HealthCare Roundtable e-News – April 24, 2023

 

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Webinar – May 9, 2023 – 2:00 PM (EST)

Drivers of Health Care Costs: Hospital Consolidation and Lack of Price Transparency

With healthcare costs growing at an unsustainable rate, employers, taxpayers, and patients have to pay more for the same quality of care. Hospitals are one of the top drivers of rising healthcare costs due to the lack of market competition. Join us to hear from the Public Sector HealthCare Roundtable senior policy team and our group of experts on the impact of hospital consolidation, anti-competitive practices, and the lack of price transparency on patients and market-based solutions to increase hospital competition and reduce healthcare costs.

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Top News

The Roundtable and Other Leading Employer Groups Join Better Solutions for Healthcare

Last week, Better Solutions for Healthcare, a coalition of business and healthcare industry leaders, announced a new federally-focused campaign. The Roundtable is among the new group’s first members. Other new members include the American Benefits Council, National Alliance of Healthcare Purchaser Coalition, Business Group on Health, AHIP, and BlueCross BlueShield Association. Since 2018, Better Solutions for Healthcare has brought together local business leaders in states across the country with the goal of lowering healthcare costs and impacting health policy debates. The coalition focuses on four main areas that align with the Roundtable’s priorities: promoting hospital competition, enforcing federal price transparency for hospital charges, reining in hospital price markups, and ensuring honest billing practices by hospitals. Click here to view the press release, which includes comments from Roundtable Administrator Tom Lussier.

 

Lawmakers Continue Efforts to Crackdown on PBM Practices

Last week, the Senate Finance Committee released a bipartisan framework for the Committee to use as it considers legislative solutions to address pharmacy benefit managers (PBMs) business practices. The Committee’s framework comes after its hearing last month to examine PBMs’ practices and the potential impact on costs to patients and taxpayers. The document outlines four key challenges facing federal prescription drug programs: misaligned incentives that drive up prices and costs, insufficient transparency that distorts the market, hurdles to pharmacy access, and behind-the-scenes practices that impede competition and increase costs. The framework also outlines potential policy solutions to address these challenges including delinking PBM compensation from drug prices and enhancing PBM accountability to health plan clients.

Also last week, a bipartisan group of representatives introduced the Pharmacy Benefits Manager Accountability Act (H.R. 2679). Beginning in 2025, the bill would require PBMs to report annually to health plan sponsors on various information related to prescription drug pricing, including the total amount a PBM receives in rebates, fees and alternative discounts for certain therapeutic categories of drugs, and the total net amount a health plan spends on prescription drugs during the reporting period. The legislation would also require a report be sent to the Government Accountability Office (GAO) on the practices of group health plans’ pharmacy networks, and empower the Departments of Health and Human Services (HHS), Labor, and Treasury to use monetary penalties to enforce reporting requirements.

 

DOJ Submits Amicus Brief in Court Case Over State Regulation of PBMs

Earlier this month, the federal government submitted an amicus brief to the Tenth Circuit Court of Appeals arguing that an Oklahoma law regulating pharmacy benefit managers (PBMs) should stand, but that some provisions cannot be applied directly to insurance plans regulated by the Employee Retirement Income Security Act (ERISA). In 2020, the Supreme Court ruled in Rutledge v. PCMA that ERISA did not preempt an Arkansas law regulating PBMs’ payments for prescription drugs. More recent litigation has sought to clarify the scope of the 2020 ruling and how much states can regulate PBMs.

Currently, the Tenth Circuit Court of Appeals is considering PCMA v. Mulready. In this case, PCMA is challenging the Patient’s Rights to Pharmacy Choice Act, an Oklahoma law that seeks to block some PBM business practices the state views as anti-competitive, including preferring pharmacies owned by the PBM. PCMA sued the Oklahoma Insurance Department and its commissioner, Glen Mulready, to block enforcement of the law. The U.S. District Court largely ruled in favor of the state, finding that ERISA does not preempt the state law because it did not require ERISA-regulated plans to make any specific choices. The Tenth Circuit asked the federal government to submit an amicus brief for the case. The Department of Justice (DOJ) submitted an amicus brief earlier this month, asking the district court decision to be upheld in part and reversed in part. According to the brief, the provisions should be preempted only to the extent they apply directly to ERISA-regulated plans that directly engage in covered conduct themselves. While the provisions would limit plan administration if applied to insurers, they do not conflict with ERISA if applied to PBMs.

 

MedPAC Debates Impact of Part D Redesign on DIR Factors

According to staff for the Medicare Payment Advisory Commission (MedPAC), redesigning (subscription required) the Medicare Part D benefit may not sufficiently address the impact of vertical integration among pharmacy benefit managers (PBMs) and insurers on prescription drug prices in the Part D program. Chair Michael Chernew warned the commission of the limits of MedPAC’s ability to suggest drug pricing changes. In June, MedPAC will include research on the impact of direct and indirect remuneration (DIR), such as post-sale rebates and pharmacy fees, including the effect on prescription drug pricing in Part D, as a baseline for future analysis on the effects of the Inflation Reduction Act’s drug price controls on rebate negotiations between drug makers and Part D plan sponsors. According to MedPAC staff, DIR expanded from $8.7 billion, or about 11 percent, of gross Part D spending in 2010 to $62.7 billion, or 29 percent, in 2021. In 2025, Medicare will reallocate coverage liability among Medicare, plans, drug companies, and beneficiaries in the Part D benefit and all out-of-pocket drug spending will be capped at $2,000 annually for Part D enrollees.

Executive Action

On Tuesday, President Biden announced a new executive order that directs federal agencies to take more than 50 distinct actions to expand access to affordable, high-quality childcare and long-term care services. The White House notes that the cost of childcare has risen 26% in the past decade, and long-term care costs increased by 40%, leading to shortages in affordable, high-quality care for individuals and families. The announcement highlights several initiatives included in the executive order which includes: 1) Directing federal agencies to review ways to improve access to affordable childcare through existing programs; 2) Expanding access to home and community-based services, including self-direction through the Veteran’s Administration (VA) system by the end of FY 2024; 3) Directing the Department of Health and Human Services (HHS) to issue regulations or guidance to improve the quality of home care jobs; among other initiatives. 

Administrative Action

  • On Monday, the U.S. Department of Health and Human Services (HHS) announced that in the coming weeks, they will amend the department’s declaration under the Public Readiness and Emergency Preparedness (PREP) Act to extend certain flexibilities related to access to COVID-19 vaccines and treatments. The PREP Act provides liability protection to manufacturers and other organizations who provide and distribute the medical countermeasures purchased by the Administration. Key changes include:1) Extending coverage for COVID-19 vaccines, seasonal influenza vaccines, and COVID-19 tests through December 2024 2) Ending coverage of COVID-19 vaccination by non-traditional providers or across state lines. 3) Ending coverage for routine childhood vaccinations. 

  • The Centers for Medicare and Medicaid (CMS) finalized their annual Notice of Benefit and Payment Parameters rule for 2024 (fact sheet), which outlines requirements for issuers and Marketplaces. The rule notably finalizes several provisions to simplify coverage options and expand access to Marketplace coverage, including access to behavioral health care. Final rule provisions include: 1) A revision to the network adequacy and essential community provider (ECP) standard to require that all individual market qualified health plans (QHPs) use a network of providers that complies with the network adequacy and ECP standards in those sections, and to remove the exception that these sections do not apply to plans that do not use a provider network. 2) Limiting the number of non-standardized plan options that issuers of QHPs can offer through Marketplaces on the Federal platform (including SBM-FPs) to four non-standardized plan options per product network type, metal level (excluding catastrophic plans), and inclusion of dental and/or vision benefit coverage, in any service area, for PY 2024 and two for PY 2025 and subsequent plan years. 3) Giving Marketplaces the option to implement a new special enrollment period (SEP) for people losing Medicaid or Children’s Health Insurance Program (CHIP) coverage. This option would mean that consumers would have 60 days before, or 90 days after, their loss of Medicaid or CHIP coverage to select a Marketplace plan. 4) Finalizing a user fee rate of 2.2% of premium for QHPs sold on the Federally Facilitated marketplace (FFM), and a rate of 1.8% for QHPs on the State-Based Marketplace on the Federal platform (SBM-FP). The proposed user fee rates were 2.5% and 2.0% respectively. 

Congressional Action

House Speaker Kevin McCarthy (R-CA) released House Republicans’ proposal to raise the U.S. debt ceiling. The bill, also known as the Limit, Save and Grow Act, proposes to raise the debt limit by either $1.5 trillion or through March 31, 2024, whichever comes first. The bill also proposes to revert discretionary spending caps to Fiscal Year 2022 while limiting growth to 1 percent annually over the next decade. Of note, the bill proposes Medicaid work requirements for individuals aged 19 through 55, with certain exceptions. The bill includes several other proposals to cut the Biden Administration’s Inflation Reduction Act spending provisions, including cuts to coronavirus spending, Biden’s loan forgiveness program, green energy tax credits, and IRS funding. However, the bill contains no cuts to Social Security or Medicare. The bill also proposes new requirements for Congressional review of federal rulemaking, including additional reporting to Congress on rulemaking and establishing a joint resolution process for rules classified as “major” rules.

Medicare

  • Early last week, the Centers for Medicare and Medicaid (CMS) released a report on the health care disparities in Medicare Advantage by Race, Ethnicity, and Sex. The report is based on an analysis of the Medicare Advantage and Prescription Drug Plan (PDP) Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey and the Healthcare Effectiveness Data and Information Set (HEDIS). The report focuses on national racial, ethnic, and sex differences in patient experience and clinical quality of care in Medicare Advantage (MA) with hopes of informing MA organizations and Medicare Part D sponsors as they consider strategies to improve the quality of care received by underserved groups. This report presents summary information on the quality of health care received by MA enrollees and specifically highlights: 1) The distribution of race, ethnicity, and sex among MA enrollees 2) Disparities in health care in MA by race and ethnicity 3) Disparities in health care in MA by sex 4) Disparities in health care in MA by race and ethnicity within sex.

  • On Thursday, the Department of Health and Human Services (HHS) released ownership data for all Medicare-certified hospice and home health agencies for the first time. The public can now review the detailed ownership information of more than 6,000 hospices and 11,000 home health agencies certified to participate in the Medicare program on the Centers for Medicare & Medicaid Services (CMS) website. The announcement is in support of the President’s Executive Order on promoting competition. The data elements include enrollment information such as organization name, type, practice location addresses, National Provider Identifier (NPI), CMS Certification Number (CCN); detailed information about each owner; and a numerical associate ID for each owner.  

  • On April 5, CMS released their annual Medicare Advantage (MA) and Part D Final Rule for 2024 (fact sheet) which governs requirements for MA and Part D plans. Among its provisions, the rule finalizes stricter prior authorization requirements, increases beneficiary marketing protections, better incorporates health equity into Star Ratings, provider directories, and quality improvement programs, and improves access to behavioral health. Healthsperien developed a detailed section-by-section summary of the Final Rule, describing finalized provisions and stakeholder comments. The summary can be found here.  

Medicaid

The Centers for Medicare and Medicaid Services (CMS) released a new opportunity for states to help increase care for individuals who are transitioning from incarceration to the community during reentry. The Medicaid Reentry Section 1115 Demonstration Opportunity would allow state Medicaid programs to cover services to address various health concerns of incarcerated individuals, including substance use disorders and other chronic health conditions. The demonstration opportunity comes after California’s recent approval for coverage of certain health care services for individuals transitioning back to the community. In addition, it supports President Biden’s evidenced-based public safety strategy, the Safer America Plan, and the Unity Agenda to address the mental health crisis and opioid epidemic.

Litigation

U.S. Supreme Court Justice Samuel Alito extended last week’s hold to maintain the current level of access to Mifepristone, a widely used abortion pill, for two additional days. The move allows the Supreme Court to continue weighing emergency appeals from the Biden Administration and the manufacturer of the drug. The previous hold, set to expire Wednesday evening, was placed to give the justices additional time to decide whether to allow a set of sweeping restrictions on Mifepristone originating from lower court rulings to take effect. The Supreme Court now has until 11:59 p.m. EDT Friday to issue a ruling.  

Research

  • A new study published last Friday suggests that greater Black primary care physician (PCP) workforce representation is associated with improved population health measures for Black individuals. The study, published in the JAMA Network, analyzed the survival outcomes of Black individuals for 1,618 U.S. counties to assess county-level Black PCP workforce representation and its association with mortality-related outcomes in the U.S. In addition to finding that Black PCPs operated in less than half of all counties from 2009-2019, it discovered that on average, every 10-percent increase in county-level Black PCP representation was associated with 31-day higher age-standardized life expectancy among Black individuals. Higher Black PCP representation levels were also associated with lower all-cause mortality rates among Black individuals and with reduced mortality rate disparities between Black and White individuals. The study concluded that investments to build a more representative PCP workforce nationally may be important for improving population health.  

  • Late last week, the Journal of the American Medical Association (JAMA) released a study examining the impact of state policies expanding Supplemental Nutrition Assistance Program (SNAP) eligibility on rates of mental health and suicidality outcomes among adults. The study found that state elimination of the asset test and increased income limits for SNAP eligibility were associated with decreased rates of past-year major depressive episodes, mental illness, serious mental illness, suicidal ideation, and suicide death among adults. Notably, states with both policies in place had a decreased rate of suicide compared with states with neither policy. Moreover, the results from the study suggest that state adoption of policies that increase the number of households eligible to receive food purchasing assistance through SNAP may contribute to decreased rates of multiple mental health and suicidality outcomes at the population level. 

  • Recently, researchers reported new data from the American Community Survey (ACS) and Henry J. Kaiser Family Foundation on trends in Medicaid-funded home and community-based services (HCBS) and the size of the home care workforce between 2008 and 2020. The researchers found that HCBS utilization more than tripled throughout the review period due to federal and state efforts to rebalance long-term services and supports from institutional to community settings. However, the ACS workforce data showed that while the home care workforce grew throughout the period, it did so at a slower rate between 2013 and 2020. Consequently, the number of home care workers per 100 HCBS participants declined by 11.6% between 2013-2019, suggesting demand for workers is likely to outstrip supply. This new data comes as the White House recently signed a new Executive Order directing many federal agencies to take actions to strengthen access to care workers, including home care workers, by improving recruitment, retention, and overall quality of caregiving jobs.