Alabama Medicaid reforms will bring regional control and coordination of primary care services through seven Alabama Coordinated Health Networks (ACHNs) serving more than 700,000 Alabama Medicaid enrollees, according to Alabama Arise. Every ACHN will have a Consumer Advisory Committee, a new accountability provision that advocates hope will increase consumer oversight. Moreover, each ACHN will receive funding to develop and implement Quality Improvement Projects focused on three initial priorities (childhood obesity, infant mortality and birth outcomes, and substance use disorders). Alabama’s Medicaid reforms are an encouraging move toward improved patient-centered care.
California enacted a first-in-the-nation state law to combat pay-for-delay deals, in which brand-name pharmaceutical manufacturers pay a generic competitor to settle patent litigation and keep a lower-cost version of the drug off the market, reports NASHP. Delaying market entry of generic drugs can keep prices for brand-name drugs high, costing California consumers an estimated $3.5 billion in higher drug costs each year.
A study of California’s 2017 surprise billing law – which requires fully-insured plans to pay out-of-network physicians at in-network hospitals – found significant reductions in the share of services delivered out-of-network by certain specialties at inpatient hospitals and ambulatory surgical centers since the law went into effect. The decline ranged from 15 percent (for pathology services) to 31 percent (for neonatal-perinatal medicine). Additionally, the share of emergency medicine services delivered out-of-network dropped by 5 percent in the period after the law took effect.
For the first time since Colorado opened its health insurance exchange, people will see a drop in coverage prices, according to the Canon City Daily Record. Coverage costs across the state will drop by an average of 20.2 percent. In western Colorado, which has some of the highest health insurance premiums in the U.S., a family of four will save an average of $10,000 per year, according to the Colorado Division of Insurance. The main reason for the price cut is the state’s new reinsurance program, which uses $260 million in state and federal funding to cover some of the most expensive medical costs for those who purchase plans through the marketplace.
Connecticut’s “Centers of Excellence” network will enable state residents to identify which providers perform best for certain procedures, helping them make informed decisions about where to receive their care, reports The CT Mirror. By steering patients to providers who offer cost-effective treatments, the state hopes to reduce its healthcare costs by millions of dollars in the 2019 and 2020 fiscal years combined. The resource will be released in 2020 and will serve an estimated 210,000 state employees, retirees and dependents.
A report forecasting the implications of Medicaid expansion in Florida predicts that over 800,000 Floridians would gain coverage within the first five years of expansion. Additionally, the move could free up $119.3 million in state funds and fiscal gains may occur in corrections, public health, and uncompensated care for uninsured Florida residents.
Sunflower, a subsidiary of Centene, will be required to issue more than $25 million in health insurance rebates to nearly 19,000 Kansans who purchased Ambetter individual health plans, reports KCUR. The rebates are required by the Affordable Care Act (ACA), which specifies that insurers must spend a certain proportion of what they collect in premiums — usually 80 percent — on their members’ healthcare. The rest can go toward the company’s own costs and profits. Sunflower’s hefty refund puts Kansas’ average rebate at more than $1,000, or seven times the national average. The state’s insurance department, which regulates premiums, has asked Sunflower for information about how it landed so far above the ACA threshold.
Nexus Montgomery, a collaboration between six competing Maryland hospitals, has created a cross-continuum of care partnership that includes skilled nursing facilities, according to Home Health Care News. The goal of this pilot is to leverage non-medical home care to help consumers live safely and independently in their homes. As hospitals are subject to financial penalties for high readmission rates, especially within Maryland’s global budget system, pilots such as this one may help keep people healthier and out of the hospital.
Annual Report on the Performance of the Massachusetts Healthcare System: 2019
By Center for Health Information and Analysis | October 2019
In 2018, Massachusetts met the Total Health Care Expenditures benchmark set by the Health Policy Commission, growing by 3.1 percent to $8,827 per resident, according to analysis by the Center for Health Information and Analysis. The report also notes that the public insurance program, MassHealth, launched its accountable care organization (ACO) program in 2018 and shifted more than 60 percent of its members to an ACO in that year. Alternative payment model (APM) adoption declined slightly among commercial health plans in 2018, especially within smaller plans.
Legislation aimed at overhauling Massachusetts’ healthcare system was introduced this month, according to the Boston Globe. Among other things, the legislation would require an increase in spending by hospitals and insurers of 30 percent over three years for primary care and behavioral health, without increasing overall spending. This move to reshape the delivery of services reflects the concern that less than 15 percent of total medical expenses are spent on primary care and behavioral health combined. In addition, this legislation would streamline the behavioral health provider credentialing process. Also of note, this legislation would seek to create more extensive state oversight of drugs that cost over $50,000 per person per year, even if bought through the private market.
The Michigan Department of Health has proposed removing pharmacy benefit managers (PBMs) from overseeing prescription drug claims and negotiating prices for the state’s Medicaid program in a hope to save Medicaid dollars, according to Modern Healthcare. The department expects the proposal will save the state about $40 million, streamline administrative processes and ensure uniform drug coverage for Medicaid enrollees. Other states have stopped outsourcing prescription drug services to PBMs after studies found that PBM prices often exceed Medicaid fee-for-service drug prices. While PBMs defend their practices by stating that they address high drug prices by negotiating payment rates from pharmaceutical companies by leveraging formularies and utilization management tools; critics assert that PBMs have an incentive to prioritize high-priced drugs over more cost-effective alternatives.
With enrollment for Minnesota’s health plans set to begin, many are watching to see the effects of insurers’ recent announcements of insulin out-of-pocket caps, according to the Star Tribune. Those who purchase coverage through MNsure or from Medica and UCare will have their out-of-pocket spending on each insulin prescription capped at $25 per month, regardless of annual deductibles. When asked, insurance companies have explained that an amendment in the state’s recent omnibus healthcare spending law makes it illegal for Minnesota insurers to profit from selling insulin. Consumers who use insulin note that it is an important necessity for them, but that other medical necessities are still expensive, like insulin pumps and glucose monitors.
The University of Missouri has created a week-long immersion program designed to inspire future doctors, pharmacists and nurses to practice in rural communities, reports KCUR. Program participants meet with local leaders and healthcare providers, as well as tour local businesses, to understand the role of a healthcare provider in the community at large. This program is different from the university’s other rural healthcare recruitment initiatives because it focuses on giving students a picture of life in a small town.
Medicare cut payments to nine Montana hospitals as part of a program that aims to drive hospitals to reduce unnecessary patient readmissions, according to the Bozeman Daily Chronicle. This is the largest number of hospitals in the state penalized in a single year for failing to meet the federal standard, reports a Kaiser Health News analysis.
Nevada is imposing $17.4 million in fines on 21 diabetes drug manufacturers that have either failed to comply with or were many months late in complying with a drug pricing transparency law passed two years ago, reports The Nevada Independent. The law, which was passed by the Legislature in 2017, requires diabetes drug manufacturers to annually report to the state production costs, administrative expenditures, profits, financial assistance, coupons, and other information. It also requires manufacturers to provide additional information for drugs determined to have experienced a significant price increase, including a list of each factor that contributed to the increase and the percentage of the total increase attributable to each factor.
New Hampshire highly regarded NH HealthCost transparency tool does not always discuss facility fees, which are increasingly common, according to the New Hampshire Union Leader. These fees are applied by medical offices, urgent care centers and clinics affiliated with hospitals to better spread costs across the network to boost revenue, but they’re poorly disclosed and carry a high cost compared to the services provided. Though some insurance companies are working to reimburse more for facilities fees, customers can still be caught off guard. Consumers want more easy-to-use transparency tools.
Due to a recently-legislated incremental minimum-wage increase from $8.85 in 2019 to $15 by 2024, some New Jersey workers could lose Medicaid eligibility, according to a report by the Urban Institute. However, the report notes that the number of those who will lose eligibility and coverage will be small relative to the number who will experience a wage increase. Those at risk of losing Medicaid coverage constitute less than 5 percent of all nondisabled, nonelderly adult Medicaid enrollees in the state, and all of those who would lose Medicaid eligibility would remain in the income range allowing them to qualify for subsidized coverage on the marketplace.
Recently released data from the New York Department of Financial services has revealed that the state’s arbitration process, created through legislation in 2018, may substantially increase what New Yorkers pay for healthcare, according to a report by USC-Brookings Shaeffer Initiative for Health Policy. New York’s recent law uses what’s known as a “baseball-style” arbitration process, through which the arbiter must decide whether final payment should be the insurer’s initial allowed amount or the provider’s charges. Researchers’ main concern is the state’s guidance that arbiters should consider the 80th percentile of billed charges when determining the final payment amount, and the data reveal that arbitration decisions have averages 8 percent higher than the 80th percentile of charges. Therefore, researchers believe that high out-of-network reimbursement attainable through arbitration has likely increased emergency and ancillary physician leverage in negotiations with commercial insurers, leading to providers dropping out of networks to obtain higher payment, thereby extracting higher in-network payment rates, or some combination, which would increase premiums.
North Carolina’s Medicaid 1115 waiver allows the state to spend up to $650 million in state and federal Medicaid funding on “Healthy Opportunities Pilots,” designed to cover select services related to housing, food, transportation, and interpersonal violence that directly impact enrollees’ health outcomes, according to Managed Healthcare Executive. The state’s Medicaid managed care plans, known as Prepaid Health Plans (PHPs) have been set up in four regions of North Carolina to address these social determinants of health. Typically, Medicaid funds are not used to pay directly for non-medical interventions targeting social determinants of health, so this pilot will offer insights to how addressing social determinants of health may impact costs and health outcomes.
Prisma Health Greenville Memorial Hospital will be the first hospital in South Carolina to offer home recovery care, designed to keep patients out of the hospital by bringing key elements of inpatient care directly to their homes, according to GSA Business Report. Home recovery care is often beneficial for individuals suffering from non-life threatening, acute medical conditions, and may lower stress and reduce recovery time. So far, eligible patients using the model at other health systems have accepted the option at a 90 percent rate – the care model has resulted in a 44 percent reduction in readmission rates when compared to hospital care delivered in a traditional acute setting.
In an effort to make healthcare more affordable, Blue Cross Blue Shield and Sanitas Medical Center will offer a full-service clinic to provide primary care, urgent care, lab and diagnostic imaging services, care coordination and wellness and disease management programs in one location, according to Chron. They hope the primary-care driven, value-based model will reduce costs by providing affordable access to preventable care, thereby preventing the need for more serious treatment down the line. The key, the organizations believe, is working together to improve healthcare as a whole.
Thousands of former patients at Deaconess and Valley hospitals will have medical debts erased as part of a major legal settlement with Community Health Systems (CHS), a struggling for-profit hospital chain, according to The Spokesman-Review. The settlement comes more than two years after the Empire Health Foundation sued CHS, alleging the company failed to provide the levels of charity care that it had promised when buying the hospitals from Empire Health Services in 2008. CHS also agreed to pay the foundation $20 million to create a political lobbying arm, the Empire Health Community Advocacy Fund.
A rural safety net hospital and the only hospital serving Clark County, Wisconsin, managed to remain open by contacting city hall for help getting a loan, according to AP News, but other hospitals in other rural states are not as lucky. While 155 rural hospitals have closed in the past 15 years. However, as of 2017, 16 of Wisconsin’s 76 rural hospitals are operating on a financial deficit as their unpaid medical bills climb. Advocates and hospital administrators worry that Wisconsin may end up mirroring other states that have seen numerous rural hospital closures.
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Accountable care organizations (ACOs) generated $739.4 million in net savings in 2018, according to the Centers for Medicare & Medicaid Services (CMS), reports FierceHealthcare. The data released are based on savings spread across 548 ACOs. It shows greater savings among "downside risk" ACOs that were responsible for paying back the federal government for any cost increases compared to ACOs that did not take on such risk. Overall, ACOs that took on downside risk for not meeting savings targets showed an average reduction in spending of $96 per beneficiary, compared to $68 for ACOs that didn’t take on such risk.
The cost of waste in the U.S. healthcare system ranges from $760 billion to $935 billion annually, or about one-quarter of healthcare spending, according to a JAMA review. Previous studies found that approximately 30 percent of healthcare spending may be considered waste. For this new analysis, researchers focused on six waste domains: failure of care delivery; failure of care coordination; overtreatment or low-value care; pricing failure; fraud and abuse; and administrative complexity. While older studies showed that spending on low-value care (unnecessary services and inefficient care delivery) was responsible for the largest percentage of this waste, the new study found that pricing failure and administrative complexity were the largest contributors. The report also estimated potential annual savings from measures shown to cut waste, states Modern Healthcare. In aggregate, those interventions could save $191 billion to $282 billion annually, or about 25 percent of the total spent on waste.
For seven top-selling drugs, prices went up in 2017 and 2018 despite limited evidence demonstrating greater benefit, reports Healthcare Dive. Taken together, the price hikes added more than $5 billion to U.S. spending on those drugs over the two-year period, a study published by the Institute for Clinical and Economic Review (ICER) said. For seven of the nine therapies analyzed in ICER's report, the group judged the evidence it reviewed to be insufficient to support a claim of additional benefit. Even so, prices on those seven drugs rose by an average of 17 percent on a list basis, and 20 percent on a net basis after accounting for rebates and discounts. Humira, the drug that topped the list, saw an average price increase of 15.9 percent over this period and cost American consumers $1.86 billion more than what would have been spent without the price increase.
Of 35 drug pricing transparency laws passed in states, only 7 were deemed informative about transaction prices and no state passed legislation that provided effective transparency across the entire supply chain, according to a study from JAMA. Researchers found that only Oregon and Nevada passed laws that required manufacturers to report profits. Connecticut, Louisiana and Nevada require that PBMs report rebates in aggregate but not at the individual-drug level.
Providing selected free medications increased adherence among patients and led to improvements in both their health outcomes and their perceptions of the quality of their care, according to a new JAMA study. Researchers found that 38 percent of patients who received free medications took them regularly, compared with 26 percent of patients who had cost-sharing for their drugs. Additionally, patients in the free medication group had larger decreases in systolic blood pressure compared to the control group. Though this study was conducted in Canada, it could inform the current debate around cost-sharing design in the United States, a Modern Healthcare analysis states. Poor medication adherence is estimated to cost the U.S. healthcare system $100 billion to $289 billion annually and causes approximately 10 percent of all hospitalizations and 125,000 deaths. The study found no increase in potentially inappropriate prescribing or substantial difference in serious adverse events. Participants receiving free medicine were also more likely to report being able to make ends meet.
Reference pricing could help lower drug prices, but is not a cure-all on its own, according to a new report from the Bipartisan Policy Center (BPC). The report delineated two types of reference pricing: external pricing, which uses international prices as a benchmark to set or negotiate the price of drugs; and internal reference pricing, which could be used in various scenarios to ensure that therapeutically equivalent drugs are priced similarly, and encourages the use of the least costly alternative therapy. Experts stated that existing evidence demonstrates that external reference pricing can lead to lower prices in the short-term, but this effect may diminish over time. The report recommends that HHS form an advisory group to compare new drugs and biologics to either existing therapeutically equivalent drugs or the standard of care as a way to help with internal reference pricing, MedPage Today reports.
While the Delivery System Reform Incentive Payment (DSRIP) program in New Jersey fulfilled its primary objective of conditioning receipt of Medicaid supplementary payments on quality and reporting of care by hospitals, program implementation wasn’t sensitive to specific constraints, priorities and resource needs of safety net hospitals (SNHs), according to the Journal of Health Politics, Policy and Law. In fact, through hospital surveys and stakeholder interviews, researchers found that several policies related to outpatient partnerships, reporting of quality metrics and monitoring of low-income populations were perceived to have placed disproportionate burdens on SNHs. This research reveals a need to be responsive to the problems SNHs face and to limit their short-term transaction costs and maintain their financial viability.
Current electronic health record (EHR) systems are not designed with the goal of efficient ordering of high-value clinical services and thus do not facilitate the ordering of high-value clinical services, according to a study in the American Journal of Managed Care. The lack of correlation between the ease of ordering a particular clinical service and the strength of evidence guiding the rationale for its use is in stark contrast to the promise of enhanced provider efficiency that EHRs offered before their adoption. However, this study also shows the potential for EHRs to make it easier to order evidence-based care and more difficult to access low-value care. The authors also note that recent studies reveal the frustrations and increased clerical burdens that clinicians experience as a result of ineffective current HER systems, indicating that simplifying the ordering process for high-value care would decrease burnout and incentivize higher-value care usage by other clinicians.
Researchers at Georgetown, in partnership with the Urban Institute, studied what motivates states to switch from federally facilitated marketplace to state-run platforms, a CHIRblog reports. They found that the primary factors driving states to switch from the HealthCare.gov platform to a full state-based marketplace are the prospect of cost savings (and the ability to redirect those savings to other state priorities), an improved consumer experience, and regaining more autonomy over their insurance markets in the wake of federal actions to undermine the ACA. IT system failures or glitches, gaps in coverage or financial assistance for enrollees, and inconsistent federal policymaking were the main risks associated with transition.
A public option could catalyze competition in less competitive markets, leading other marketplace insurers to lower their premiums, an analysis from the Urban Institute finds. Researchers found that rating regions with more participating insurers have lower benchmark (second-lowest silver) premiums in 2019. Moreover, having at least one Medicaid insurer as a competitor is associated with a $38 lower premium per month for a 40-year-old. Based on these findings, authors stipulate that introducing a public option into a rating region without significant competition (those that do not have Medicaid insurers participating in the marketplace) could lead to larger premium savings than those generated by the public option alone.
A study published in JAMA Cardiology found the annual hospital percutaneous coronary intervention (PCI)-related mortality may not be a reliable factor help patients select high-quality hospitals, reports AboutHealthTransparency.org. The study found at hospitals with high or low PCI-related mortality rates, the rates largely regressed to the mean the following year. In other words, a hospital’s risk-adjusted mortality rate was poorly associated with its future mortality.
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Lurking Affordability Boards - The States' New Fix for Drug Pricing
By Ata Sklar and Christopher Robertson | NEJM | Oct. 2, 2019
In an effort to control drug prices, some states are creating prescription drug affordability boards, which help states regulate prices by requiring drug manufacturers to justify high prices or price spikes for both patented and generic drugs, according to the New England Journal of Medicine. If the board rejects a manufacturer’s explanation for a pricing decision, it can, with the approval of the state legislature, set a lower price for the drug. A Maryland law is serving as the model for other states, eight of which have introduced affordability board legislation. These bills call for a cost review only when prices or price increases for certain drugs exceed specified thresholds. Pending state bills generally grant affordability boards broad authority to establish new reimbursement levels for reviewed drugs after determining that a given price or price increase is justifiable using information provided by the manufacture, unlike the Maryland law. The challenge will be achieving the scale necessary to impact an industry that manufactures more than 4 billion prescriptions each year in the U.S.
In the broad space that encompasses social determinants, social needs, social risk factors, and population health (and related concepts), there are many important concepts worthy of precise terminology, according to Drivers of Health. Reports have often conflated the terms “social needs” and “social determinants of health (SDoH).” The authors of a recent Health Affairs blog assert that while one relates to meeting a patient’s individual needs, the latter refers to addressing the underlying social and economic conditions in communities to foster improved health for all. Focusing on social needs and believing that addressing them at an individual level will also address society-wide SDoH reflects a large misunderstanding.
Though 58 percent of employers use high-deductible health plans, the percentage of companies that offer these plans as a sole option are declining, according to Kaiser Health News. In many situations, employees chose PPO plans with lower deductibles and higher premiums because costs were more predictable. For example, when Digital River, a Minnesota based e-commerce business, introduced the low-deductible/higher premium PPO plans this year, about 10 percent of employees moved from the high-deductible plans to the traditional plans. Leadership believes this gave them an advantage in attracting top talent because competitors only offered high-deductible plans.
Visit the Hub website for more on prescription drug costs, social determinants of health, high-deductible health plans and more!