Biden's State of the Union: 13 healthcare takeaways

By Kelly Gooch and Alexis Kayser - During his State of the Union address March 7, President Joe Biden highlighted more than a dozen issues affecting healthcare leaders, from reproductive rights to prescription drug costs. Read Full Article…

VBA Article Summary

1. Expansion of Medicare's Negotiation Power: The President proposed expanding Medicare's ability to negotiate drug prices from 20 to at least 50 drugs per year, targeting vital medications for diseases like heart conditions, cancer, and diabetes. This move aims to significantly reduce the financial burden of these drugs over the next decade.

2. Enhancements in Drug Cost Caps and Rebate Requirements: Efforts to limit out-of-pocket expenses for prescription drugs were emphasized, including expanding the $2,000 cap to all private insurances and extending rebate requirements to commercial sales. These measures are intended to shield consumers from rising drug costs and ensure fairness in pricing.

3. Broad Healthcare Initiatives and Responses to Societal Issues: The President touched on a wide range of healthcare concerns, from closing the Medicaid coverage gap and capping insulin costs to tackling gun violence and supporting veterans through the PACT Act. Furthermore, the emphasis on restoring abortion access and the introduction of the Advanced Research Projects Agency for Health (ARPA-H) highlight a commitment to comprehensive healthcare improvements and innovation.

Biden Team, UnitedHealth Struggle to Restore Paralyzed Billing Systems After Cyberattack

By Darius Tahir, Bernard J. Wolfson and Daniel Chang - Margaret Parsons, one of three dermatologists at a 20-person practice in Sacramento, California, is in a bind. Read Full Article…

VBA Article Summary

1. Cyberattack Disruption and Immediate Impacts: Following a cyberattack on Change Healthcare on February 21, the medical billing and payment processing capabilities of healthcare providers have been severely disrupted, leading to an inability to electronically bill services. The attack has resulted in significant delays for payment processing, with paper claims taking an estimated 3-6 months. The disruption has caused considerable stress among providers, with many concerned about the immediate financial implications for their practices.

2. Government and Industry Response: In response to the crisis, the Centers for Medicare & Medicaid Services (CMS) have been encouraged to allow payment processors to accept paper claims. However, the broader implications of the attack have highlighted vulnerabilities within the U.S. healthcare system to cyber threats and the inadequacies of the current voluntary standards for network protection. Calls for more robust government intervention, including increased funding and focus on cybersecurity for the healthcare sector, are growing.

3. Long-term Consequences and Sector Vulnerability: The attack on Change Healthcare, described by the American Hospital Association as the most significant cyber incident against the U.S. healthcare system to date, has exposed the sector's extensive vulnerabilities to cyberattacks and the limitations of current defense measures. Despite the eventual resolution of technical issues, the incident raises broader questions about the preparedness and resilience of the healthcare industry and the need for comprehensive strategies to protect against future cyber threats, including enhancing cybersecurity measures and resources across the sector.

Federal Trade Commission, the Department of Justice and the Department of Health and Human Services Launch Cross-Government Inquiry on Impact of Corporate Greed in Health Care

By Federal Trade Commission - The Federal Trade Commission, the Department of Justice’s (DOJ) Antitrust Division, and the U.S. Department of Health and Human Services (HHS) jointly launched a cross-government public inquiry into private-equity and other corporations’ increasing control over health care. Read Full Article…

VBA Article Summary

1. Cross-Government Inquiry on Health Care Market Transactions: A comprehensive inquiry is being conducted by multiple government agencies to investigate how health care market transactions, particularly those involving private equity firms and corporate owners, might lead to increased consolidation and profit maximization at the potential cost of patient care quality, worker safety, and affordability of healthcare. The Request for Information (RFI) seeks public comment on transactions by health systems, private payers, and investment funds, including those that might not require antitrust review under the Hart-Scott-Rodino Act.

2. Impact of Private Equity and Corporate Dealings on Health Care: The inquiry highlights concerns that private equity buyouts and corporate tactics such as staffing cuts and reduced care quality can harm patients, with statements from FTC Chair Lina M. Khan emphasizing the need to scrutinize financial strategies detrimental to public welfare. Key officials, including the Assistant Attorney General of the DOJ’s Antitrust Division and the Secretary of Health and Human Services, have voiced the importance of preserving competition in health care to ensure quality, affordability, and fair wages for health care workers.

3. Public Engagement and Future Regulatory Actions: The RFI represents a step towards engaging the public, including patients, healthcare providers, and industry participants, to gather insights on the effects of market consolidation and corporate transactions in the health care sector. Responses will inform future enforcement priorities, regulatory actions, and efforts to promote competition and transparency in health care markets. This initiative is part of broader efforts by the DOJ, FTC, and HHS to reduce healthcare costs, address drug shortages, and improve care quality, with a deadline for public comments set for May 6, 2024.

Medigap rules vary to the ‘extreme’ from state to state, advocates say

By John Hilton - Access to an often much-needed Medigap policy varies greatly by state for those under age 65. That is policy that some health care advocates are eager to see change. Read Full Article…

VBA Article Summary

1. Challenges in Medigap Accessibility for Younger Beneficiaries: Bonnie Burns highlighted a significant gap in healthcare coverage, noting that in the United States, access to Medigap policies for individuals under the age of 65 is severely limited. Despite efforts by more than 30 states to offer some form of Medigap access to younger beneficiaries, only 2% actually have access to this essential supplemental insurance, and just three states offer full access without health or age pricing factors. This situation underscores the need for policy reforms to ensure broader, more equitable access to Medigap for all Medicare beneficiaries.

2. Medicare Advantage Plans: A Double-Edged Sword: The article discusses the growing popularity of Medicare Advantage plans, which now enroll more than half of all Americans with Medicare. However, these plans often come with significant limitations, such as restricted provider networks and coverage gaps, leaving beneficiaries "stuck" and unable to switch back to original Medicare and access Medigap policies. This issue is exacerbated by misleading advertising and the fact that once enrolled in a Medicare Advantage plan, beneficiaries may find it financially unfeasible to leave due to the lack of a secondary insurance plan, highlighting the need for better regulatory oversight and consumer protections.

3. The Role of State Regulations and the Need for Federal Action: The discussion points out the varying state laws that govern Medigap policy enrollment after the initial six-month Medicare sign-up period, which contributes to the disparity in access to supplemental coverage. With 50% of Medicare Advantage enrollees leaving their plan within five years, there's a pressing need for states to provide better options and protections. Moreover, the article mentions federal regulatory initiatives underway and the National Association of Insurance Commissioners' (NAIC) focus on tackling deceptive Medicare Advantage ads, indicating a movement towards improving the marketing and availability of these plans.

Prior authorization changes could save physician practices $15 billion in 10 years

By Thomas Anderson - The CMS Interoperability and Prior Authorization final rule (CMS-0057-F), published on January 17, 2024, will require certain payers and providers to use standardized and interoperable APIs to automate and streamline prior authorization processes. The AMA estimates that the rule will reduce administrative burden and save physician practices $15 billion over 10 years. Read Full Article…

VBA Article Summary

1. Economic and Innovation Benefits: The final rule is projected to generate substantial economic savings, amounting to approximately $15 billion over the next decade for payers and providers, with additional savings expected for patients and other stakeholders. Beyond financial savings, the rule is anticipated to encourage innovation and competition within the health IT market. This is expected to happen as developers and vendors are provided with increased opportunities to create and supply interoperable solutions tailored to the needs and preferences of both payers and providers.

2. Implementation Timeline and Encouragement for Early Adoption: The rule is set to come into effect on January 1, 2026, for most provisions, while specific requirements related to API development and enhancement are slated for a later compliance deadline of January 1, 2027, or beyond, varying by payer type. CMS is urging payers and providers to start implementing the rule ahead of these deadlines to leverage its benefits early and ensure readiness by the compliance dates.

3. Enhanced Interoperability and Streamlined Prior Authorization Processes: Part of a broader effort to advance interoperability and improve the efficiency of prior authorization processes, the rule mandates that affected payers establish and maintain an API to facilitate the electronic submission and exchange of prior authorization requests and decisions. This initiative is aimed at Medicare Advantage organizations, Medicaid, CHIP, and QHP issuers on Federally Facilitated Exchanges, among others. It builds on previous CMS rules to ensure patients' access to their health information and incorporates feedback from stakeholders. The rule sets response deadlines for prior authorization requests and introduces a new measure under the Medicare Promoting Interoperability Program to encourage the adoption of electronic prior authorization processes by providers, offering bonus points for reporting on this measure.

Study: Utilization management has ramped up in Part D over past decade

By Paige Minemyer - Utilization management in Medicare Part D has become more restrictive over the last decade, even when compared to Medicare Advantage prescription drug plans, according to a new study. Read Full Article…

VBA Article Summary

1. Increased Restrictions Over Time: The study by the University of Southern California and Blaylock Health Economics highlighted a significant increase in the utilization management practices, such as prior authorization, step therapy, and formulary exclusions, from 31.9% of drugs in 2011 to 44.4% by 2020. It also noted a specific rise in formulary exclusions, which limit patient access to prescribed medications unless they can successfully appeal or afford to pay out-of-pocket, affecting 44.7% of brand-name-only drugs by the end of the study period.

2. Growing Enrollment in Part D with More Restrictive Formularies: Alongside the more restrictive formularies, there was a notable 56% increase in enrollment in Part D plans, from 33.2 million enrollees in 2011 to 52 million in 2020. This suggests that a larger portion of the population is being impacted by these restrictive practices over time.

3. Variation in Restrictions Based on Drug Cost and Availability: The study also found that the level of restriction varied significantly based on the cost of the drug and the availability of generic options. In 2020, only 16.7% of drugs with generic options and costing $100 or less were subject to restrictions, while 59.5% of similar drugs priced at $1,000 or more faced restrictions. This disparity was even more pronounced for brand-name-only drugs, with 83.7% of those costing $1,000 or more being restricted, highlighting the need for further research into whether these practices are primarily cost-management strategies or if they serve to benefit pharmacy benefit managers at the expense of patient care.

These 3 Changes Must Occur for Hospitals to See Greater ROI from Their AI Investments

By Katie Adams - The hype surrounding AI might have you believe the technology is rapidly transforming the healthcare industry for the better. But in reality, most health systems aren’t seeing a huge ROI from their AI investments yet. Read Full Article…

VBA Article Summary

1. AI vendors need to align their products more closely with health systems' needs: Michael Kalishman highlighted the importance of AI companies focusing on addressing the biggest pain points of health systems rather than just promoting their products' features. There's a significant gap between the capabilities AI vendors tout and the actual business or clinical value these capabilities offer. Vendors should aim to demonstrate how their tools can integrate into existing systems and provide clear benefits, rather than merely showcasing impressive features without tangible outcomes.

2. Enhanced planning for IT integration is crucial: Kalishman pointed out that many AI vendors underestimate the complexity of data integration within health systems. The onboarding process for new AI products often involves navigating through messy, disparate IT systems, a task for which many vendors are not adequately prepared. He argued for the necessity of a more robust technology infrastructure and the involvement of IT experts who can guide health systems through the integration process, ensuring that AI technologies can be adopted and utilized effectively.

3. Focus on discrete use cases over broad platforms: Kalishman suggested that AI companies should start by targeting specific, discrete use cases rather than offering broad, all-encompassing platforms. This approach can lead to more successful initial deployments and a clearer path to return on investment (ROI). He cited the example of Regard, a startup Sentara has invested in, which focuses on a specific application of AI to assist clinicians in diagnosing medical conditions in inpatient settings. This focused approach has proven to deliver tangible benefits and ROI, demonstrating the potential for AI to significantly impact health systems when applied thoughtfully and strategically.

Walgreens plans strategic review of business, including the role of its retail stores, healthcare assets, CEO says

By Heather Landi - Walgreens is gearing up for a strategic review of its business, including the role of its retail pharmacy stores and its healthcare assets, as company leadership and the board plot the future direction of the company, CEO Tim Wentworth said this week. Read Full Article…

VBA Article Summary

1. Strategic Cost-Cutting and Portfolio Optimization: Walgreens is implementing cost-cutting initiatives aimed at reducing $1 billion in expenses this year, including slashing capital expenditures by $600 million. The plan involves closing 60 underperforming VillageMD clinics and exiting five markets to boost profitability, starting with closures in Florida and Illinois. This effort is part of a broader strategy under CEO Wentworth to evaluate and optimize the company's extensive portfolio, including healthcare assets like VillageMD, Summit Health/CityMD, CareCentrix, and specialty pharmacy Shields Health, to ensure alignment with future growth aspirations.

2. Long-term Vision and Digital Transformation: Wentworth, emphasizing a gradual transformation over a "12-month turnaround," outlined a vision for Walgreens that involves a strategic review to refine the company's retail store footprint and healthcare services. This vision includes enhancing the digital and omnichannel experience to meet consumers' evolving preferences for engaging with the company, whether through online orders, drive-thru pickups, or in-store experiences. Wentworth also highlighted the potential of Walgreens as a trusted brand in healthcare, pointing to its role in pharmacy services, clinical trials, and vaccine support as key components of its future growth strategy.

3. Future Growth and Investment Focus: Despite rumors of divesting certain assets, Wentworth clarified the company's commitment to retaining and valuing key components like Shields Health. He also discussed exploring new pharmacy models and emphasized the importance of innovative business units such as the clinical trials recruitment unit, which has proven efficient in speeding up patient recruitment for trials. Furthermore, Walgreens is assessing the feasibility of a potential separation from Walgreens Boots Alliance, indicating a strategic exploration of how to best position its healthcare businesses and smaller assets ("green shoots") for substantial growth within the healthcare ecosystem.

Providers losing $100M daily over Change Healthcare hack: Report

By Giles Bruce - Some larger health systems are losing more than $100 million a day due to the Change Healthcare cyberattack, one cybersecurity firm estimated, causing industry associations to continue to urge action. Read Full Article…

VBA Article Summary

1. Urgent Appeals to Congressional Leaders and HHS: The American Hospital Association (AHA) wrote to Congressional leaders on March 4, requesting the Department of Health and Human Services (HHS) to take decisive action regarding the IT outage affecting hospitals. They urged the HHS to consider any statutory limitations that might restrict federal agencies from offering the necessary assistance. Simultaneously, the American Medical Association (AMA) appealed to HHS for the issuance of guidance and the provision of emergency funding to healthcare providers who are unable to receive payments due to the IT outage. AMA President Jesse Ehrenfeld underscored the severity of the crisis, demanding immediate action to mitigate its impact.

2. Financial Strains on Health Systems: The IT outage, particularly affecting the payer systems of Optum’s subsidiary, has led to significant financial losses for larger health systems, with some reporting daily losses exceeding $100 million. This information, revealed by the cybersecurity firm First Health Advisory, highlights the profound economic impact of the cyberattack on the healthcare sector, stressing the urgency for effective solutions to address the payment interruptions.

3. Inadequate Temporary Solutions: In response to the cyberattack-induced cash-flow problems faced by healthcare providers, Change Healthcare introduced a temporary funding assistance program. However, this measure was deemed insufficient by the AHA, which suggests that the scope of the crisis requires more robust and comprehensive financial support to adequately address the immediate and long-term needs of the affected healthcare providers.

Dialysis providers gain as investors focus on cardiac benefits after Ozempic's latest data

By Pratik Jain and Bhanvi Satija - Shares of dialysis services providers jumped between 3% and 12% on Tuesday as latest data from Novo Nordisk's (NOVOb.CO), opens new tab hugely popular diabetes drug Ozempic indicated a less-than-expected effect in chronic kidney disease patients. Read Full Article…

VBA Article Summary

1. Investor Reactions and Market Impacts: Investors, after reviewing interim data from October, have tempered their expectations regarding the efficacy of GLP-1 drugs like Ozempic, focusing more on their potential to mitigate cardiac events rather than significantly halting the progression of kidney disease. This shift in perspective has influenced various sectors, including bariatric surgery, food companies, and glucose-monitoring device manufacturers, reflecting a broader concern over the drugs' ability to address issues beyond diabetes and obesity.

2. Stock Performance Amidst Clinical Findings: The anticipation surrounding the benefits of GLP-1 drugs for chronic kidney disease has led to notable movements in the stock market, particularly among companies involved in kidney care and dialysis operations. For instance, Colorado-based DaVita and Fresenius Medical's U.S.-listed shares saw significant increases following the release of data indicating that Ozempic could delay the progression of chronic kidney disease in diabetes patients, albeit the results did not meet some investors' high expectations.

3. Future Outlook and Industry Responses: Despite mixed reactions to the late-stage data of Ozempic's trial, companies like DaVita and Fresenius have minimized concerns over the potential market impact of GLP-1 drugs on kidney care services. Analysts, including those from Citi, highlight that the ultimate influence of these drugs on the dialysis sector will be determined by the full trial results expected later this year. Meanwhile, Novo Nordisk, the maker of Ozempic, experienced a slight decline in its U.S.-listed shares, although its stock has seen considerable gains year-to-date, driven by strong demand for its diabetes and weight-loss medications.