therapies to ease drug access during the pandemic, they will likely have a chance to revisit existing policies once the dust settles. Exploring innovative contracting methods to help payer organizations control and recuperate costs in the aftermath of the pandemic may become a necessity that could create new opportunities for value-based contracts. With an increasing number of members filing for unemployment and moving to the Medicaid line of business, this segment could also be a focus area for such agreements.

To learn more about the special report on value-based agreements between payers and manufacturers, visit https://bit.ly/3ewzTLV. For more information about the impact of COVID-19 and resources that provide actionable insights, visit https://bit.ly/2yDQoGu.

Trends That Matter for Medical-Benefit Drug Spending

May 21, 2020

Spending on prescription drugs that are covered under the medical benefit increased by 65% between 2014 and 2018 for commercial insurers and 40% for Medicare, according to Magellan Rx Management’s annual Medical Pharmacy Trend Report.

Spending on prescription drugs that are covered under the medical benefit increased by 65% between 2014 and 2018 for commercial insurers and 40% for Medicare, according to Magellan Rx Management’s annual Medical Pharmacy Trend Report.

“The increase in medical pharmacy spend seems to largely be driven by inflation,” Kristen Reimers, Magellan’s senior vice president of specialty clinical solutions, tells AIS Health. “This can be a combination of two things, increasing costs of existing drugs and providers utilizing newer more expensive drugs. The pipeline was extremely robust and new therapies to market are contributing to inflation, driving the trend.”

According to the report, new oncology therapies are both emblematic and a primary driver of growth in drug prices. A new generation of highly effective, biologic oncology drugs have emerged in the last decade. However, these pioneering drugs are expensive. According to the report, oncology drugs and the drugs needed to support them accounted for 43% of per-patient per-month medical pharmacy spending for commercial carriers.

Like other biologic drugs, most biologic oncology drugs have yet to see significant biosimilar competition due to barriers in the biosimilar market and development pipeline.

“The most exciting biosimilars are those currently in the oncology space. Herceptin, Avastin and Rituxan have been the top five drugs in terms of spend for the last 10 years,” says Reimers. “Rituxan and Avastin now have two biosimilars on the market, and Herceptin has five marketed products. There will be competition, which will help to flatten the trend for these products, although there is still expected to be growth.”