Supreme Court Upholds Arkansas Law Regulating Pharmacy Benefit Managers
By Paige Minemyer | Fierce Healthcare | Dec. 10, 2020
The U.S. Supreme Court upheld Arkansas’ law regulating pharmacy benefit managers (PBMs), ruling that it is not preempted by ERISA, reports Fierce Healthcare. Arkansas’ law prohibits PBMs from reimbursing pharmacies at lower rates than the cost required to dispense prescriptions and allows pharmacies to refuse to sell a drug if the upper limit that plans will pay for it is too low. Opponents of the law argue that it increases costs for patients and could potentially result in pharmacies not carrying needed medications; proponents argue that the law protects rural and independent pharmacies from too-low reimbursement rates. The ruling paves the way for other states to pass laws regulating PBMs and explore other cost-regulating measures.
A U.S. District Court judge in the Eastern District of California upheld the state’s drug price transparency law, challenged by the Pharmaceutical Researchers and Manufacturers of America (PhRMA), reports NASHP. The law requires manufacturers to report and provide information about certain drug price increases and give 60-day advance notice of drug price increases if the list price is more than $40 and if the price increased more than 16 percent over the past two years. The ruling is a legal victory for states working to curb drug prices following the Supreme Court’s December 2020 decision to uphold an Arkansas law regulating pharmacy benefit managers.
Larimer County, Colorado, partnered with Healthcare Bluebook to find ways to guide their health plan members to high-value providers, resulting in significant savings for both patients and the county, reports American City and County. Through this partnership, Larimer County employees use an online tool compiled by Healthcare Bluebook that shows provider scores on both quality and costs based on healthcare providers’ health outcomes. Consumers receive a portion of the overall savings from the program—in its first year, the program produced a return on investment of over 340 percent. In the coming year, the county will launch a new pilot program with Healthcare Bluebook to eliminate member cost sharing for certain procedures when members choose a high-value provider.
Colorado’s health insurance marketplace has launched a Public Benefit Corporation (PBC), which will offer healthcare ancillary products and services across the state and aims to increase consumer health literacy, according to Connect for Health Colorado. The PBC will also administer the plans and financial assistance, which will fund the state’s reinsurance program, provide financial help to people with low incomes whose net premium would increase as the individual market price for insurance decreases and set up a fund to provide financial help to people who don’t otherwise qualify under the ACA. The financial help will be in the form of a separate state-funded subsidy, available to people beginning in 2023.
A new report from the Colorado Department of Health Care Policy & Financing found that specialty drugs represented less than two percent of drugs prescribed to patients in Colorado but accounted for almost 50 percent of total prescription drug expenditures, reports State Network. Additionally, the report on reducing prescription drug costs found that rebates paid to middlemen such as PBMs and insurance carriers are often retained as profits. Proposed solutions include creating an affordability board to study prescription drug prices, passing along rebates and savings to employers and consumers and increasing transparency in prices, profits and rebates.
D.C. Health announced changes to its COVID-19 vaccination distribution plan to ensure equitable distribution throughout the district, reports WJLA. Additional vaccination appointments will be made available to residents in wards that have a high proportion of BIPOC members and have been disproportionately impacted by the coronavirus. The plan to ensure equitable distribution comes after data from D.C. Health revealed that very few residents in wards that have had the most deaths from COVID-19 have been able to get a vaccine appointment, while residents in areas with the least deaths have been able to obtain the most appointments.
The Illinois Department of Healthcare and Family Services has proposed a new equity-centric plan to transform healthcare in the state, reports the Center Square. The plan recognizes social and structural determinants of health, as well as medical ones, and proposes ways to address them. The new plan, if implemented, will fund pilot projects and planning grants to address both healthcare and social determinants of health, emphasize collaboration between community-based organizations and one unrelated healthcare provider, and ensure that health equity is both measurable and the primary focus of each project. Pilots would fall into three collaboration categories: cross-provider partnerships, safety net hospital partnerships and critical access or distressed hospital partnerships.
Kansas has passed a number of policies to increase telehealth utilization as a result of the COVID-19 pandemic, according to a report by the Kansas Health Institute. Researchers identified several actions that state policymakers have taken, including: requiring payment parity for telehealth services; expanding services allowed under telehealth; allowing services to be provided via telephone, in addition to live video; and expanding allowed “originating” sites to include patients’ homes in addition to nursing facilities. Additionally, the Governor enacted multiple executive orders with provisions pertaining to telehealth, including licensure. Some of these provisions were later codified, allowing out-of-state physicians to treat Kansas patients via telehealth without securing a Kansas license, provided certain requirements are met. In the months and years ahead, Kansas policymakers must decide which changes should continue and whether additional changes are needed to encourage the appropriate use of telehealth.
Recently released 2019 data from the biennial Louisiana Health Insurance Survey (LHIS) found that the state uninsured rate for nonelderly adults age 19-64 (11.1%) measured lower than the national average, as did the state uninsured rate for children (3.8%). Moreover, 32 percent of respondents felt their costs were unreasonable a majority of the time. Other topics measured by the survey include whether respondents felt their healthcare needs were being met, healthcare provider availability and the reasonability of healthcare costs in the state.
Maryland’s global budget payment model reduced expenditures by more than $20 per month per beneficiary compared to a control group, according to a study Health Affairs. Maryland’s global budget payment model, originally piloted with eight rural hospitals, had no significant differences in service use or spending by Medicare beneficiaries. However, when the state expanded the model to all hospitals, Medicare expenditures decreased by more than $25 per month per beneficiary more than the control group during the first three years of the program, saving Medicare approximately $679 million. Maryland’s global budget payment model can serve as a model for other states considering value-based purchasing models.
Massachusetts’ top insurance lobbying group will launch a research study and has started a pledge focused on racial disparities in healthcare, reports the Boston Business Journal. The Massachusetts Association of Health Plans, which includes 17 of the state’s insurance carriers, has created a compact among members for diversity and inclusion in the healthcare workforce. The insurance plans have committed to promoting a diverse culture, supporting workforce diversity through the creation of a pipeline to employment and developing and increasing opportunities for diverse candidates through targeted entry level healthcare jobs. The group will also sponsor a $200,000 research study looking at racial disparities within telehealth use which would seek to further understand how COVID-19 has changed telehealth usage and how insurance, socioeconomic status, race and ethnicity have further shaped use. The study, to be led by researchers from the Department of Population Medicine at the Harvard Pilgrim Health Care Institute and advisors from the state’s Health Policy Commission, will identify communities with equity gaps and develop a plan to address them.
Providing permanent housing with support services to people who have experienced chronic homelessness reduces healthcare costs, reports WBUR news. The results, from a study by Blue Cross Blue Shield of Massachusetts Foundation, show that expenditures by MassHealth (Massachusetts’ Medicaid program) were 11.2 percent lower for people in the first year they were housed than for a control group living in shelters and on the street. People living in permanent supportive housing have case managers from social service agencies who provide additional support. Indeed, MassHealth spent 35 percent more on mental healthcare for people who had experienced chronic homelessness in the first year they were housed, the study found, which suggests that those patients were getting needed help they had previously been missing.
The Massachusetts Governor signed into law a wide-ranging bill that includes expanding access to telehealth after the COVID-19 public health emergency abates, reports Healthcare IT News. The new law mandates that insurers cover virtual behavioral health services at the same rate as in-person services, rate parity for primary care and chronic disease-management services for two years and rate parity across the board for 90 days past the end of the state of emergency. In addition, the law makes permanent measures to expand scope of practice for a wide range of providers, requires providers to notify patients in advance about whether a procedure is out of network and mandates insurance coverage for all COVID-19 related emergency, inpatient and cognitive rehab services.
Between 2014 and 2019 the Minnesota Department of Revenue took $81.6 million in refunds from about 24,000 taxpayers per year to pay medical debt that some of the state’s largest nonprofit hospitals said they were owed, reports the Star Tribune, with some Minnesotans’ refunds seized more than once. Only one other state, South Carolina, takes individual tax refunds on behalf of private healthcare companies. In Minnesota, hospitals and other healthcare firms do not need a court judgement or order before retaining the state to take tax refunds on their behalf, and the Department of Revenue earns a $15 fee for every collection made through this program and does not check to ensure a health provider’s claim is valid before seizing a refund. Hospitals insist that they have begun to take on dangerous amounts of debt from uncompensated care – in 2017, Minnesota hospitals provided $691 million in uncompensated care, with 25 percent of that total considered bad-debt, according to the Minnesota Hospital Association’s 2018 Community Benefit Report.
New York’s Governor ordered state-run hospitals to stop suing patients over unpaid medical bills, and while most major private hospitals in the state voluntarily followed suit, one chain of hospitals has not, reports The New York Times. Northwell Health, the state’s largest health system, has sued more than 2,500 patients in 2020, despite the pandemic. The Northwell lawsuits each sought an average of $1,700 in unpaid bills, plus large interest payments; however, the system has sued for unpaid bills as small as $700. After this article was published, Northwell announced it would stop suing patients during the pandemic and would rescind all legal claims it filed in 2020.
UNC Health, North Carolina’s largest academic health system, has rolled out its new cost transparency tool via an app and on their website, reports North Carolina Health News. The tool makes it possible for consumers with or without insurance to estimate how much an office visit, simple procedure or inpatient service will cost. The tool results from a new rule from the Centers for Medicare and Medicaid Services (CMS), effective Jan. 1, 2021, in which all hospitals are required to provide public lists of standard charges for healthcare services in an easily accessible, easily searchable format. Transparency initiatives such as these, however, have had mixed success in getting patients to use them. For example, in 2007 New Hampshire created a website that provided negotiated out-of-pocket costs and negotiated prices for common procedures, but a 2014 study found that only about one percent of patients actually used the service over the course of three years.
A North Carolina task force established to address inequalities amplified by COVID-19 in communities of color has recommended looking at pressing public health issues such as “sick buildings” that can increase COVID spread, reports Costal Review Online. The problem of “sick buildings” is caused by legacy pollutants, such as radon, asbestos, mildew, and mold, that can arise from delayed maintenance of aging buildings, according to the task force’s first biannual report. The report notes that, “Nowhere is this problem more apparent than in NC’s public schools, especially those in hyper-segregated, concentrated poverty communities,” and that this issue disproportionately impacts communities of color. The report goes on to explain that because of aging and poorly functioning HVAC systems, children in “sick” school buildings are exposed to chemical and biological contaminants that adversely affect their health. The report also notes that these “sick buildings” with poor ventilation can also exacerbate COVID-19 by increasing its spread.
Ohio has passed a new law to protect residents from surprise medical bills, according to The Center Square. The bill creates a baseball-style arbitration process between the provider and the insurance company—one that does not place patients in the middle. The legislation seeks to stop the practice of patients being charged for out-of-network services at the out-of-network rate when they are performed at an in-network facility.
Oregon health officials and lawmakers are seeking the legislature's approval on formal report describing a cost-growth-capping program that would hold insurers and large and medium-sized medical practices to annual per-patient cost growth caps, require formal justification if they exceed the cap, and potentially fine them if they exceed the cap, according to The Lund Report. Oregon would be the fifth state to adopt a cost growth target program. The Sustainable Health Care Cost Growth Target Implementation Committee hopes to address the root causes of healthcare cost growth, however, there is worry that some providers and insurers, anxious to come in under the cap, may try to cut the quality or volume of care.
Oregon has had a longstanding focus on health equity and employed two foundational strategies that can serve as examples for other states seeking to further their health equity efforts, according to State Health & Value Strategies. The state has been very intentional with language used to describe equity efforts, how key terms are defined and has placed an emphasis on engaging community partners to ensure that the community voice is apparent in state-level policy decisions. The state also developed a framework to demonstrate the importance of moving upstream to the understanding that racism, discrimination and bias impact the health outcomes of people who have been subjected to long-standing, even centuries-old oppression. The development of common definitions and adoption of a framework for understanding where work needs to focus has allowed for robust internal and external coordination and impact around how to work towards achieving health equity.
Prenatal care utilization and health outcomes for newborns have improved in Oregon in the three-year period following the state’s Medicaid expansion in 2014, according to two studies from Oregon State University featured in Health Affairs. Medicaid expansion was associated with a 2 percent increase in first trimester prenatal care utilization, a 23 percent reduction in preterm births and a 29 percent reduction in low birthweight among babies born to women covered by Medicaid.
The Department of Health announced that four additional hospitals will join the 13 hospitals and six payers participating in the Pennsylvania Rural Health Model (PARHM), reports the Pennsylvania Pressroom. The PARHM will test a more sustainable financial model for hospitals serving rural areas to help ensure that they stay open, are financially stable and improve population health in rural communities. It is projected to serve more than one million Pennsylvanians living in rural areas and have $725 million in net patient revenue in the global budget model.
The Department of Health released results on social determinants of health, health equity and health factors from the 2020 State Health Assessment, according to SHADAC. The report showed that among adults under 65,10 percent did not see a doctor in the past year due to cost. In addition, Black and Hispanic adults were less likely to have health insurance and more likely to not be able to see a doctor due to cost compared to non-Hispanic white adults.
The Pennsylvania Interagency Health Reform Council (IHRC) released recommendations to reduce costs, decrease disparities and improve healthcare delivery, reports the Pennsylvania Pressroom. The IHRC’s recommendations include creating a health value commission to institute healthcare cost benchmarking, developing regional accountable health councils to address health equity, integrating social services into healthcare delivery, making data dashboards public to drive quality improvement and leveraging state purchasing power. The IHRC will support legislative action related to these recommendations, continue to facilitate inter-agency coordination and track progress on the recommendations.
Rhode Island’s Office of the Health Insurance Commissioner’s affordability standards, created to moderate price growth by incorporating value-based purchasing arrangements in provider contracts are among Rhode Island’s efforts to promote value in healthcare, according to a study in Health Affairs. These efforts resulted in a large increase in commercial insurer spending on primary care services, an increase in the number of primary care providers, lower inpatient and outpatient fee-for-service spending and higher non-fee-for-service spending, primarily on primary care. Additionally, the state created an all-payer patient-centered medical home with payments tied to quality measures. However, quality and use did not change significantly after the implementation of these initiatives. Rhode Island’s laws can serve as a model for other states considering value-based payment models.
Tennessee is set to become the first state to implement a Medicaid block-grant program after the Centers for Medicare and Medicaid Services (CMS) approved the state's waiver last week, according to Healthcare Finance. The block grant, called an “aggregate cap,” will create a fixed spending target based on historical enrollment and Medicaid cost data that increases at a “reasonable growth rate” over time. It will also give the state the option to exclude certain pharmaceutical drugs from the formulary. Numerous advocacy organizations, payers and providers oppose Medicaid block grants because they fear that underserved populations will lose access to healthcare by putting a cap on federal funds.
Racial and ethnic disparities are costing Texas $2.7 billion in excess medical care spending annually, $5 billion in lost productivity annually and $22.6 billion in life years lost, according to a new report from Altarum. In Texas, as is the case with the rest of the country, social determinants of health, including access to healthcare, vary considerably by race and ethnicity. Not surprisingly, there are also large disparities in health status, disease prevalence and premature death by race and ethnicity. In weighing the value of investments to improve health, it is important to understand that disparities in health impose a substantial human cost and a significant economic burden to the Texas economy. The authors assert that economic burden numbers will increase by 22 percent as the Texas population grows larger and more diverse.
The Texas Health and Human Services Commission (HHSC) received federal approval for a 10-year extension through September 2030 for its Texas Healthcare Transformation and Quality Improvement Section 1115 demonstration waiver, according to The Texas Tribune. The federal funding agreement reimburses hospitals for the uncompensated care they provide to patients without health insurance. It also pays for innovative healthcare projects that serve low-income earners in Texas, often for mental health services.
Several of Utah’s healthcare leaders have declared racism a public health crisis and developed a plan to eliminate it, reports The Salt Lake Tribune. Several of Utah’s large healthcare providers have committed to providing educational programs, services and personal protective equipment (PPE) to marginalized communities and creating avenues for hiring people of color in healthcare careers. The leaders noted several health inequities that people of color in Utah experience, especially from COVID-19, and their desire to achieve equitable healthcare for all Utahns.
A blog in Health Affairs highlights five challenges facing Vermont’s all-payer model (APM): incentivizing participation among providers; properly attributing patients to providers; paying for value; determining how financial risk should be distributed among providers; and overcoming the disadvantages of fee-for-service benchmarks. The all-payer model allows accountable care organizations in the state to receive payments from Medicare, Medicaid and commercial insurers and then align payments and quality measures for providers. While the APM offers theoretical advantages such as economies of scale, aligned incentives and potentially reduced administrative costs, without tax increases or public provision of services, operationalizing the model has been difficult.
Virginia will allocate $10 million in CARES Act funding to Unite Virginia, a platform that connects residents to health and social service providers, State of Reform reports. With the goal of achieving health equity in mind, Unite Virginia will allow healthcare providers to refer patients in need to support services within and outside of the medical field. These services include housing, food programs and other social services for Virginians in need.
A majority of Virginians are unaware of the State Corporation Commission's Bureau of Insurance and believe the bureau does not provide consumers with enough information about how to contest health insurance coverage decisions, according to a survey by Mason-Dixon polling. Additionally, 92 percent indicated that they want easy-to-access information about insurance industry profits, medical expenditures, administrative costs and other metrics, reports State of Reform. A recent Altarum analysis found that though healthcare expenditures in Virginia are below the national average, private personal insurance healthcare spending is up 42.7 percent since 2008.
A previous Wisconsin Watch/WPR investigation found that hospitals statewide sued dozens of patients during the early weeks of the pandemic, despite several hospitals pledging to pause or at least slow down aggressive debt collection during the public health crisis, reports Wisconsin Watch. However, one of those hospitals, Froedtert South, filed 314 lawsuits in small claims court against debtors in 2020. The lawsuits collectively sought to recoup about $1.1 million in alleged debt, ranging from $555 to $9,970 per lawsuit – at least eight defendants in 2020 filed for bankruptcy. Other Wisconsin healthcare providers have sued over debt in recent months, court records show, although Froedtert South stands out in volume.
The U.S. Department of Health and Human Services announced that a collaboration of federal agencies will supply $6.5 million in funding over three years to evaluate the broadband capacity of healthcare providers and patients in the hopes of improving access to telehealth services, according to State of Reform. The initiative will focus on four states – Texas, Michigan, West Virginia and Alaska – and is targeted specifically to rural areas. Funding for this effort will support the measurement of bandwidth and the quality of connectivity in target communities, and additional funding will be needed to address the needs identified.
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