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CMS Releases 2024 Medicare Advantage Final Rate Notice
On Friday, the Centers for Medicare & Medicaid Services (CMS) released (fact sheet) the Announcement of Calendar Year (CY) 2024 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Final Rate Announcement). Of note, CMS finalized their risk adjustment model changes as proposed, but will phase in the model over three years. Key provisions in the Final Rate Announcement are outlined below:
- MA Plan Payment Impacts: Increased the average payments from the original proposed 1.03 percent to 3.32 percent. Increased the risk score trend from 3.30 percent to 4.44 percent, reflecting the phase-in of the finalized 2024 risk adjustment model.
- Part C Risk Adjustment Model Revision: Finalized the 2024 proposed Part C risk adjustment model as proposed with a phase in over three years. The proposed model included restructured condition categories using ICD-10 instead of ICD-9, updated underlying FFS data years, and revisions to the model to account for coding variation.
- Inflation Reduction Act of 2022 Updates for 2024: Described several Inflation Reduction Act updates that will be in place for CY 2024, including elimination of cost-sharing of Part D drugs in the catastrophic phase of coverage and expansion of Low-Income Subsidy program (LIS) eligibility from 135 percent to 150 percent.
Earlier this month, the Roundtable submitted comments in response to the proposed 2024 Medicare Advantage (MA) and Part D Advance Notice. In its comments, the Roundtable recognized the importance of periodic updates to MA payment policies while expressing concern that the proposed changes would lead to increased costs for public sector retirees and their dependents who often rely on fixed incomes. The Roundtable letter to CMS can be viewed here.
Alliance to Fight for Health Care Applauds Introduction of Telehealth Expansion Act of 2023
Last Wednesday, the Alliance to Fight for Health Care applauded a bipartisan, bicameral group of legislators for introducing the Telehealth Expansion Act of 2023. This legislation makes permanent the provision that allows employers the flexibility to offer telehealth services below the deductible to employees with a Health Savings Account (HSA) paired with a high-deductible health plan (HDHP). Reps. Michelle Steel (R-CA-45), Susie Lee (D-NV-03), Adrian Smith (R-NE-03), and Brad Schneider (D-IL-10) and Sens. Steve Daines (R-MT) and Catherine Cortez-Masto (D-NV) introduced the legislation. Originally included in the Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020, this provision makes telehealth more affordable and flexible for employees with an HSA. In December, Congress passed an omnibus package that extended the provision for two years through December 31, 2024.
The Alliance to Fight for Health Care strongly supports a permanent extension of this provision. The Roundtable is a member of the Alliance to Fight for Health Care, which is a diverse coalition comprised of businesses, patient advocates, employer organizations, unions, health care companies, consumer groups, and other stakeholders that support employer-provided health coverage.
Senate Finance Committee Holds Hearing on PBMs and their Impact on Patients and Taxpayers
Last Thursday, the Senate Finance Committee held a hearing on Pharmacy Benefit Managers and the Prescription Drug Supply Chain: Impact on Patients and Taxpayers. During the hearing, most committee witnesses emphasized the need for PBM reform, and the committee members highlighted opportunities for bipartisan policies to reform the industry. Committee Chair Ron Wyden (D-OR) stated that the original goal of PBMs was to use their access to limited data to negotiate lower drug prices on behalf of their clients. He explained that in recent years, the industry has not shared the benefits of the prices they negotiate with consumers and the Medicare program. Ranking Member Mike Crapo (R-ID) highlighted the success of the Medicare Part D program in ensuring low-cost drug access. He emphasized the need to prioritize the patients when developing policies and echoed Chair Wyden’s call for increased transparency to empower consumers, plans, providers, and pharmacies to make informed decisions. He added that policymakers need to assess the various incentives within the medication supply chain.
The industry was not represented at the hearing. In response, the Pharmaceutical Care Management Association (PCMA), the national PBM trade association, told reporters that the hearing ignored that drug companies set the prices of the products that they make and sell and urged Congress to focus on policies that will reduce costs for patients and employers.
Energy & Commerce Subcommittee on Health Holds Hearing on Lowering Health Care Costs
On Tuesday, the House Energy & Commerce Subcommittee on Health held a hearing on Lowering Unaffordable Costs: Examining Transparency and Competition in Health Care. Hearing witnesses and committee members emphasized the need for reform to decrease health care costs, enable patients to easily find the estimated cost of their health care procedures, and increase price competition for hospitals and physicians. Members of the subcommittee also highlighted opportunities for bipartisan action. The hearing addressed the following:
- The impact lack of transparency and increased integration has on patient decision-making and cost of care.
- The lack of compliance with the hospital transparency rule, which requires hospitals to make public their standard charges for 300 shoppable services.
- The need to improve enforcement of the Transparency in Coverage Rule for health insurance plans which instituted price transparency requirements and required health insurance plans to provide personalized pricing information for 500 items and services.
- The lack of hospital competition and increased consolidation, both of which are linked to higher prices for care.
- The continued vertical integration of pharmacy benefit managers (PBMs) and the impact on access to and cost of prescription drugs.
Healthsperien’s notes from the testimony can be accessed here.
Bipartisan Group of Lawmakers Launch Domestic Pharmaceutical Manufacturing Caucus
Last Wednesday, a bipartisan group of lawmakers launched the Domestic Pharmaceutical Manufacturing Caucus, which aims to advance legislation that encourages more domestic production of essential medicines and reduces reliance on foreign adversaries. Rep. Earl L. Carter (R-GA-01) announced the caucus alongside Reps. Elissa Slotkin (D-MI-07), Chrissy Huolahan (D-PA-06), and Gus Bilirakis (R-FL-12). The caucus also aims to avoid potential supply chain disruptions and ensure a steady supply of pharmaceuticals in the event of a public health emergency (PHE) or natural disaster.
The caucus’ launch comes after the Biden administration announced a plan to produce at least 25 percent of all active pharmaceutical ingredients for small molecule drugs in the United States in five years. Currently, most active pharmaceutical ingredients for the U.S. market are produced in other countries, mainly China and India. In light of several commonly used critical medicines being in shortage during the past fall and winter seasons, lawmakers are increasingly interested in legislative solutions that could mitigate future shortages.
- Late last week, the House Energy and Commerce (E&C) committee voted (subscription required) to approve H.R. 485: Protecting Health Care for All Patients Act of 2023. This bill would prohibit federal agencies from utilizing quality-adjusted life years (QALYs) to evaluate the cost-effectiveness of drugs and treatments for patients. Bill sponsors, E&C Chair McMorris Rodgers (R-WA) and Ways and Means Chair Smith (R-MO) introduced the bill, and despite the measure’s widespread use in research, they believe it undervalues the benefits treatments could provide to older adults and individuals with disabilities. Of note, none of the Democratic committee members voted to advance the bill, and ranking member Pallone (D-NJ) expressed concern that the bill would interfere with the Centers for Medicare and Medicaid Services’ (CMS) ability to implement the upcoming Medicare drug price negotiations.
- Recently, a group of bipartisan senators introduced a bill to improve how Medicare Advantage plans assess patient health risks and reduce overpayments for care. The No Unreasonable Payments, Coding or Diagnoses for the Elderly (No UPCODE) Act aims to eliminate incentives the group of senators believe result in overcharges to Medicare and cost taxpayers billions of dollars. Specifically, the No UPCODE Act would eliminate: 1) Developing a risk-adjustment model that uses two years of diagnostic data instead of just one year. 2) Limiting the ability to use old or unrelated medical conditions to inflate the cost of care. 3) Ensuring Medicare is only charged for treatment related to relevant medical conditions. 4) Closing the gap between how a patient is assessed under traditional Medicare and Medicare Advantage.
- On Tuesday, Health and Human Services Secretary Xavier Becerra testified before the House Ways & Means Committee and fielded questions on President Biden’s FY 2024 budget proposal. After Secretary Becerra’s testimony, he faced questions from representatives on a wide range of topics, including: 1) Traditional Medicare & Medicare Advantage 2) IRA and Drug Price Negotiation 3) No Surprise Act (NSA) Compliance 4) Alzheimer’s Treatments. Healthsperien’s notes from the testimony can be accessed here.
Nearly 30 provider groups published a letter to the Centers for Medicare and Medicaid Services (CMS) leadership asking them to consider creating a hybrid payment option in the Medicare Shared Savings Program (MSSP) consisting of fee-for-service and prospective payments to primary care doctors to bolster the primary care workforce. The letter comes as CMS has tried to encourage rural and primary care providers to offer value-based care, including upfront investments to new entrants in alternative and value-based payment models in recent months. The provider groups collectively endorse six principles they believe should govern a new hybrid payment option within MSSP, including: 1) Equity considerations embedded in the hybrid payment option 2) The new option must create added value for the Medicare beneficiary 3) The option must result in increased investment in primary care 4) It must be fully voluntary 5) The new option should be available rapidly and in all geographies 6) Implementation must create additional value for Medicare.
On Thursday, CMS approved New Jersey’s request to extend and amend its Medicaid section 1115 demonstration, effective April 1, 2023 through June 30, 2028. Under the demonstration, CMS is approving initiatives related to continuous eligibility, coverage expansion, and health-related social needs (HRSN), including: 1) 12 months of continuous eligibility to adults whose Medicaid eligibility is based on Modified Adjusted Gross Income (MAGI). 2) A new incentive-based payment program called the Behavioral Health Promoting Interoperability Program (BH PIP) will provide health information technology (HIT) infrastructure support to targeted Medicaid providers in order to increase HIT use. 3) Provision or increased coverage of certain services that address HRSN, including nutritional services and nutrition education, as well as transitional housing supports for individuals with a clinical need or who are transitioning out of institutional care, congregate settings, homelessness or a homeless shelter, or the child welfare system.
On Wednesday, the U.S. Food and Drug Administration (FDA) approved Narcan, a 4 milligram (mg) naloxone hydrochloride nasal spray, for over-the-counter (OTC) nonprescription use. This will be the first naloxone product approved for use without a prescription. Naloxone, the standard treatment for opioid overdose, rapidly reverses the effects of an opioid overdose. Consumers will now have increased access to naloxone, including locations such as drug stores, convenience stores, grocery stores and gas stations, as well as online access. The timeline for availability and price of Narcan will be determined by the manufacturer. The FDA will work with all stakeholders to help facilitate the continued availability of naloxone nasal spray products during the time needed to implement the Narcan switch from prescription to OTC status, which may take months.
On Thursday, U.S. District Judge Reed O’Connor ruled preventive care recommendations made by the U.S. Preventive Services Task Force (USPSTF) do not have to be complied with, and blocked the federal government from enforcing the task force’s recommendations. Among the preventive services affected by O’Connor’s order are screenings for breast cancer, colorectal cancer, cervical cancer and lung cancer, diabetes screenings, various screenings and interventions for pregnant people, statin use to prevent cardiovascular disease, vision screening for children, and more. The Biden Administration is expected to appeal O’Connor’s ruling. Insurance coverage contracts generally run through the end of the year, making changes to insurance policies and what services they cover unlikely before 2024.
- On Wednesday, a joint study by researchers at the Centers for Disease Control (CDC), Centers for Medicare and Medicaid Services (CMS), and National Institutes of Health (NIH) demonstrated that individuals who received expanded access to telehealth services to treat opioid use disorder (OUD) were at lower risk of a drug overdose. While the rate of fatal overdose was higher during the pandemic study period, individuals who received telehealth treatment had 33% lower adjusted odds of fatal overdose, when compared with those who received no treatment. However, the researchers noted that relatively few beneficiaries received telehealth services and stressed the need to continue expanding access to treatment through all available means.
- On Wednesday, the University of Wisconsin Population Health Institute (UWPHI) released a report examining civic health, which is defined as the opportunities people have to participate in their communities. They note investments and improvements in both civic infrastructure and civic participation, can be used to reduce health disparities and improve social connection and belonging. Civic infrastructure, such as public spaces or policies, can create opportunities for civic engagement, but it may also form the basis for barriers that systematically exclude some populations. Similarly, civic participation can help form connections and shape the future of communities, but in regions with under-resourced or restrictive civic infrastructure, there tends to be lower overall participation.
Mark Your Calendar for Upcoming Roundtable Events
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.
19th Annual Conference – November 1-3, 2023