Payer

Radar On Market Access: Insurers Are Required to Cover Only ‘Medically Necessary’ COVID-19 Tests

July 2, 2020

As more employers turn to COVID-19 testing to see if employees are safe to return to the workplace, the Trump administration has clarified that insurers must cover only physician-ordered “medically necessary” diagnostic and antibody tests, AIS Health reported.

The guidance, released jointly on June 23 by HHS, the Dept. of Labor and the Dept. of the Treasury, also says self-funded employer plans must pay for COVID-19 testing that’s medically appropriate.

As more employers turn to COVID-19 testing to see if employees are safe to return to the workplace, the Trump administration has clarified that insurers must cover only physician-ordered “medically necessary” diagnostic and antibody tests, AIS Health reported.

The guidance, released jointly on June 23 by HHS, the Dept. of Labor and the Dept. of the Treasury, also says self-funded employer plans must pay for COVID-19 testing that’s medically appropriate.

“Testing conducted to screen for general workplace health and safety (such as employee ‘return to work’ programs), for public health surveillance for SARS-CoV-2, or for any other purpose not primarily intended for individualized diagnosis or treatment of COVID-19 or another health condition is beyond the scope” of the requirements embedded in the legislation approved by Congress earlier this year that requires insurers to pay for COVID-19 testing, the FAQ document said.

“I think now that [the insurers] have had this clarification, they’re going to use that as part of their determination of coverage,” Ashraf Shehata, KPMG national sector leader for health care and life sciences, tells AIS Health.

Richard Hughes IV, managing director at Avalere Health, says that it’s possible to argue that Congress intended insurers to cover all tests for their members, regardless of whether a physician ordered them, whether the person was symptomatic, or whether the test was needed to return to work.

However, Hughes says it’s also possible to argue that Congress gave CMS the authority to implement these testing requirements with some restrictions. “There could be tremendous variability across payers’ approaches to coverage policy and how they process claims,” he says.

In fact, many insurers already have moved to limit testing coverage in some ways, although their policies are fluid and have been updated frequently, says Danielle Showalter, principal at Avalere.

Individuals whose plans will not cover a test can turn to what Shehata calls the “retail model,” which is direct-to-consumer COVID-19 testing sites that don’t require a health care provider’s permission. Costs vary for this type of testing, which generally wouldn’t be covered by insurance unless the person is symptomatic.

Radar On Market Access: CMS Proposes New Medicaid Best Price Rules for Pricey Therapies

June 30, 2020

In an effort to boost adoption and lower costs for curative therapies, CMS proposed a new rule that the agency says would allow state Medicaid plans to enter into value-based, outcome-dependent purchasing agreements with drug manufacturers using a new interpretation of best price rules, AIS Health reported.

CMS proposed an updated interpretation of Medicaid “best price” rules by clarifying best price reporting requirements and enabling new structures including year-to-year scheduled prices that could change in relation to patient outcomes.

In an effort to boost adoption and lower costs for curative therapies, CMS proposed a new rule that the agency says would allow state Medicaid plans to enter into value-based, outcome-dependent purchasing agreements with drug manufacturers using a new interpretation of best price rules, AIS Health reported.

CMS proposed an updated interpretation of Medicaid “best price” rules by clarifying best price reporting requirements and enabling new structures including year-to-year scheduled prices that could change in relation to patient outcomes.

New curative therapies present a novel financial challenge for payers. Curative therapies eliminate the need for intensive treatment of chronic and terminal conditions, which create substantial savings for payers, patients and providers alike.

However, their high up-front cost is borne by payers and patients, and the initial payer may not see the entire financial benefit of the curative therapy. What’s more, under a traditional payment model, insurers are unable to recoup costs if a new, experimental therapy with curative potential has limited effect.

In order to spread risk and value across all stakeholders involved, some drug benefit industry leaders have called for broad adoption of the value-based pricing methods CMS’s proposed rule seeks to create, backed by a reinsurance mechanism.

Avalere Health principal Mike Schneider tells AIS Health that, although CMS’s proposal does not include a reinsurance mechanism, it should advance adoption of curative therapies. He says that, as they are currently implemented, Medicaid’s best price rules have made it difficult for commercial payers to negotiate with drug manufacturers to include outcomes and proof of concept in purchasing agreements.

Though the proposed rule applies directly to state Medicaid plans, Schneider says that the rule could have a substantial impact on the commercial market as plans bidding on Medicaid contracts gain experience with the new paradigm.

Still, barriers remain in adopting new curative therapies. Drug Channels Institute CEO Adam Fein points out that the rule does not address the challenge presented by copay accumulators to patients who might benefit from expensive, new specialty drugs — which suggests the rule might not speed up curative therapy adoption as quickly as patients might hope.

MMIT Reality Check on Ankylosing Spondylitis (June 2020)

June 26, 2020

According to our recent payer coverage analysis for ankylosing spondylitis treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for ankylosing spondylitis treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

To help make sense of this new research, MMIT’s team of experts analyzes the data and summarizes the key findings for you. The following are brief highlights. To read the full piece, including payer coverage, drug competition and prescriber trends, click here.

Payer Coverage: A review of market access for ankylosing spondylitis treatments shows that under the pharmacy benefit, about 69% of the lives under commercial formularies are covered with utilization management restrictions.

Trends: The FDA’s recent approvals of two interleukin-17A (IL-17A) antagonists — Eli Lilly and Co.’s Taltz (ixekizumab) and Novartis Pharmaceuticals Corp.’s Cosentyx (secukinumab) — to treat active non-radiographic axial spondyloarthritis, a less advanced form of ankylosing spondylitis, provide a new mechanism of action.

Perspectives on COVID-19 Vaccine Rollout

June 25, 2020

The rollout of a vaccine for SARS-CoV-2, the virus that causes COVID-19, is an unprecedented logistical challenge. So will be deciding who gets it: experts say that the initial vaccine supply will not be large enough to dose everyone who wants it — and payers and PBMs will have a large role to play in distributing the medicine to the right people quickly.

David Simchi-Levi, Ph.D., a systems engineer who studies manufacturing and supply chain at MIT, tells AIS Health that it’s inevitable that vaccine supply will not meet demand when it is available. “The question will be, who gets it?” he says.

The rollout of a vaccine for SARS-CoV-2, the virus that causes COVID-19, is an unprecedented logistical challenge. So will be deciding who gets it: experts say that the initial vaccine supply will not be large enough to dose everyone who wants it — and payers and PBMs will have a large role to play in distributing the medicine to the right people quickly.

David Simchi-Levi, Ph.D., a systems engineer who studies manufacturing and supply chain at MIT, tells AIS Health that it’s inevitable that vaccine supply will not meet demand when it is available. “The question will be, who gets it?” he says.

Mike Schneider, a principal at Avalere Health and a former executive at CVS Health Corp.’s Caremark PBM, says that given the likely scarcity of the vaccine, areas hardest hit by COVID-19 should be the focus of the initial supply.

“I think the payers will probably try to stay out of the way as much as possible, and let local laws determine who can get a vaccine and probably local health departments determine who can get the vaccine before others,” Schneider says. He adds that payers should also use prior authorization matched to FDA guidance to ensure the right people are dosed.

When a vaccine is available, Schneider expects retail pharmacies to play a large role in delivery. He cites retail pharmacy chains’ rollout of drive-through SARS-CoV-2 testing and the annual ritual of getting a flu shot from a pharmacist as examples of what delivering the coronavirus vaccine could look like. Along the same lines, he expects primary care practitioners to perform some inoculations.

Even a well-managed rollout will only be a first step. Manufacturing and supply chain concerns will dictate the supply of vaccines available in the U.S. going forward. So will trade, as most medicines are manufactured in China and India. Those countries will certainly want to care for their own citizens as soon as possible, which could delay the release of vaccine here.

Given all that uncertainty, Schneider expects that a SARS-CoV-2 vaccine could be a perennial component of formularies, along the lines of the flu vaccine. Schneider expects that receiving the coronavirus vaccine will be a routine preventive treatment that costs patients little to nothing.

Radar On Market Access: Telehealth Regulation and Reimbursement Issue Sparks Debates

June 25, 2020

Telehealth use has surged during the COVID-19 pandemic, and is likely to remain higher than it was before the crisis on a permanent basis. However, the difficult work of regulating and establishing rate structure for telehealth beyond the COVID-19 pandemic has only just started, AIS Health reported.

On June 17, the Senate Health, Education, Labor and Pensions Committee held a hearing about how to consolidate the gains in telehealth made necessary by the pandemic.

Telehealth use has surged during the COVID-19 pandemic, and is likely to remain higher than it was before the crisis on a permanent basis. However, the difficult work of regulating and establishing rate structure for telehealth beyond the COVID-19 pandemic has only just started, AIS Health reported.

On June 17, the Senate Health, Education, Labor and Pensions Committee held a hearing about how to consolidate the gains in telehealth made necessary by the pandemic.

The most important policy decision that Congress must make is on reimbursement. CMS has elected to compensate telehealth visits at the same rate as in-person visits for the duration of the pandemic, but whether that will continue is likely to be decided in the coming weeks. At present, commercial plans have a wide variation in telehealth reimbursement amounts.

Providers will likely oppose setting telehealth reimbursement at rates lower than in-person visits, and experts predict the balance of visits will shift more heavily toward remote consultations going forward.

Yet part of the allure of telehealth for payers and patients is that a remote visit generally costs less than an in-person consultation. The stakes are high for the payer industry: Provider services seem to be the main driver behind higher overall health care spending in the last decade. If telehealth visits account for a meaningful share of overall visits across the industry, a lower rate of reimbursement will make a big difference in lowering costs.

The other major regulatory challenge for telehealth is provider licensing. State medical boards exercise control over whether a clinician can practice in their state, and it is typically illegal for a practitioner licensed in one state to care for patients in another.

“We think the best way to handle [state licensure] is through a compact,” said Krista Drobac, the executive director of the Alliance for Connected Care, during a session at America’s Health Insurance Plans’ Institute & Expo. “We would like to see licensure reciprocity or mutual recognition, what we refer to as licensure portability.…Congress can’t step in and take over licensing — that’s just not a federal responsibility.”

Yet Avalere Health founder Dan Mendelson takes a different view. “The licensure issues are problematic. The Congress needs to act more aggressively to make it easier to deliver telemedicine in the United States,” he says.

Radar On Market Access: CMS Report Shows Increasing Racial Disparities in MA Plans

June 23, 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.

John Weis, CEO of Quest Analytics, LLC, predicts that “there will be a significant impact on practice consolidation” from the pandemic. “Given the potential risk to providers, we predict that coming out of COVID, we’ll see an uptick in providers that want to minimize their exposure and consider retirement,” he suggests. And with fewer providers available, “if plans are not prepared, this will drive both out-of-network utilization and increase health care costs in rural areas.”

Dan Mendelson, founder of Avalere Health, suggests that while MA plans have the tools to address racial disparities, they don’t necessarily have the incentives to prioritize them. “I think Medicare Advantage plans are uniquely equipped to measure, understand, identify and mitigate disparities…. So, a proactive form of engagement that is focused on disparities can work,” says Mendelson. “One thing that is not there at this point is any kind of direct incentive to the plans to act.”