HealthCare Roundtable e-News – November 13, 2023

Top News

Senate Finance Committee Advances Broad Health Care Package

The Senate Finance Committee unanimously voted to advance a broad health package containing sweeping reforms to address physician pay, mental health, and prescription drug pricing reform. The Better Mental Health Care, Lower-Cost Drugs, and Extenders Act passed out of committee 26-0. 56 amendments were considered during the markup, but all of the amendments were withdrawn.

Of note, the package contained several provisions aimed at increasing access to pharmacies and prescription affordability for Medicare Part D beneficiaries. It does so by creating an “essential pharmacy” status to mandate inclusion of smaller pharmacies in medically underserved areas within the Medicare Part D network, and by establishing standards for pharmacy quality assessments for in-network participation. These pharmacies will also receive guaranteed minimum reimbursement that equals national average drug acquisition costs determined through nationwide pharmacy surveys by HHS. The draft also attempts to shift the burden of cost-sharing for beneficiaries with coinsurance from a percentage of list price to a percentage of estimated net price. A discussion draft released last week also included provisions to mandate favorable coverage of biosimilars, when compared to their reference biologic drugs. However, the provision was removed ahead of the markup due to Congressional Budget Office not yet scoring the policy.

 

CMS Releases CY 2025 Medicare Advantage and Part D Proposed Rule

The Centers for Medicare and Medicaid Services (CMS) released their annual Medicare Advantage (MA) and Part D Proposed Rule for 2025 (fact sheet) which governs requirements for MA and Part D plans. Among its provisions, the proposed rule promotes enrollment in aligned Dual Eligible Special Needs Plans (D-SNPs), requires additional outreach on supplemental benefits, institutes new network adequacy requirements for behavioral health providers, institutes new guardrails for agents and brokers, requires an annual health equity analysis of Utilization Management policies, and revises certain appeals processes.

Of note, the proposed rule also provides more flexibility to substitute lower cost biosimilar biological products for their reference products. Currently, Medicare Part D sponsors may remove a reference biologic from Part D formularies if they add an interchangeable biosimilar through a maintenance change request. A maintenance change allows Part D sponsors to make mid-year changes on a semi-monthly basis; and removal of a reference biologic is not considered a maintenance change if a non-interchangeable biosimilar is added to the formulary. The FDA draws a distinction between a “biosimilar” and an “interchangeable biosimilar”, where the latter denotes therapeutic equivalence, but former does not. The proposed rule includes a provision that would allow Part D sponsors to remove the reference biologic from their formularies while adding any biosimilar, regardless of interchangeability status. Such a change may yield greater cost savings for beneficiaries and Part D sponsors as majority of the biosimilars in the U.S. do not have the interchangeability designation.

Congressional Action

  • A group of 32 U.S. Representatives, led by Judy Chu (CA-28) and Jerrold Nadler (NY-12), have sent a letter to CMS Administrator Chiquita Brooks-LaSure urging increased oversight of artificial intelligence (AI) and algorithmic software tools used in Medicare Advantage (MA) plans. The lawmakers expressed concern about the growing use of AI and algorithms in determining coverage decisions for services, which has led to more restrictive coverage and frequent denials of care in MA plans. They called on CMS to require MA plans to report prior authorization data, compare the guidance generated by AI tools with actual coverage decisions, and assess the data used for determinations to prevent inappropriate use of race or other factors in algorithms. The letter is endorsed by various organizations and advocates for the protection of seniors and Medicare enrollees’ access to necessary care. The Representatives emphasize the need for stronger oversight and regulation to ensure that MA plans provide medically necessary care and that AI and algorithmic tools do not obstruct access to care for seniors and individuals with disabilities. They argue that understanding how AI is being used by Medicare Advantage insurers and holding bad actors accountable are critical steps to safeguarding the Medicare program and its beneficiaries.
  • U.S. Representatives Mike Flood (R-NE) and David Trone (D-MD) introduced the Improving Measurements for Loneliness and Isolation Act of 2023 (one-pager), which would establish a working group that would develop standardized measures for loneliness and isolation. This bill convenes representatives from several federal agencies (HHS, CMS, CDC, ACL, NIH, SAMSHA, AHRQ, and others) and six states with the highest and lowest mental health workforce shortages to unify existing efforts to increase social connection. Through clarified measures and definitions, public and private groups can communicate their efforts with accuracy and leverage each other’s findings. Improved, reliable findings and data will offer federal and local governments a clearer understanding of existing challenges and potential solutions. Companion legislation will also be introduced in the Senate by Senator Pete Ricketts (R-NE).

Research

  • The Peterson-KFF Health System Tracker published an analysis which examines the share of out-of-network surprise billing disputes initiated through the federal IDR process in the first year of the No Surprises Act. The No Surprises Act, which became effective in 2022, aims to protect consumers from unexpected medical bills and involves a process where the medical provider and health plan would negotiate a payment for the service provided or end up in an IDR process. The analysis found that over 300,000 surprise billing disputes were initiated through the federal independent dispute resolution (IDR) process starting in April 2022 through March 2023, far exceeding CMS’s initial estimate of less than 18,000 for the year. Roughly 13% of these disputes received payment determinations, while 19% were closed for various reasons, and nearly 7 in 10 disputes (68%) remained unresolved. While several provider groups have sued regarding the No Surprises Act and its implementation, the federal government recently proposed several changes, with the goal of making the IDR process more efficient and increasing early communication between the parties.
  • Health Affairs recently published a study conducted by the Agency for Healthcare Research and Quality (AHRQ) which examined the sources of financial strain for patients paying for healthcare in the United States. The study analyzed 2018 and 2019 data from the Medical Expenditure Panel Survey (MEPS), a nationally representative survey of the US civilian noninstitutionalized population. The findings highlight the ongoing challenges that U.S. residents face in paying for healthcare, despite the Affordable Care Act’s efforts to increase insurance coverage. The data shows that a significant percentage of individuals and households are still experiencing financial strain due to healthcare costs, whether through high out-of-pocket spending, medical debt, or postponed care. Notably, out of the individuals surveyed, 7.5 percent resided in households burdened by significant out-of-pocket expenses, 8.4 percent had reported medical debt, and 18.8 percent had to delay or forgo medical care. Collectively, 27 percent of respondents acknowledged experiencing one or more of these indicators, and when a broader definition of “financial strain” was applied, this figure increased to 45.4 percent. In addition, those with employer-sponsored insurance had substantially fewer health care financial problems than those with private nongroup, Medicaid, other public, or no coverage. These statistics underscore the need for continued efforts to address healthcare affordability and access issues in the nation.

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