Biden admin proposes overhauls to lambasted out-of-network billing dispute resolution process

By Dave Muoio - The Biden administration has proposed a new rule refining several aspects of the healthcare services billing process in response to criticisms levied from all sides of the industry. Read Full Article…

VBA Article Summary

1. Enhanced Communication and Efficiency Measures: The proposed rule unveiled by the administration aims to streamline the No Surprises Act's IDR process by introducing requirements for improved communication between payers and providers. Notably, payers would need to provide additional information with their initial payments or denial notices, such as the qualifying payment amount and relevant contact details to facilitate open negotiations. This enhancement is expected to reduce ineligible payment disputes and clarify the timelines for the open negotiation period, creating efficiencies and expediting payment determinations.

2. Reduced Administrative Costs and Dispute Volume Control: In response to the volume of disputes and administrative fees associated with the IDR process, the new rule proposes a reduction in fees, especially when offers made during open negotiation are below a certain threshold. To manage high volumes of disputes, an eligibility review process will be instituted, allowing the government to intervene and help clear backlogs. Moreover, the rule introduces provisions for "batching" related payment disputes and extends the timeline for certain extenuating circumstances, all aimed at reducing the burden on the system.

3. Legislative Intent and Consumer Protection: Acknowledging the importance of the No Surprises Act as a critical consumer protection measure, the proposed rule seeks to realign the IDR process with Congressional intent and address the concerns raised by lawmakers, providers, and payers. By refining the process and implementing these new rules, the Biden-Harris Administration emphasizes its dedication to protecting patients from surprise billing and maintaining the integrity of consumer protections. Secretary Xavier Becerra and other officials have been active in ensuring that the legislation's rollout continues to evolve in response to feedback and legal challenges.

Blue Shield of California is promising a simpler, cheaper pharmacy benefits model. Can it deliver?

By Rebecca Pifer - Blue Shield of California wants to replace its middleman. The health insurer, one of the largest in the nation’s most populous state, revealed in August it will drop CVS Caremark as the sole manager of its pharmacy benefits. In Caremark’s place, Blue Shield of California will contract out the job to five separate companies. Read Full Article…

VBA Article Summary

1. BSCA's Bold Move Against High Drug Costs: Blue Shield of California's strategy aims to overhaul the traditional PBM model by taking direct control of pharmacy benefits and partnering with various vendors, including Amazon and Mark Cuban Cost Plus Drug Company. This daring initiative is projected to save $500 million annually, challenging the status quo of high drug prices facilitated by major PBMs and addressing widespread criticism about their opaque pricing and practices.

2. Market Impact and Industry Skepticism: The announcement of BSCA's plan triggered a drop in CVS' stock price, indicating investor concern over potential disruptions in the PBM market. However, industry experts suggest the market's reaction may be exaggerated and express doubt about the feasibility of BSCA's plan to achieve the promised savings. Questions remain about BSCA's ability to manage benefits across multiple vendors and the impact on its relationship with employer clients.

3. A Test for Pharmacy Benefit Overhaul: BSCA's experiment could signal a new direction for payers eager to reduce prescription costs, potentially setting a precedent in a sector facing intense scrutiny. Although BSCA's strategy is seen as an ambitious attempt to cut costs by securing higher rebates and encouraging the use of cost-effective drug dispensing options, experts like Mike Fox and Jon Reid are cautious, acknowledging the innovative approach but questioning the actual savings that can be realized.

COVID-19 treatments to enter the market with a hefty price tag

By Amanda Seitz - The COVID-19 treatments millions of Americans have taken for free from the federal government will enter the private market next week with a hefty price tag. Read Full Article…

VBA Article Summary

1. Pfizer's Paxlovid, a five-day COVID-19 treatment, has been priced at $1,390 for the regimen, while Merck's Lagevrio will be available in the market soon. Despite the set price for Paxlovid, Americans can currently access the medication without cost due to the availability of millions of free courses funded by U.S. taxpayer dollars, which are distributed across various healthcare facilities.

2. The stockpile of these free treatments provided by the U.S. government is maintained in pharmacies, hospitals, and doctors' offices nationwide, as per the announcement from U.S. Health and Human Services officials. This measure ensures that, for the time being, patients do not have to bear the financial burden of these COVID-19 treatments.

3. The arrangement for these free treatments dates back to an agreement from 2021 when the U.S. government contracted with Pfizer for over $5 billion to secure 10 million courses of Paxlovid. This preemptive purchase was aimed at ensuring widespread access to the treatment during the pandemic, with provisions for these costs eventually shifting towards private insurance copays as government-supplied stocks deplete.

Payers shortchanged $1.1B in ACA risk adjustment payments as Bright, Friday fail to meet obligations: CMS

By Paige Minemyer - Bright Health Group and Friday Health Plans are both unable to pay their dues into the 2022 Affordable Care Act (ACA) risk adjustment pool, costing their peers more than $1 billion, according to a notice from the Biden administration. Read Full Article…

VBA Article Summary

1. Significant Payment Shortfall: The Centers for Medicare & Medicaid Services (CMS) revealed that although Bright Health made a considerable payment towards its risk adjustment obligation for 2022, it fell short by nearly $380 million of the $1.9 billion due. The majority of this deficit, amounting to $199.3 million, arises from Bright's operations in Florida. Bright Health has since withdrawn from the ACA exchanges and did not participate in 2023, prompting CMS to collaborate with the company and state insurance regulators to formulate a repayment strategy for the owed funds.

2. Expert Analysis and Criticism: Ari Gottlieb of A2 Strategy Group has been vocal on social platforms about the repayment plans, expressing confusion and dissatisfaction with the terms of the deal between CMS and Bright Health. He questions why CMS would agree to a deal that appears to disadvantage other parties except for CMS and Bright itself. This discourse underscores the complexities and potential drawbacks of the current risk adjustment system as viewed by industry experts.

3. Repercussions and Calls for Program Reform: As Friday Health Plans has failed to make a significant portion of its risk adjustment payments—only contributing 5% of the $780 million it owes—CMS is determined to utilize all available federal debt collection methods to recover the funds. The situation with Friday Health Plans further illustrates the program's vulnerabilities, considering they continued to offer plans and thus will also have a financial obligation for the 2023 risk adjustment. Gottlieb highlights the gravity of the situation, with over a billion dollars expected and owed to other companies not being paid, and suggests that this massive shortfall should catalyze discussions about fundamental changes to the risk adjustment program's structure and implementation.

Medical providers, hospitals call on Congress to extend 5% value-based care incentive

By Michael Popke - The push for value-based payment incentives continues, as more than 630 organizations sent a letter last week urging Congressional leaders to extend incentive payments for participation in risk-bearing alternative payment models (APMs). Incentives expire at the end of the year unless Congress acts. Read Full Article…

VBA Article Summary

1. Investment in Healthcare Innovation: The advanced Alternative Payment Model (APM) incentive payments have enabled healthcare providers to partially offset the costs associated with transitioning to new, value-driven payment models. This financial support has been essential for expanding care teams, developing new patient care improvement programs, and implementing infrastructure for managing population health, ultimately aiming to augment the quality and efficiency of patient care.

2. Broad-Based Support for APMs: The advocacy for sustained APM incentives is widely backed by a coalition of health organizations across the United States. With signatures from various stakeholders—including the National Association of ACOs, the American Medical Association, and others—there is a clear, unified call from healthcare systems, hospitals, physician practices, and accountable care organizations for continued financial backing. This broad support emphasizes the national recognition of the critical role that APMs play in ensuring that clinicians have the necessary resources to provide optimal care to their patients.

3. A Call for Continued Incentives and Value-Based Care: Legislation in 2015 introduced a 5% incentive for providers to adopt APMs, resulting in nearly 300,000 clinicians receiving this benefit. Advocates argue that maintaining these incentives is crucial, as they not only support the transition to high-quality, cost-effective care models but also provide a substantial return on investment. Evidence of this is highlighted by the significant savings ACOs generated for Medicare, surpassing the incentive payments, and the overall reduction in federal spending on Medicare and Medicaid, which some attribute to the cost-efficiency driven by APMs. There is a push for an extension of these incentives to allow Congress time to revamp physician payment structures, reinforcing the aim for improved patient outcomes and reduced healthcare costs.

Why engaged employees can be good for business

By Manar Al Hinai - People quit their jobs for various reasons, whether it is because of a bad manager or to seek a better-paying opportunity elsewhere. However, in recent years, employee disengagement has been ranking high on that list. Read Full Article…

VBA Article Summary

1. Rising Disengagement and Quiet Quitting: A concerning trend identified in Gallup's 2023 State of the Workplace report is the high levels of employee disengagement, with many workers "quiet quitting" - a state where they do the bare minimum at work, leading to a staggering loss of $8.8 trillion globally. These employees are physically present but lack a connection to the purpose of their jobs and feel alienated from colleagues and management, significantly contributing to this economic drain.

2. The Cost of Disconnection and the Value of Engagement: The report underscores the profound impact that workplace engagement has on employees, which extends beyond mere job satisfaction. A positive engagement culture can boost innovation, productivity, and customer service. Companies that succeed in creating a highly engaged workforce see a 13% increase in shareholder returns and benefit from employees taking fewer days off. Conversely, a single disengaged employee can cost a company 34% of that person's salary, revealing the high price of neglecting employee engagement.

3. Cultivating a Purposeful and Supportive Work Environment: Addressing workplace disengagement requires a strategic approach to reshape company culture, aligning employees with the organization’s goals, and fostering a sense of belonging and purpose. Regular meetings to discuss progress, investing in personal growth, and treating employees like family are cited as practical measures. Moreover, providing flexible work options, mental health resources, and opportunities for team bonding are essential steps. This should be a collective effort, where employees are involved in the conversation to make the office a happier place and to ensure that workplace culture changes are not superficial but effective and long-lasting.

Congress Shines Another Harsh Light on PBM Practices

By Gina Shaw - In a rare show of bipartisanship, members of Congress from both sides of the aisle agreed that pharmacy benefit managers (PBMs) have too much power and provide too little transparency, during the second in a series of hearings on the role of PBMs in the healthcare industry. The meeting was held by the House Committee on Oversight and Accountability on Sept. 19, 2023. Read Full Article…

VBA Article Summary

1. Market Control and Anti-Competitive Behavior: The consolidation of the Pharmacy Benefit Managers (PBMs) market has led to an oligopoly, where just three PBMs control 80% of the market. These PBMs are deeply intertwined with major health insurers and pharmacies, creating a situation where negotiations on drug pricing and coverage often occur within a self-serving network or with direct competitors. This lack of competition and transparency is highlighted as a significant factor in escalating healthcare costs and negatively impacting patient care, prompting bipartisan agreement on the need for PBM reform.

2. Impact on Drug Pricing and Patient Access: Witnesses at the hearing outlined the adverse effects of the current PBM practices on drug pricing and patient access. Notably, rebates and formulary preferences set by PBMs are not necessarily aligned with lowering costs or promoting patient access to the most affordable medications. There are instances where PBMs prioritize high-priced branded drugs over more cost-effective alternatives like generics or biosimilars, even when the latter have a significant market share in new prescriptions. Furthermore, a report from the Government Accountability Office (GAO) highlighted that Medicare Part D beneficiaries often pay more out-of-pocket for drugs compared to what their insurance companies pay after rebates, illustrating a disconnect in the system that benefits PBMs at the expense of patients.

3. Calls for PBM Accountability and Reform: Various stakeholders, including industry experts and congressional members, are calling for measures to improve the PBM industry's operations. Proposals include unlinking PBM compensation from drug prices to remove incentives for favoring costlier drugs and ensuring that rebates and discounts benefit patients directly. There is also a push for greater transparency in PBM operations and for regulations that would facilitate a more competitive market, especially by supporting the use of generics and biosimilars. Amidst increasing bipartisan support for change, both Republican and Democratic representatives are advocating for legislative action to address the identified issues with PBMs, including the monopolistic practices that steer patients towards PBM-affiliated pharmacies and impact patient care.

Paying for It: How Health Care Costs and Medical Debt Are Making Americans Sicker and Poorer

By Sara R. Collins, Shreya Roy, and Relebohile Masitha - The Commonwealth Fund Health Care Affordability Survey, fielded for the first time in 2023, asked U.S. adults with health insurance, and those without, about their ability to afford their health care — whether costs prevented them from getting care, whether provider bills left them with medical debt, and how these problems affected their lives. Read Full Article…

VBA Article Summary

1. Widespread Affordability Issues with Health Coverage: The survey highlighted that a significant portion of working-age Americans with health insurance still find it challenging to afford healthcare. Regardless of whether they have employer coverage (43%), marketplace or individual-market plans (57%), Medicaid (45%), or Medicare (51%), insured adults report facing financial barriers to accessing care.

2. Delayed and Forgone Care Due to Costs: A notable number of insured adults reported having delayed or skipped necessary healthcare or prescriptions in the past year due to cost constraints. This includes 29% of those with employer coverage, 37% with marketplace or individual-market plans, 39% with Medicaid, and 42% with Medicare. This delay or lack of care has often led to worsened health conditions.

3. Medical Debt Despite Insurance: Insurance coverage does not necessarily protect against incurring medical debt. Survey results show that a considerable number of insured adults are paying off medical or dental bills—30% with employer coverage, 33% with marketplace or individual-market plans, 21% with Medicaid, and 33% with Medicare. Additionally, medical debt contributes to further delays in seeking care or filling prescriptions, impacting over a third of individuals with medical debt across different types of health plans.