Healthcare Triage News: ACA Risk Adjustment is out of Danger. For Now.
A few weeks ago, we were critical of the Trump administration’s handling of ACA risk adjustment payments. We’re fair-minded types around here, so we though you should know that they’ve taken steps to fix it.
Wisconsin has received a federal waiver to leverage $200 million to implement a state-based reinsurance program to cover high-cost claims in the individual health insurance market.
Reinsurance covers a portion of the most expensive claims. The move helps to stabilize the individual market by reducing insurer claim costs and decreasing premiums.
Insurers don’t have the uncertainty that a small number of high-risk individuals could dramatically increase their expenses because there aren’t enough healthy consumers to balance out the risk pool.
Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.
The Department of Health and Human Services and the Department of the Treasury on Sunday approved the 1332 state innovation waiver under the Affordable Care Act. The five-year program starts Jan. 1, 2019 and ends Dec. 21, 2023.
The approved waiver allows the state to have access to $200 million in reinsurance funding. The federal government will pay an estimated $166 million and the state, $34 million.
The program is budget neutral to the federal government. The money comes from savings from premium tax credits. The federal waiver allows the premium tax credits to be passed through to the state, rather than going directly to the consumer.
Consumers will see the savings in an expected 3.5 percent drop in their premiums in the individual market, starting in 2019, according to a released statement from the Centers for Medicare and Medicaid Services and Wisconsin Governor Scott Walker. This compares to a 44 percent rate hike on premiums in 2018.
Walker submitted the waiver request for the state’s Health Care Stability Plan in April.
In an unrelated waiver request, Wisconsin has asked to impose work requirements as a condition of Medicaid beneficiaries receiving coverage.
While CMS Administrator Seema Verma and HHS Secretary Alex Azar have reportedly said that a judge’s decision in Kentucky barring work requirements will not stop the Trump administration from considering similar waivers, Wisconsin’s request awaits federal approval.
Last month, a federal judge blocked Kentucky’s plan to implement a work requirement waiver. In light of the action, CMS decided to reopen Kentucky’s 30-day federal public comment through August 18.
The House of Representatives passed a pair of bills on Wednesday that would loosen regulations around health savings accounts and delay the health insurance tax for two years.
The Restoring Access to Medication and Modernizing Health Savings Accounts Act (H.R. 6199) passed 277-142. The legislation would give plans additional flexibility to cover services before a deductible is met. It would also permit spouses to contribute to an HSA and allow members to purchase over-the-counter drugs.
The Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018 (H.R. 6311), which passed 242-176, would increase the amount beneficiaries can contribute to an HSA. But it also includes provisions to add catastrophic or “copper” plans to the ACA exchanges.
Additional solutions to strengthen Health Savings Accounts will provide Americans with more choices, more control and better flexibility to invest their healthcare dollars in ways that best fit their personal needs,” AHIP president and CEO Matt Eyles said in a statement.
H.R. 6311 also includes a two-year delay on the health insurance tax, something insurers have pushed against for some time. In an earnings call last week, UnitedHealth Group CEO David Wichmann said the insurer was advocating for a “delay or outright repeal of the insurance tax” which he claimed would drive up premiums.
In 2015, the most recent year the tax was in effect, insurers lost about $11 billion.
“Providing another temporary reprieve, as work continues to fully repeal this harmful tax, will help reduce premiums for families, small business owners, seniors and states,” Eyles said.
HSAs have been largely supported by Republicans, although some bipartisan bills have sought to use high-deductible plans and HSAs to improve chronic disease treatment. HSAs combined with high-deductible plans have seen steady growth over the last several years, increasing more than 400% since 2007, according to AHIP.
Critics have pointed out that HSAs don’t work well for low-income individuals who don’t have the money to put into an HSA.
On Thursday, following a speech at the Heritage Foundation, Department of Health and Human Services Secretary Alex Azar lauded the use of HSAs as a way to involve consumers in their care.
“We are very supportive of efforts to strengthen HSAs to allow more money to be put in there, to enable the HSA money to be used for more preventive services, and to expand the reach of those,” he said. “I think it’s a critical counterpart to high-deductible plans and a critical element to how we bring that kind of consumerism to a third-party payer system.”
https://apnews.com/a69f5ada0db24ada9bc5bd8a44604f3b
The Trump administration’s Medicare chief on Wednesday slammed Sen. Bernie Sanders’ call for a national health plan, saying “Medicare for All” would undermine care for seniors and become “Medicare for None.”
The broadside from Medicare and Medicaid administrator Seema Verma came in a San Francisco speech that coincides with a focus on health care in contentious midterm congressional elections.
Sanders, a Vermont independent, fired back at Trump’s Medicare chief in a statement that chastised her for trying to “throw” millions of people off their health insurance during the administration’s failed effort to repeal the Affordable Care Act.
Verma’s made her comments toward the end of a lengthy speech before the Commonwealth Club of California, during which she delved into arcane details of Medicare payment policies.
Denouncing what she called the “drumbeat” for “government-run socialized health care,” Verma said “Medicare for All” would “only serve to hurt and divert focus from seniors.”
“You are giving the government complete control over decisions pertaining to your care, or whether you receive care at all,” she added.
“In essence, Medicare for All would become Medicare for None,” she said. Verma also said she disapproved of efforts in California to set up a state-run health care system, which would require her agency’s blessing.
In his response, Sanders said that “Medicare is, by far, the most cost-effective, efficient and popular health care program in America.
He added: “Medicare has worked extremely well for our nation’s seniors and will work equally well for all Americans.”
The Sanders proposal would add benefits for Medicare beneficiaries, coverage for eyeglasses, most dental care, and hearing aids. It would also eliminate deductibles and copayments that Medicare and private insurance plans currently require.
Independent analyses of the Sanders plan have focused on the enormous tax increases that would be needed to finance it, not on concern about any potential harm to seniors currently enrolled in Medicare.
But so-called “Mediscare” tactics have been an effective political tool for both parties in recent years, dating back to Republican Sarah Palin’s widely debunked “death panels” to fan opposition to President Barack Obama’s health care overhaul. Democrats returned the favor after Republicans won control of the House in 2010 and tried to promote a Medicare privatization plan.
Democrats clearly believe supporting “Medicare for All” will give them an edge in this year’s midterm elections.
More than 60 House Democrats recently launched a “Medicare for All” caucus, trying to tap activists’ fervor for universal health care that helped propel Sanders’ unexpectedly strong challenge to Hillary Clinton for the 2016 Democratic presidential nomination. Just a few years ago, Sanders could not find co-sponsors for his legislation.
A survey earlier this year by the Kaiser Family Foundation and The Washington Post found that 51 percent of Americans would support a national health plan, while 43 percent opposed it. Nearly 3 out of 4 Democrats backed the idea, as did 54 percent of independents. But only 16 percent of Republicans supported the Sanders approach.
Early in his career as a political figure, President Donald Trump spoke approvingly of Canada’s single-payer health care system, roughly analogous to Sanders’ approach. But by the 2016 presidential campaign Trump had long abandoned that view.
The Trump administration will release billions in risk-adjustment payments to insurers this fall, ending a relatively short-lived freeze that generated pushback from payers and providers alike.
“This rule will restore operation of the risk-adjustment program and mitigate some of the uncertainty caused by the New Mexico litigation,” CMS Administrator Seema Verma said in a statement. “Issuers that had expressed concerns about having to withdraw from markets or becoming insolvent should be assured by our actions today. Alleviating concerns in the market helps to protect consumer choices.”
The final rule (PDF), released by the Centers for Medicare & Medicaid Services (CMS) on Tuesday evening, maintains the same methodology for risk-adjustment transfers previously outlined by the agency, using statewide average premiums as part of the formula. CMS included an additional explanation in the rule on the formula.
For the 2018 and 2019 benefit years, CMS will adjust statewide average premiums by 14% to account for an estimated proportion of administrative costs that do not vary with claims. The agency will not apply an adjustment to the 2017 plan payments “to protect the settled expectations of insurers” that have already calculated pricing and offering decisions based on the 2017 formula.
“Absent this administrative action, HHS would be unable in the coming months to collect charges or make payments to issuers for the 2017 benefit year,” the rule states. “These amounts total billions of dollars, and failure to make the payments in a timely manner threatens to undermine the stability of the insurance markets.”
CMS suspended the $10.4 billion in risk-adjustment payments earlier this month, citing a New Mexico court decision in February that vacated the use of statewide average premiums to calculate risk-adjustment payments. The agency asked the district court judge to reconsider his ruling, but that decision isn’t expected until the end of August.
Most policy experts expected CMS to unfreeze the payments, and late last week the agency sent an interim rule to the Office of Management and Budget (OMB) for review.
Several insurers were quick to denounce the freeze. Physician and hospital groups like the American Hospital Association and the American Medical Association had also urged CMS to reinstate the payments in recent weeks.
Good Samaritan Hospital, a 491-bed facility in Dayton, Ohio, closed July 23.
Here are five things to know:
1. Dayton-based Premier Health, which owns Good Samaritan Hospital, first announced plans in January to close the facility. Premier said operating two hospitals — Good Samaritan and Miami Valley Hospital in Dayton — within 5 miles of each other had become unsustainable.
2. In June, Premier announced it would close Good Samaritan July 23.
3. One week before Good Samaritan was schedule to shut down, HHS launched an investigation into whether closing the hospital would have a disproportionate effect on African-American residents. Dayton Mayor Nan Whaley publicly called on Premier Health July 17 to not demolish the hospital until after the agency completes its investigation.
4. Premier Health moved forward with the closure of Good Samaritan as scheduled. The hospital shut down its emergency room July 19, and the facility completely closed at 12:01 a.m. on July 23.
5. The closure of Good Samaritan’s ER did not have a significant effect on wait times at local hospitals, according to the Dayton Daily News. Wait times at Miami Valley Hospital and Grandview Hospital in Dayton were 23 minutes and 19 minutes, respectively, on July 22.
HHS proposes allowing some drug importation, but impact would be limited
Regulators could allow importation of certain drugs in an effort to keep prices down, under a proposal from the Department of Health and Human Services.
On Thursday, HHS Secretary Alex Azar requested that Food and Drug Administration Commissioner Scott Gottlieb create a working group to find how to safely import drugs from abroad in cases when their US-made marketed equivalents undergo dramatic price increases.
However, experts said the effect of such a policy on prices – if it passes – will be limited.
Azar pointed to the now infamous example of the toxoplasmosis drug Daraprim, whose price manufacturer Turing Pharmaceuticals increased from $13.50 per pill to $750 in 2015, drawing nationwide scorn for Turing and its CEO, Martin Shkreli. Shkreli was sentenced to seven years in prison in April following his August 2017 conviction on charges of securities fraud and conspiracy. Turing, which has since changed its name to Vyera Pharmaceuticals, is currently losing money, STAT reported, and shareholders will vote Friday on a proposal to change the name again, to Phoenixus.
Several political leaders have proposed allowing importation of drugs. In May, Republican Vermont Gov. Phil Scott signed a bill that would allow importation of drugs from Canada, though HHS must still certify the law. Independent Vermont Sen. Bernie Sanders also introduced a bill in the Senate, S. 469, The Affordable and Safe Prescription Drug Importation Act, that would allow the same, with cosponsorship from several Senate Democrats. The bill would wholesalers, pharmacies and individuals to import a range of medications.
However, the HHS proposal is more narrow, focusing specifically on drugs that have seen significant price increases. Gerard Anderson, professor of health policy and management at Johns Hopkins University, and several colleagues made a similar proposal in a paper published in JAMA in February 2016. Under their proposal, GlaxoSmithKline – the original manufacturer of Daraprim – would be able to import the drug from the United Kingdom, where it sells for less than $1 per tablet. The paper compared the proposal to FDA allowances for importation during shortages of critical medications.
Still, Anderson said in a phone interview that the HHS proposal will not likely have a broader spillover effect on drug prices, but will only affect the specific drugs that are included. “For a very narrow subset of medications, it could take the Martin Shkrelis out of the ballgame because these drugs are very inexpensive in other countries,” he said.
In addition to Turing, other companies that have become notorious for raising drug prices include Shkreli’s prior company, Retrophin, and Valeant Pharmaceuticals. Questcor Pharmaceuticals raised the price of Acthar Gel from $1,650 per vial to $23,269 in 2007, and the price has risen to $38,892 since Questcor’s 2014 acquisition by Mallinckrodt Pharmaceuticals. More recently, larger drug companies have also taken heat for smaller price increases. Pfizer backed down from a plan to raise the prices of about 100 of its medications after criticism from the Trump administration, while Novartis and Merck & Co. have pledged to limit price increases as well.
The government stipulating what constitutes a “dramatic price increase” could create a de facto price ceiling that drugmakers would stay under when changing their prices, said Lev Gerlovin, vice president at Boston-based consultancy Charles River Associates, in a phone interview. It’s hard to assess whether that would have a material effect on the industry, given that the ceiling may be greater than what most manufacturers already tend to do as a matter of course. However, while cautioning that he is not a Washington observer, Gerlovin said likely industry pushback citing patient safety concerns makes the proposal appear unlikely to pass.
The health insurer Anthem Inc. was sued by doctors in Georgia for declining to pay for some emergency-room care, escalating a long-running battle over how far insurance plans can go to push patients to seek lower-cost treatment.
The American College of Emergency Physicians and the Medical Association of Georgia filed suit on Tuesday in U.S. District Court in Atlanta against Anthem’s Blue Cross and Blue Shield of Georgia unit over the denied payments. The doctors asked the court to require Anthem to halt its policy and cover the claims.
“Providers and patients alike are operating in fear of denial of payment by defendants when patients seek emergency department care,” the groups said in the filing.
It’s the latest legal challenge over a change in policy that Anthem says was designed to cut down on patients going to an emergency room in situations that don’t require it. Emergency-room care usually costs significantly more than treatment at a doctor’s office or an urgent-care clinic. Georgia’s Piedmont Hospital and five related facilities also have sued Anthem over the policy, the Atlanta Journal-Constitution reported in February.
Before putting the policy in place, Anthem sent letters to customers explaining the policy and urging them to use other sites for care. The insurer also held meetings with physicians, according to the suit.
Anthem didn’t immediately respond to a request for comment on the suit.
Anthem’s strategy went beyond what’s legally allowed, the doctors say in their lawsuit. The insurer reviewed the cases of patients who went to an emergency room, and decided whether to pay for their care based on billing information or medical records related to the incident. The suit says Anthem violated legal requirements that insurers cover care in a situation where a “prudent layperson” would believe he or she was experiencing an emergency.
According to the suit, Anthem began reviewing emergency-room visits in Georgia, Kentucky and Missouri, and has also brought the policy to Ohio, New Hampshire and Indiana. Based in Indianapolis, Anthem operates under the Blue Cross and Blue Shield brand in 14 states. The company has almost 40 million health-insurance members.
Lawmakers including U.S. Senator Claire McCaskill of Missouri have criticized Anthem’s policy. McCaskill and a fellow Democrat, Senator Ben Cardin of Maryland, sent a letter in March to the Health and Human Services Department and Labor Department, asking them to investigate the payment denials.
“By denying patient claims based on the patient’s final diagnosis and ignoring the patient’s symptoms present at the time of the emergency, we believe that Anthem likely violated federal law,” the senators wrote.
The appellate judges affirmed the district court’s dismissal for lack of subject-matter jurisdiction.
The AHA failed to fulfill the legal prerequisites to judicial review, according to the ruling.
The plaintiff has seven days to file a petition for the appellate court to rehear the matter en banc.
The American Hospital Association’s attempt to block $1.6 billion in cuts to the 340 Drug Pricing Program suffered a major setback Tuesday, when the D.C. Circuit Court sided with Health and Human Services.
The three-judge panel ruled that the lower court had properly dismissed AHA’s case because the association failed to fulfill the legal prerequisites to judicial review.
More specifically, AHA failed to adequately present the matter to HHS Secretary Alex Azar. This “presentment” threshold is the obstacle that tripped up the AHA challenge at the district court level, a decision Tuesday’s appellate ruling affirmed.
“When the plaintiffs filed this lawsuit, neither the hospital plaintiffs, nor any members of the hospital-association plaintiffs, had challenged the new reimbursement regulation in the context of a specific administrative claim for payment. Nor could they have done so, for the new regulation had not yet even become effective,” the appellate judges wrote. “Therefore, they had neither presented their claim nor obtained any administrative decision at all, much less the ‘final decision’ required under [the relevant law].”
The AHA, along with fellow plaintiffs the Association of American Medical Colleges and America’s Essential Hospitals, had argued that it met the presentment requirement by opposing the policy in writing during the rulemaking process.
Because the decision was based on a lack of subject-matter jurisdiction, it did not address the merits of AHA’s claims.
“We are deeply disappointed that the courts have once again failed to rule on the merits of our case,” the hospital groups said Tuesday in a statement.
The groups emphasized that the decision does not address whether they can obtain judicial review. It simply addresses when and how that review can be obtained.
“We will continue our fight to reverse these unwarranted cuts and protect access for patients, and we expect to refile promptly in district court,” the groups added.
https://us5.campaign-archive.com/?u=8ccc385380053ffb629ecef0f&id=fd94cdddf1
Reducing Drug Prices and Medicare’s Role: ‘It’s Complicated
The White House Rose Garden was in full bloom when President Trump took the podium to announce that his administration was “launching the most sweeping action in history to lower the price of prescription drugs for the American people.”
He said: “It’s been a complicated process, but not too complicated.”
Thing is, it is pretty complicated and made more so by the admittedly tangled web of lobbyists knocking with dogged determination on lawmakers’ doors in pursuit of one thing: higher drug prices.
Their efforts appear to be working. In 2017, they spent almost $280 million in pursuit of their employers’ objectives. Another estimate puts the cost of drug lobbying at $2.3 billion from 2006 to 2016, and it’s clear that the industry also pays substantially to support candidates for both houses of Congress.
The President talked about his announcement being “the most sweeping action in history to lower the price of prescription drugs.” If you remember the presidential campaign, he promised to utilize Medicare’s gorilla purchasing power to negotiate directly to reduce prices. That all sounded very promising.
What Medicare Can and Can’t-Do
Medicare buys more drugs than anyone else, because it has a base of approximately 60 million people over age 65 or younger with certain disabilities, and is the largest single healthcare payer. However, the law actually prevents Medicare from carrying on direct negotiations with pharmaceutical companies. Specifically, it bars the Secretary of the Department of Health and Human Services (HHS) from managing the negotiations. Right now that’s Alex M. Azar II, a former executive with behemoth pharmaceutical company Lilly USA LLC, of Eli Lilly and Co.
Many were chagrined that the “American Patients First” does not, in fact, have any mandate for Medicare to negotiate directly with drug manufacturers. Some have described the situation in general as a gift, with a big bow around it, to America’s drug companies.
To understand why this happened, it helps to understand some of the history. Hearken to 2006, when Congress was in the throes of arguing the federal law around Medicare’s Part D law, the Medicare Modernization Act that became enforced in 2003. It was the most extensive rejuvenation of the program in 38 years.
Lobbyists persuaded lawmakers that if Medicare gained the ability to negotiate, that it would be akin to price control and an affront to the free market. Insurance companies in charge of subsidizing the new coverage were charged with managing drug costs.
Drugs Do Come Cheaper
In contrast, AARP invites us to consider how the Veterans Health Administration (VHA) deftly negotiates drug prices. The proof is in the pricing, as VHA pays 80 percent less for brand names than Medicare Part D. The VHA’s formulary list, that magic roster of medications it covers is a powerful negotiating tool. The relationship between Medicare and Medicaid that exists within the Food and Drug Administration (FDA) means the former two agencies must cover all FDA-approved drugs. That’s in spite of the fact that less expensive and equally effective medications can be bought on the open market.
Maybe you wonder how your fellow Americans feel about all of this. Big surprise: Democrats, Republicans, and independents are all pretty much on the same page. That’s according to a report from the National Academies of Sciences, Engineering, and Medicine. The analysis states emphatically that “finding a way to make prescription medicines — and healthcare at large — more affordable for everyone has become a socioeconomic imperative.”
According to the Henry J. Kaiser Family Foundation, a majority of Democrats (96 percent), Republicans (92 percent), and Independents (92 percent) think that yes, our government should have to negotiate power here.
Maybe Yes, Maybe No
Kaiser’s analysis of this conundrum over the “noninterference clause” is this. Those in favor of having Azar negotiate think this would result in leverage to reduce drug costs, especially around medications with sky-high prices but with no competition. They say private plans just don’t pack enough punch that way.
As expected, those who proclaim “no” shrug and opine that the Secretary simply couldn’t get better deals done. Then there’s the argument that haggling over price would inhibit pharma’s research and development, limiting the opportunities for more and better medications to improve quality of life and save lives.
As Kaiser notes, in addition to allowing the HHS Secretary to make better deals on drugs, another option would be to establish a public Part D plan that works in partnership with private Part D. “The Secretary would establish a formulary for the public Part D plan and negotiate prices for drugs on that formulary.”
There’s also a compromise approach of sorts in the mix that would address those expensive drugs and those that don’t have therapeutic alternatives: The Secretary could negotiate those.
At the end of the day, before Medicare can become the drug price negotiator extraordinaire, the law must be changed, and that’s a big lift. Based upon history, even Republicans are not expected to want to do this, and for sure pharma will recoil. That leaves consumers using Part D watching and waiting for change.
Drug Negotiation Side Effects
Increasing negotiating around Medicare could have ramifications if the President transfers expensive medications from Part B — the first Medicare legislation in 1965 —
to Part D, says The New York Times.
AARP says it’s worried about increasing out-of-pocket charges if this happens. Also, 9 million Medicare members in Part B don’t have Part D, leaving a void as to who will pay medication costs.
The publication asked doctors for their opinions and one responded that one misstep could be “a disaster.” Another worried about Part D drugs’ prices increasing more than Part B’s. Still, other notes protected classes of Part D drugs that must be covered by insurance plans, but in this instance may hamper Part D negotiations.
HENRY KOTULA 