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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.
Senate HELP Committee Considers Bipartisan Bills to Lower Prescription Drug Prices
Last Tuesday, the Senate Health, Education, Labor, and Pensions (HELP) Committee announced that it will consider a series of bipartisan bills this week on prescription drugs and pharmacy benefit managers (PBMs). This included four bills which would 1) increase transparency between health plans and PBMs, 2) codify the Food and Drug Administration’s (FDA) interpretation of orphan drug exclusivity (ODE), 3) eliminate incentives for delayed market entry for generic pharmaceutical manufacturers, and 4) increase oversight of the FDA’s citizen petition process. Specifically:
- The PBM Reform Act would compel PBMs to pay 100% of the rebates received to health plans and abandon a practice commonly known as “spread pricing”, where they charge health plans higher prices for drugs than what they pay the pharmacies.
- The RARE Act would codify the FDA’s interpretation of ODE and narrow the scope of approval under the ODE. The RARE Act is in response to a 2021 U.S. Court of Appeals decision in Catalyst Pharms., Inc. v. Becerra, which effectively prohibited the FDA from giving more than one manufacturer ODE for the same molecular entity.
- The Expanding Access to Lower Cost Generic Act would grant 180-day market exclusivity for a generic drug to the second manufacturer who files an abbreviated new drug application (ANDA) with the FDA if the first manufacturer who files ANDA fails to market its generic version within 75 days of brand equivalent’s loss of exclusivity.
- The Ensuring Timely Access to Generic Act would allow the FDA to deny a citizen petition if the petition is submitted primarily to delay approval of generics or biosimilars or if the petition fails to raise valid scientific or regulatory issues. Currently, the FDA may deny a citizen petition if the petition meets both requirements.
House Republicans Pass Bill Raising Debt Ceiling and Cutting Fiscal Spending
Last Wednesday evening, the Republican controlled House narrowly passed their debt limit and spending-cuts bill, titled Limit, Save, Grow Act of 2023, after extensive debate and concessions, including removing changes to incentive structures for renewable and biodiesels, and stricter work requirements for Medicaid coverage. The bill passed in a 217-215 party line vote, with four Republicans and all Democrats opposing it. The bill is set to advance to the Senate, where it is not expected to pass a vote.
The Congressional Budget Office (CBO) released its estimates of the budgetary effects of work requirements for the Medicaid program as proposed the Limit, Save, Grow Act of 2023. Under the proposed Medicaid work requirement policy, states would lose federal Medicaid funding for able-bodied adults ages 19 to 55 without dependents if those recipients fail to meet the requirement for three or more months during a calendar year. CBO expects that about 15 million people could be subject to the Medicaid work requirements each year, but noted many would qualify for an exemption. CBO also estimates that this policy would decrease federal spending by about $109 billion over the 2023–2033 period, and expects about 1.5 million adults, on average, would lose federal funding for their Medicaid coverage across all states. However, CBO projects that most states would cover the cost of insurance coverage for about 900,000 of the adults who lose coverage at a cost of about $65 billion over the 2023–2033 period.
Energy & Commerce Subcommittee Holds Hearing on Transparency, Competition in Health Care
Last week, the House Energy and Commerce Health Subcommittee held a hearing on transparency and competition in the U.S. health care system. Health Subcommittee Chair, Rep. Brett Guthrie (R-KY) delivered opening remarks highlighting the consideration of 17 bills focused on price transparency and lowering costs in the health care system. Reps. Anna Eshoo (D-CA) and Cathy McMorris Rodgers (R-WA), and Ranking Member Frank Pallone (D-NJ) began the hearing by providing additional statements on the importance of specific bills to improve health care quality while decreasing costs for patients. Vice Chair Larry Bucshon (R-IN) touched on Kaiser Permanente’s acquisition of Geisinger Health while discussing concerns regarding growing consolidation across a variety of health care industries. The hearing covered a number of additional topics, including but not limited to:
- Rising healthcare costs
- The role of PBMs in the marketplace
- Medicaid work requirements
- Consolidation in healthcare markets
- Inflation Reduction Act concerns
- CMS decision to not provide coverage for FDA accelerated approval of Alzheimer’s drug
- No Surprises Act implementation concerns
- Improvements in health equity and price transparency
- Medicaid DSH Payments
Healthsperien Releases Summary of 2024 Medicare Advantage and Part D Final Rule
On April 5th, 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.
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.
- Last 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) to 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.
On Thursday, Senate Finance Committee Chair Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) released a bipartisan framework that the committee will use to pursue legislative solutions to modernize and enhance federal prescription drug programs, with the goal of reducing drug costs for patients and taxpayers. The framework comes on the heels of a Finance Committee hearing last month, which examined pharmacy benefit managers’ (PBM) practices, and the impact on costs to patients and taxpayers. The document outlines four key challenges facing federal prescription drug programs, including: 1) Misaligned incentives that drive up prices and costs 2) Insufficient transparency that distorts the market 3) Hurdles to pharmacy access 4) Behind-the-scenes practices that impede competition and increase costs
- 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.
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.
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.
- 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.