CMS finalizes updated fees for No Surprises Act dispute resolution

By Paige Minemyer - The Biden administration released amended fees related to independent dispute resolution under the No Surprises Act. Read Full Article…

VBA Article Summary

1. CMS's Initial Guidance and Subsequent Changes: The Centers for Medicare & Medicaid Services (CMS) initially established fees for the Independent Dispute Resolution (IDR) process, intended to resolve disagreements over out-of-network charges between payers and providers. However, a Texas judge vacated this guidance, leading to a pause in the IDR process. CMS proposed increasing fees from $50 to $350 to cover expenses but later amended this to a $115 administrative fee for disputes. Additional changes include setting separate fees for disputes initiated after January 1, 2025.

2. Arbitration Process and Fee Adjustments: In cases where payers and providers cannot reach an agreement within 30 days, disputes are sent to arbitration. CMS stated it wouldn't adjust fees more than once per calendar year to maintain stability, responding to feedback for greater fee consistency. The costs involved include maintaining and operating the Federal IDR portal.

3. Fees for Certified IDR Entity and Annual Updates: CMS outlined fees for certified IDR entities, who charge for making determinations. The finalized fees range from $200 to $840 for single determinations and $268 to $1,173 for batch rulings. These fees are set annually, and IDR entities can request updates once a year, subject to federal approval.

NHE Fact Sheet

By CMS.gov - According to a new fact sheet, NHE grew 4.1% to $4.5 trillion in 2022, or $13,493 per person, and accounted for 17.3% of Gross Domestic Product (GDP). Read Full Article…

VBA Article Summary

1. Growth and Spending Trends in 2022: The National Health Expenditure (NHE) in 2022 reached $4.5 trillion, marking a 4.1% increase and representing 17.3% of the U.S. GDP. This growth encompassed various sectors with notable increases in Medicare (5.9% to $944.3 billion), Medicaid (9.6% to $805.7 billion), private health insurance (5.9% to $1,289.8 billion), and out-of-pocket spending (6.6% to $471.4 billion). However, there was a decline in spending for Other Third Party Payers and Programs and Public Health Activities by 10.2%.

2. Projections for 2022-2031: Over the next decade, average NHE growth is projected to exceed GDP growth, potentially raising the health spending share of GDP from 18.3% in 2021 to 19.6% by 2031. The insured population is expected to reach a historic high of 92.3% in 2022, with a slight decrease projected by 2031. The Inflation Reduction Act is anticipated to lower out-of-pocket spending on prescription drugs, particularly for Medicare beneficiaries.

3. NHE Variations by Age, Sex, and Geography: In 2020, personal health care spending was markedly higher for the elderly ($22,356 per person) compared to children and working-age individuals. Females incurred higher spending than males, with significant variations across age groups. Geographically, health care spending varied significantly across states and regions, with New York and Utah representing the highest and lowest per capita spending in 2020, respectively. Medicare and Medicaid expenditures also showed notable state-level differences.

Enrollment for 2024 Obamacare plans 33% higher than last year

By Reuters - More than 15.3 million Americans have signed up for health insurance under the Affordable Care Act (ACA) for 2024, a 33% increase from this time last year, according to data released by the Centers for Medicare & Medicaid Services on Wednesday. Read Full Article…

VBA Article Summary

1. Record Enrollment Predicted for 2024: The Biden-Harris Administration has announced preliminary projections indicating that over 19 million people are expected to enroll in healthcare plans through the Affordable Care Act (ACA) marketplace for the year 2024. This surge in enrollment underscores the ongoing impact and relevance of the ACA, commonly referred to as Obamacare, which was a landmark domestic policy achievement of former U.S. President Barack Obama.

2. Enrollment Deadline and Coverage Start Dates: Individuals interested in selecting a healthcare plan for 2024 under the ACA must complete their enrollment by January 16, 2024. It's important to note that for those who wish to have their coverage commence from February 1, 2024, this is the final deadline. However, for coverage to have started from January 1, 2024, the enrollment should have been completed by December 15 of the previous year.

3. Current Enrollment Figures: Recent data from the U.S. Department of Health and Human Services reveals that nearly 7.3 million Americans have already signed up for health insurance through the ACA marketplace for the upcoming year. This figure, representing early enrollment, indicates a strong and sustained interest in the ACA plans, hinting at the potential for reaching or even surpassing the projected enrollment numbers for 2024.

Key Moves CFOs Must Make Amid Price Transparency and PBM Reform

By Amanda Norris - The Lower Costs, More Transparency Act, a bipartisan healthcare policy bill, recently passed the House of Representatives, setting the stage for a potential shake-up for healthcare organizations. Read Full Article…

VBA Article Summary

1. Medicare Drug Payment Equalization: The legislation proposes to equalize payments for drugs in Medicare, regardless of whether they are administered in hospital outpatient departments or in doctors' offices. This change aims to create a more uniform payment structure across different healthcare settings.

2. Delayed Payment Cuts and Price Transparency Focus: The bill plans to postpone payment cuts for hospitals that serve a high number of uninsured patients until 2026, extending the deadline from the originally planned 2023. Additionally, it emphasizes the need for increased price transparency in healthcare organizations, which are currently facing challenges in meeting these requirements.

3. Impact on CFOs and Transparency Reforms for PBMs: Hospital and health system CFOs need to be aware of the financial implications of the bill, particularly the site-neutral policy on drug reimbursements in Medicare, which could reduce hospital payments by over $3.7 billion over ten years. The legislation also seeks to reform transparency for Pharmacy Benefit Managers (PBMs), addressing spread pricing and requiring the disclosure of rebates and compensation, thus potentially affecting the financial strategies of healthcare institutions.

Most Employers Offering Retiree Health Plans Use Medicare Advantage

By Kelsey Waddill - Most large employers used to offer retiree health plans, but in 2023, only a fifth of them did, according to a KFF brief. Among those that do, many have turned to Medicare Advantage to supply these supplemental benefits. Read Full Article…

VBA Article Summary

1. Decline in Employer-Provided Retiree Health Plans and Shift Towards Medicare Advantage: Over the last three decades, the proportion of large employers offering retiree health plans has significantly declined, from 66% to 21%. In 2023, over half of these employers (52%) are providing retiree health benefits through Medicare Advantage plans, a substantial increase from 26% in 2017. This shift reflects an effort by employers to reduce costs associated with retiree health benefits.

2. Strategies for Cost Management and Concentration Among Larger Firms: Employers are adopting various strategies to manage the costs of retiree health benefits. These include increasing member cost-sharing, transitioning to defined contributions, and capping liability. Notably, larger firms with over 5,000 employees are more inclined to use Medicare Advantage, with 60% doing so in 2023 compared to 29% in 2017. For firms with 200 or more employees, 65% only offer retiree health benefits through Medicare Advantage, marking a sharp increase from 44% in the previous year.

3. Benefits, Limitations, and Impact on Medicare Spending: While 27% of employers cite lower costs for retirees as the primary reason for adopting Medicare Advantage plans, these plans also have drawbacks. Retirees may face more restricted provider options and increased prior authorization requirements, potentially limiting access to care. Moreover, the growing reliance on Medicare Advantage plans raises concerns about higher Medicare spending and the financial stability of the Medicare Trust Fund, as Medicare pays more for enrollees in these plans compared to traditional Medicare.

Survey: Most Washington small businesses saw health premium increases this year

By Michelle Thompson - Nearly all of Washington small businesses experienced health premium hikes throughout the past year and are expecting an additional 9% increase next year, according to a new survey. Read Full Article…

VBA Article Summary

1. Widespread Impact of Rising Healthcare Costs: The Small Business for America’s Future (SBAF) survey, involving 1,015 small business owners, revealed a staggering 97% experiencing increased healthcare rates, with about a third facing hikes over 15%. This situation is significantly affecting businesses' growth prospects and their financial stability, as highlighted by Jill Nelson of Hot Diggity!. The survey further indicated that soaring healthcare costs are a major factor in hiring difficulties for small businesses in Washington, with 81% acknowledging this impact.

2. Challenges in Employee Recruitment and Retention: The U.S. Chamber of Commerce's separate survey echoes similar challenges, noting a worker shortage faced by small businesses. Nearly half of these businesses struggle to offer competitive pay and benefits, and 60% find it hard to meet existing employees' salary expectations. SBAF's findings also show that 51% of small businesses do not provide health insurance due to its high cost, underlining the critical challenge of balancing employee welfare with financial constraints.

3. Solutions and Innovations in Healthcare Coverage: The Society of Collision Repair Specialists (SCRS) has introduced a benefits center offering up to 20% savings on healthcare coverage through plans with $0 deductibles and no-cost services for various healthcare needs. Furthermore, SCRS's partnership with Decisely and Gravie provides flexible enrollment options and transparent, cost-effective plans. These initiatives not only help small businesses offer better healthcare benefits but also aim to improve employee retention, as emphasized by Kevin Dunn of Decisely, who notes that such benefits are crucial for maintaining a loyal and motivated workforce.

UnitedHealth, OptumRx sued by independent pharmacy over ‘unconscionable’ fees

By Rebecca Pifer - As 2023 draws to a close, pressure has been heating up on PBMs over their business practices, including from Congress, the CMS and antitrust agencies. Read Full Article…

VBA Article Summary

1. Lawsuit Allegations Against OptumRx: Independent pharmacies have filed a lawsuit against OptumRx, a Pharmacy Benefit Manager (PBM), arguing that the company imposes unfair Direct and Indirect Remuneration (DIR) fees and performance metrics. These fees are criticized for being based on factors beyond pharmacies' control, such as patient outcomes or doctors' prescribing decisions. The lawsuit claims these fees are "nonsensical" and "arbitrary." If pharmacies do not accept these fees, they risk being excluded from the OptumRx network, which is significant as it covers nearly one-quarter of Medicare beneficiaries in PBM-affiliated plans.

2. Response from the National Community Pharmacists Association and OptumRx: The National Community Pharmacists Association (NCPA) has expressed support for the lawsuit, with its CEO labeling PBMs as "21st-century robber barons." In contrast, OptumRx has defended its practices, stating that the lawsuit is without merit and that they are proud of their partnerships with community pharmacies.

3. Wider Context and Legislative Actions: This lawsuit reflects broader concerns about the impact of PBMs on independent pharmacies, especially in rural areas, leading to an increase in "pharmacy deserts." The U.S.'s largest PBMs, which control 80% of prescriptions, are all known to impose DIR fees. These fees have seen a significant increase, growing over 1,000 times from 2010 to 2020. In response to these practices, the CMS has taken steps to limit PBMs from imposing fees after the point of sale, and the House recently passed a bipartisan bill targeting PBM practices, including a ban on spread pricing in Medicaid and requiring transparency in rebates and fees.

Study suggests PBMs are gaming pharmacy system to overcharge for drugs

By Alexandra Pecci - The blame for high drug prices is usually pinned squarely on pharma companies, which make headlines when drugs like Hemgenix have $3.5 million price tags and companies battle against Medicare drug pricing negotiations. Read Full Article…

VBA Article Summary

1. Significant Overpayment for Generic Drugs in Medicare: A recent study published in the Journal of the American Medical Association reveals that Medicare Part D is overpaying for generic drugs, with markups reaching as high as 7,000%. The research, conducted by the Skaggs School of Pharmacy and Pharmaceutical Sciences at the University of California San Diego, West Health, and the University of Washington, indicates that private insurers sponsoring Medicare Part D are responsible for artificially inflating these costs. This overpayment has been observed anecdotally but now is evidenced through this study.

2. Impact on Drug Pricing and Patient Costs: The inflated reimbursement rates for generic drugs within the Medicare Part D program have a direct impact on patients. The study highlights how such overpricing leads to higher out-of-pocket expenses for patients, as cost-sharing is based on these inflated reimbursement rates. For example, a patient’s 30% copay is calculated on the elevated drug price, and pharmacy benefit managers (PBMs) gain profit from these markups. The study also pointed out extreme cases of overpricing, such as the cancer drug Imatinib and the antipsychotic Aripiprazole, where reimbursement rates far exceeded acquisition costs.

3. Implications for Healthcare Policy and PBM Reform: The findings of this study are significant given Medicare's role as the largest healthcare payer in the U.S., with over 50 million beneficiaries enrolled in Part D plans. In 2021, Medicare Part D’s total gross spending was $216 billion. Given that 90% of all prescriptions in the U.S. are for generic drugs, these findings highlight the need for PBM reform and greater transparency in drug pricing. The study's implications are gaining attention from lawmakers and regulatory bodies like the Federal Trade Commission, which is investigating the potential anticompetitive practices of PBMs. This could lead to legislative actions aimed at controlling drug prices and ensuring fair competition in the pharmaceutical industry.

Modest drug costs hikes predicted for 2024. Drug expenditures are a different story

By John Commins - The pharmaceutical sector is a hive of activity these days, buzzing with breakthrough treatments for stubborn diseases such as Alzheimer's and obesity, and with sickle cell anemia, an outfight cure. Read Full Article…

VBA Article Summary

1. Expensive New Drug Treatments and Healthcare Economics: The article highlights the high cost of new drug treatments, such as the gene therapy for sickle cell anemia costing nearly $3 million per patient. Eric Tichy, Pharm.D., MBA from the Mayo Clinic emphasizes the need to distinguish between drug costs and drug expenditures. He also discusses the impact of the Inflation Reduction Act in preventing significant inflation of drug prices and the challenges the healthcare system faces in adapting to expensive one-time treatments as opposed to long-term chronic therapies.

2. Rare Conditions and Market Dynamics: Tichy points out that new drugs often target rare conditions, necessitating high prices to maintain profitability for manufacturers. This situation is influenced by the Orphan Drug Act, which incentivizes the production of such medications. Additionally, there is a distinction between drug prices and expenditures, with the latter expected to rise due to new treatments for previously untreatable conditions or ineffective existing treatments.

3. Ethical Dilemmas and Future of Healthcare Delivery: The article delves into the ethical and financial challenges healthcare systems face in providing ultra-high-cost therapies, especially when insurance companies don't cover these treatments. Tichy predicts a potential shift in healthcare delivery, where specialized treatments for rare conditions might be centralized in a few large institutions. He also discusses the role of AI in improving the efficiency of identifying eligible patients for specific treatments but cautions about potential biases in AI due to limited diversity in clinical trial data.