HealthCare Roundtable e-News – April 8, 2024

 

 

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Webinar | April 24th

Mark your calendars: Join us on April 24th for a webinar discussing the Medicare Prescription Payment Plan program and the co-pay smoothing provisions impacting EGWPs beginning in 2025.

More details and registration to come.

Top News

HHS Releases White Paper on Policy Solutions to Prevent Drug Shortages

The U.S. Department of Health and Human Services (HHS) recently released a white paper (press release) that highlights the steps HHS has taken to mitigate drug shortages and proposes potential solutions for policymakers to consider. The white paper acknowledges several past actions by HHS to support the drug supply chain, including establishing a new Supply Chain Resilience and Shortage Coordinator, issuing guidance to increase supply chain transparency, and collaborating with the Federal Trade Commission (FTC) to jointly issue a Request for Information. In addition to outlining the previous work that the agency has done to support the drug supply chain, the white paper concluded that that effective longer-term solutions may require additional authorities and resources to align market incentives in order to reward investment in supply chain resilience. To enhance this resiliency, HHS proposed collaborative efforts with the private sector through initiatives like the Manufacturer Resiliency Assessment Program (MRAP) and the Hospital Resilient Supply Program (HRSP). These programs aim to introduce transparency, tie purchasing decisions to supply chain resilience, and encourage investments in diversification and domestic manufacturing. While initially focusing on generic sterile injectables in inpatient settings, the strategies outlined could potentially address shortages in other markets as well, provided additional statutory authorities and funding are secured.

 

CMS Issues 2025 Medicare Advantage and Part D Final Rate Notice

The Centers for Medicare and Medicaid Services (CMS) announced the release (fact sheet) of Calendar Year (CY) 2025 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies (the Final Rate Notice). In CY 2025, the effective growth rate was finalized to be 2.33%, a decrease from the proposed 2.44% in the 2025 advance notice. The rebasing/re-pricing was finalized to be .07%. The change in star ratings was -.11%, an increase from the proposed -.15%. CMS continues to implement the phase-in of the significant risk adjustment model changes finalized in the 2024 Final Rate Notice. For CY 2025, CMS will calculate risk scores as a blend of 33% of the 2020 CMS-HCC risk adjustment model and 67% of the 2024 CMS HCC risk adjustment model. The Final Rate Notice describes several IRA updates that will be in place for CY 2025, including the elimination of the coverage gap phase to affect a three-phase benefit (deductible, initial coverage, and catastrophic), the cap of out-of-pocket costs at $2,000, the sunset of the Coverage Gap Discount Program (CGDP) and establishment of the Manufacturer Discount Program (Discount Program), and changes to the liability of enrollees, sponsors, manufacturers, and CMS in the new standard Part D benefit design. CMS finalized updates to the Part D risk adjustment model given the Inflation Reduction Act’s redesign of the Part D benefit.

 

CMS Releases CY 2025 Medicare Advantage and Part D Final Rule

The Centers for Medicare and Medicaid Services (CMS) released the Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly; Health Information Technology Standards and Implementation Specifications Final Rule (fact sheet). Among its provisions, the rule finalizes changes related to Star Ratings, marketing and communications, agent/broker compensation, health equity, dual eligible special needs plans (D-SNPs), utilization management, network adequacy, and other programmatic areas. A summary of key provisions of the rule is outlined below. Healthsperien will be developing a detailed section-by-section summary of the final rule in the coming weeks.

 

ASPE Releases Report on Inflation Reduction Act’s Projected Benefits for Women Enrollees

The Office of the Assistant Secretary for Planning and Evaluation (ASPE) within the Department of Health and Human Services (HHS) released a new report focused on the impacts of the Inflation Reduction Act (IRA) on women Medicare enrollees. Around 30 million women are enrolled in Medicare Part D and data shows that the IRA is benefiting this population. Among Medicare enrollees receiving low-income subsidy (LIS), a program expanded under the IRA in 2024, women are disproportionately represented in high numbers. The expansion of LIS eligibility has lowered women’s out-of-pocket costs. The review also shows that around 733,000 women enrolled in Medicare Part D and B in 2020 could have benefited from the IRA’s $35 insulin cap. Findings also indicate that in 2021, around 2 million women would have had zero out-of-pocket costs for Part D-covered adult vaccines. In 2025, Medicare Part D enrollee out-of-pocket spending will be capped at $2,000 per year and this will help women who have disproportionately higher rates of certain health conditions that require expensive medications such as cancer. Additionally, in 2025, around 857,000 women who do not receive financial assistance are expected to save $1,000 or more under the IRA Part D redesign. Additional benefits for women from the IRA are expected to result from Medicare drug price negotiations over the drug Enbrel, as around 72% of enrollees that use this drug are women.

 

Hospitals Adapt to Growing Price Transparency Compliance Amid Debates on Impact

A year following the reinforcement of federal regulations on price transparency, the majority of hospitals have complied despite initial reluctance, with estimates suggesting over three-quarters have posted negotiated prices with insurers, marking a significant increase since 2021. The Centers for Medicare and Medicaid Services (CMS) raised fines substantially, prompting compliance and diminishing talk of hospitals opting out. CMS has expanded transparency regulations further to enhance patient utility, including requirements for standardized pricing files and additional metrics. While only a few hospitals have faced fines, lawmakers and stakeholders debate the efficacy of transparency in reducing healthcare spending, emphasizing the need for complete datasets and potentially higher fines to incentivize compliance. Meanwhile, both federal and state legislators are advancing legislation to strengthen oversight, though concerns persist regarding the impact on resource-strapped rural hospitals. Despite ongoing debates, proponents remain optimistic about the eventual impact of price transparency in aligning prices with treatment costs and reducing variation.

Administrative Action

The U.S. Department of Health and Human Services (HHS) through the Office of the National Coordinator for Health Information Technology (ONC) recently released the draft 2024-2030 Federal Health IT Strategic Plan (the draft plan) for public comment. The draft plan outlines federal objectives aimed at enhancing access to health data, improving healthcare equity, and modernizing public health data infrastructure. It emphasizes the importance of policy and technology to support diverse data needs in healthcare. Aligned with recent Department initiatives like the HTI-1 final rule and the HHS Health Care Sector Cybersecurity concept paper, the plan aims to advance electronic health information exchange and cybersecurity practices. It highlights the pivotal role of health IT in healthcare delivery, management, and population health tracking, facilitated by common standards like United States Core Data for Interoperability (USCDI) and Health Level Seven International (HL7®). The draft plan underscores the importance of extending health IT benefits to all sectors, including public health, and addresses the impact of technologies like artificial intelligence on healthcare. The public can provide feedback on the draft plan until May 28, 2024, through HealthIT.gov.

Research

  • Health Affairs published an article which provides updates on the Center for Medicare and Medicaid Innovation’s (Innovation Center) strategy to support person-centered, value-based specialty care. In its third year of advancing its strategy refresh in 2024, the Innovation Center aims to ensure all Traditional Medicare beneficiaries and a majority of Medicaid beneficiaries are in accountable care relationships by 2030. To expand accountable care, the Innovation Center released a comprehensive specialty care strategy, which includes piloting test models to increase patient access to high-quality, integrated specialty care. Progress has been made in implementing the strategy’s four key elements, which include: Enhance Specialty Care Performance Data Transparency, Maintain Momentum on Acute Episode Payment Models And Condition-Based Models, Create Financial Incentives Within Primary Care for Specialist Engagement, and Create Financial Incentives for Specialists To Affiliate With Population-Based Models And Move To Value-Based Care.

 

  • A recent article from Health Affairs highlights how new bundled payment models should consider physician groups. The Centers for Medicare and Medicaid Services (CMS) latest bundled payment program, Bundled Payments for Care Improvement (BPCI) Advanced, will extend through 2025 and there are indications that a model may become mandatory. Such a mandatory model would focus on hospital participants. This model would likely lose physician group participants given the financial and strategic challenges for mandating involvement amongst this group. Within the BPCI Advanced model, physician groups account for a large share of participants. The article points to how physician groups in the BPCI Advanced model, compared to hospitals, are responsible for more surgical episodes. Furthermore, physician groups manage costs and quality more efficiently than hospitals during these surgical episodes. The article argues that to ensure cost-efficient practices, CMS should engage physician groups in any new bundled payment models as direct participants or via more adaptable gainsharing models. Gainsharing programs enable hospitals to offer financial incentives to physicians under value-based care contracts and can align incentives for physicians and hospitals. Additionally, the piece suggests that any population-based model should directly support alignment between clinical specialists and primary care providers.

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