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News Items, by Subject

Medicare and Medicaid


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[Guidance Overview] CMS Announces New Model to Lower Drug Prices in Medicare Part D and Transformative Updates to Existing Model for Medicare Advantage
"Under the new model, which takes effect for the 2020 plan year, participating plans will take on greater risk for spending in the catastrophic phase of Part D, creating new incentives for plans, patients, and providers to choose drugs with lower list prices. Based on plan year performance, CMS will calculate a spending target for what governmental spending would have been without plans taking on this additional risk. Participating Part D plans will share in savings if they stay below the target but will be accountable for losses if they exceed the target. For the first time, the model also introduces a Part D rewards and incentives program to align this model with the changes to VBID, and to provide Part D plans with additional tools to control drug costs and help enrollees in choosing drugs with lower list prices." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Guidance Overview] Text of CMS Value-Based Insurance Design Model (VBID) Fact Sheet CY 2020
"For the CY 2020 VBID application period, which is open now through March 1, 2019, eligible Medicare Advantage organizations may apply to test one or more of the following new interventions: [1] Value-Based Insurance Design by Condition, Socioeconomic Status, or both ... [2] Medicare Advantage and Part D Rewards and Incentives Programs ... [3] Telehealth Networks ... [4] Wellness and Health Care Planning." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
HHS Medicare Drug Shift Plan Could Reduce Costs Overall But Raise Them for Some
"At 2018 prices, Part B spending for the 75 brand-name drugs with the highest Part B expenditures was estimated to be $21.6 billion annually. Under the proposed policy, total Part D drug spending for these drugs would fall to an estimate in the range of $17.6 billion and $20.1 billion after rebates, corresponding to a 6.9% to 18.3% decrease in drug spending in Part D compared with Part B costs." (American Journal of Managed Care)
[Opinion] High Prices Drive High Health Care Spending in the U.S., But So Too Do Other Factors
"[T]he prices that US providers negotiate with insurers are aberrantly high and that the level of providers' commercial prices differentially raises health spending in the US compared to other nations. However, it is crucial to note that the regulated prices US providers are paid by the Medicare and Medicaid program are not hugely out of sync with the regulated prices set in other countries." (Health Affairs)
ACOs Should Plan for Shorter Path to Greater Risk in CMS' Overhauled Medicare Shared Savings Program
"In an analysis of Medicare data for 560 [Medicare Shared Savings Program (MSSP)] ACOs to estimate where they would fall in CMS' new two-prong model, two out of three ACOs had the shorter window before they would be expected to take on greater risk." (FierceHealthcare)
CMS Releases 2016 Public Use File for the Medicare Current Beneficiary Survey (MCBS)
"The MCBS 2016 public use file (MCBS PUF) provides a publicly available MCBS file for researchers interested in the health, health care use, access to and satisfaction with care for Medicare beneficiaries, while providing the very highest degree of protection to the Medicare beneficiaries' protected health information.... The MCBS PUF is prepared from data collected in 2016 from 12,852 community dwelling Medicare beneficiaries representing a population of 53 million and contains standard demographic variables, such as age categories, race/ethnicity and gender, as well as information about health conditions, access to and satisfaction with care, type of insurance coverage, and information on utilization, such as the number of fee-for-service claims per beneficiary for certain health care event types." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Guidance Overview] CMS Finalizes Proposed Redesign to Medicare Shared Savings Program
"Low-revenue ACOs are permitted to stay in one-sided risk-sharing models for a longer period ... Any ACO determined to be experienced with Risk Models however, is required to take on risk immediately.... CMS is also cutting the shared savings rate that will be available for ACOs until they enter a Risk Model.... CMS finalized modifications to its calculation of the regional adjustment to an ACO's performance benchmark[.]" (K&L Gates)
[Guidance Overview] 'Pathways to Success' Update: CMS Issues Final Rule on Changes to the ACO Program
"On December 21, 2018, CMS issued the final rule for the redesign of the [Medicare Shared Savings Program (MSSP) which] includes the following: [1] Greater savings for one-sided risk models.... [2] Qualification as a low revenue ACO.... [3] Additional year of one-sided risk for new low revenue ACOs.... [4] High revenue ACO participation in BASIC Track Level E.... [5] Repayment mechanism for two-sided risk.... [6] Benchmarking methodology." (Sheppard Mullin)
2015 Medicare Current Beneficiary Survey Annual Chartbook and Slides
The MCBS 2015 Chart Book is now updated to include two new sections with information on the use and cost of health care services reported by survey beneficiaries. This release will supplement the information in Version 1 of the MCBS 2015 Chart Book which included information on beneficiaries' satisfaction with care, usual source of care, functional status, and health and well-being. (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Guidance Overview] Pathways to Success: An Overhaul of Medicare's ACO Program
"The rule is projected to achieve $2.9 billion in savings over ten years.... One key element of [this final rule] is a reduction in the amount of time that an ACO can remain in the program without taking accountability for healthcare spending.... [The] rule also increases flexibility for certain performance-based risk ACOs to encourage innovation and expand access to high-quality services that are convenient for patients, including telehealth services provided at a patient's place of residence." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Final Regs: Medicare Shared Savings Program; Accountable Care Organizations Pathways to Success and Extreme and Uncontrollable Circumstances Policies for Performance Year 2017
957 pages. "The policies included in this final rule provide a new direction for the Shared Savings Program by establishing pathways to success through redesigning the participation options available under the program to encourage ACOs to transition to two-sided models (in which they may share in savings and are accountable for repaying shared losses). These policies are designed to increase savings for the Trust Funds and mitigate losses, reduce gaming opportunities, and promote regulatory flexibility and free-market principles. This final rule also provides new tools to support coordination of care across settings and strengthen beneficiary engagement; and ensure rigorous benchmarking." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Are Medicare Part D Disclosure Notices Required for an HRA or Health FSA?
"The answer is probably yes for the HRA, and no for the health FSA. This assumes that your company's health FSA and HRA will offer prescription drug coverage to Part D-eligible individuals -- i.e., individuals covered under Medicare Part A or Part B, including active and disabled employees, COBRA participants, retirees, and their covered spouses and dependents who live in the service area of a Part D prescription drug plan." (Thomson Reuters / EBIA)
CMS Office of the Actuary Releases 2017 National Health Expenditures
"Hospital spending (33 percent of total healthcare spending) decelerated in 2017, growing 4.6 percent to $1.1 trillion compared to 5.6 percent growth in 2016.... Physician and clinical services spending (20 percent of total healthcare spending) increased 4.2 percent to $694.3 billion in 2017.... Retail prescription drug spending (10 percent of total healthcare spending) slowed in 2017, increasing 0.4 percent to $333.4 billion.... The 3.9 percent growth in healthcare spending was slightly slower than growth in the overall economy (4.2 percent) in 2017." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses: Highlights from the Proposed Rule
"Plan sponsors should review the proposed regulation and consider submitting comments to CMS (the comment deadline is January 25, 2019).... [T]he proposed rule raises operational questions that will need to be addressed by plan sponsors and PBMs. There will be pricing implications in the bids, and other actuarial considerations such as trend and Part D risk corridor projections.... [T]he provisions are likely to necessitate re-negotiation of contracts between plan sponsors and pharmacy benefit managers." (Wakely Consulting Group)
[Guidance Overview] CMS Releases Medicare Advantage and Part D Drug Pricing Proposed Rule for Contract Year 2020
"The agency has proposed five changes to amend Medicare Advantage and Medicare Prescription Drug Benefit (Part D) regulations to support health and drug plans' negotiation for lower drug prices and to reduce out-of-pocket costs for MA and Part D enrollees.... [1] Providing plan flexibility to manage protected classes ... [2] E-prescribing and the Part D prescription drug program; updating Part D e-prescribing standards ... [3] Medicare Advantage and step therapy for Part B drugs ... [4] Pharmacy price concessions to drug prices at the point of sale ... [5] Part D explanation of benefits." (Epstein Becker Green)
Economic Analysis of 'Medicare for All'
"As of 2017, the U.S. was spending about $3.24 trillion on personal health care -- about 17 percent of total U.S. GDP. Meanwhile, 9 percent of U.S. residents have no insurance and 26 percent are underinsured -- they are unable to access needed care because of prohibitively high costs. Other high-income countries spend an average of about 40 percent less per person and produce better health outcomes. Medicare for All could reduce total health care spending in the U.S. by nearly 10 percent, to $2.93 trillion, while creating stable access to good care for all U.S. residents." (Political Economy Research Institute, University of Massachusetts Amherst [PERI])
When Is Medicare Entitlement a COBRA Qualifying Event?
"If a COBRA triggering event, such as Medicare entitlement, does not cause loss of coverage under your plan, there is no qualifying event, and COBRA need not be offered.... [T]he Medicare Secondary Payer (MSP) rules generally prohibit group health plans from making Medicare entitlement an event that causes a loss of coverage for active employees." (Thomson Reuters / EBIA)
[Guidance Overview] CMS Issues Proposed Rule on Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses
"Key provisions of the Proposed Rule are ... [1] Providing plan flexibility to manage Part D protected classes ... [2] Prohibition on gag clauses in pharmacy contracts ... [3] E-prescribing and the Part D prescription drug program: updating Part D e-prescribing standards ... [4] Part D explanation of benefits ... [5] Medicare advantage and step therapy for Part B drugs ... [6] Pharmacy price concessions in negotiated price." (Sheppard Mullin)
[Guidance Overview] Administration Proposes Strategies to Lower Pharmaceutical Prices in Medicare Part D
"As set out in the proposed rule, the plan has three major new provisions: [1] providing Part D plans with more flexibility to manage protected classes, [2] updating existing e-prescribing systems to make patients' costs visible when a prescription is ordered, and [3] requiring pharmacy price concessions for drugs at the point of sale." (Health Affairs)
[Official Guidance] New CMS Online Tool Displays Cost Differences for Certain Surgical Procedures
"The Procedure Price Lookup tool displays national averages for the amount Medicare pays the hospital or ambulatory surgical center and the national average copayment amount a beneficiary with no Medicare supplemental insurance would pay the provider." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
CMS Takes Action to Lower Prescription Drug Costs by Modernizing Medicare
"The proposal would ensure that Medicare Advantage and Part D plans have more tools to negotiate lower drug prices, and the agency is also considering a policy that would require pharmacy rebates to be passed on to seniors to lower their drug costs at the pharmacy counter.... CMS is also considering for a future plan year, which may be as early as 2020, a policy that would ensure that enrollees pay the lowest cost for the prescription drugs they pick up at a pharmacy, after taking into account back-end payments from pharmacies to plans." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Guidance Overview] Text of CMS Fact Sheet: Contract Year 2020 Medicare Advantage and Part D Drug Pricing Proposed Rule
"CMS is proposing or outlining for consideration by stakeholders a number of provisions that implement these four strategies. [1] Providing plan flexibility to manage protected classes.... [2] E-prescribing and the Part D prescription drug program ... [3] Medicare advantage and step therapy for Part B drugs ... [4] Part D explanation of benefits ... [5] Prohibition against gag clauses in pharmacy contracts ... [6] Pharmacy price concessions in the negotiated price." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Proposed Regs: Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out of Pocket Expenses
185 pages. "This proposed rule would amend the Medicare Advantage (MA) program (Part C) regulations and Prescription Drug Benefit program (Part D) regulations to support health and drug plans' negotiation for lower drug prices and reduce out-of-pocket costs for Part C and D enrollees." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Big Change Ahead for Medicare -- and Employers Will Feel It, Too
"The Trump Administration is considering a proposal that is a major shake-up in the way Medicare reimburses for infused drugs paid under Medicare Part B, which ... could have a major ripple effect on employer plans.... In the Medicare program today, ... [p]hysicians are reimbursed the cost of the drug plus an add-on fee--typically 6% of the drug's cost.... Simply stated, if physicians and/or pharma companies make less money off these products they will look to replace that revenue. And that will very likely result in massive cost shifting to the private sector." (Mercer)
[Guidance Overview] Drug Pricing Plan Would Tie Medicare Part B Reimbursement to International Prices
"[The International Pricing Index (IPI) Model] would: [1] Pay a new IPI Model vendor directly for Part B drugs at a benchmarked international price. [2] Pay physicians and hospitals a per-month or per-dispense administration fee, which ... would not be tied in any direct manner to the cost of the drug administered.... [O]ne of the primary effects of the IPI Model would be to remove health systems and hospitals from billing for certain Part B drugs altogether." (K&L Gates)
[Guidance Overview] CMS Proposes to Modernize Medicare Advantage, Expand Telehealth Access for Patients
"[T]he proposed changes would remove barriers and allow Medicare Advantage plans to offer 'additional telehealth benefits' not otherwise available in Medicare to enrollees, starting in plan year 2020 as part of the government-funded 'basic benefits.' " (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Trump Administration Outlines Plan to Lower Pharmaceutical Prices in Medicare Part B
"The plan contains three key elements: substituting private-sector pharmaceutical vendors for the current Part B 'buy and bill' practice, changing the Part B Average Sales Price plus 6 percent reimbursement system to a flat fee, and implementing international reference pricing. The first two of these were attempted -- and failed -- in previous administrations." (Health Affairs)
[Guidance Overview] CMS Proposes International Pricing Index Model for Medicare Part B Drugs
"CMS is considering issuing a proposed rule in the spring of 2019 on the potential model, called the International Pricing Index (IPI) Model. The potential IPI Model would start in spring 2020 and operate for five years, until the spring of 2025. Over the course of the model, CMS would monitor and evaluate the impact of the model on beneficiary access to drugs, program costs, and the quality of care for beneficiaries.... CMS is seeking feedback on the potential parameters of the IPI Model." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Notice of Proposed Rulemaking: International Pricing Index Model for Medicare Part B Drugs
59 pages. "CMS intends to test whether [1] phasing down the Medicare payment amount for selected Part B drugs to more closely align with international prices; [2] allowing private-sector vendors to negotiate prices for drugs, take title to drugs, and compete for physician and hospital business; and [3] changing the 4.3 percent (post-sequester) drug add-on payment in the model to reflect 6 percent of historical drug costs translated into a set payment amount, would lead to higher quality of care for beneficiaries and reduced expenditures to the Medicare program." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Some Couples Could Need as Much as $400,000 to Cover Medicare Expenses (PDF)
"In 2018, a 65-year-old man needs $75,000 in savings and a 65-year-old woman needs $99,000 for a 50 percent chance of having enough to cover premiums and median prescription drug expenses in retirement.... For a 50 percent chance of having enough to cover health care expenses in retirement, a couple with median prescription drug expenses needs $174,000 in savings. For a 90 percent chance of having enough, the couple need s $296,000 in savings. At the extreme -- a couple with drug expenses at the 90th percentile throughout retirement who want a 90 percent chance of having enough money for health care expenses in retirement by age 65 -- targeted savings are $399,000 in 2018." (Employee Benefit Research Institute [EBRI])
[Opinion] Consumer-Facing Medicare Plan Tools Are Inaccessible and Inaccurate
"Few would probably describe shopping for health insurance as 'fun,' but research shows Medicare Plan Finder (MPF), the federal government's website for finding information about plan options, makes this process particularly unbearable.... One of MPF's biggest problems? Information about out-of-pocket costs is difficult to find and understand. On top of that, this information doesn't account for an individual's health conditions, physician visits per year, and other factors that impact costs." (FierceHealthcare)
[Guidance Overview] HHS Fact Sheet: What You Need to Know about Putting Drug Prices in TV Ads
"The 10 most commonly advertised drugs have list prices ranging from $535 to $11,000 per month or usual course of therapy.... 47 percent of Americans have high-deductible health plans, under which they often pay the list price of a drug until their insurance kicks in.... List prices are also what patients pay if a drug is not on their insurance formulary, and list prices help determine insurance plans' placement of drugs on their formulary." (U.S. Department of Health and Human Services [HHS])
[Guidance Overview] CMS Proposes Requirement that Manufacturers Disclose Drug Prices in Television Ads
"[T]he posting would take the form of a legible textual statement at the end of the ad. The HHS Secretary would maintain a public list of drugs that were advertised in violation of this rule. CMS would provide an exception to the requirement to post prices for prescription drugs with list prices of less than $35 per month." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Proposed Regs: Medicare and Medicaid Programs -- Drug Pricing Transparency
45 pages. "This proposed rule would ... [amend] the Medicare Parts A, B, C and D programs, as well as the Medicaid program, to require direct-to-consumer (DTC) television advertisements of prescription drugs and biological products for which payment is available through or under Medicare or Medicaid to include the Wholesale Acquisition Cost (WAC, or 'list price') of that drug or biological product.... [CMS seeks] comment on [1] [W]hether Wholesale Acquisition Cost is the amount that best reflects the 'list price' for the stated purposes of price transparency and comparison shopping under this proposed regulation.... [2] [W]hether 30-day supply and typical course of treatment are appropriate metrics for a consumer to gauge the cost of the drug.... [3] [H]ow to treat an advertised drug that must be used in combination with another non-advertised drug or device.... [4] [W]hether the cost threshold of $35 to be exempt from compliance with this rule is the appropriate level and metric for such an exemption." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
The Impact of Insurance Expansions on the Already Insured: The ACA and Medicare
"Some states that have not adopted the [ACA] Medicaid expansions have stated concerns that the expansions may impair access to care and utilization for those who are already insured. [The authors] investigate such negative spillovers using a large panel of Medicare beneficiaries.... [R]esults suggest that the expansions in Medicaid did not impair access to care or utilization for the Medicare population." (National Bureau of Economic Research [NBER]; purchase required for full document)
[Official Guidance] CMS Announces 2019 Medicare Parts A & B Premiums and Deductibles
"The standard monthly premium for Medicare Part B enrollees will be $135.50 for 2019, an increase of $1.50 from $134 in 2018. An estimated 2 million Medicare beneficiaries (about 3.5%) will pay less than the full Part B standard monthly premium amount in 2019 due to the statutory hold harmless provision, which limits certain beneficiaries' increase in their Part B premium to be no greater than the increase in their Social Security benefits. The annual deductible for all Medicare Part B beneficiaries is $185 in 2019, an increase of $2 from the annual deductible $183 in 2018." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Doctors Give Medicare's Proposal to Pay for Telemedicine Poor Prognosis
"The Trump administration wants Medicare for the first time to embrace telemedicine across the country by paying doctors $14 for a five-minute 'check-in' phone call with their patients. But many physicians say the proposed reimbursement will cover a service they already do for free. And the Medicare reimbursement -- intended to motivate doctors to communicate with patients outside the office -- could have a chilling effect on patients because they would be required to pay a 20 percent cost-sharing charge." (Kaiser Health News)
Six More Days: October 15 Deadline for Medicare Part D Notice of Creditable Coverage
"With the Medicare open enrollment period beginning next Monday (October [15] comes the annual reminder that the Part D Notice of Creditable Coverage is due to employees by the same date. The purpose of the Notice is to inform employees whether their employer-sponsored group health plan's prescription drug coverage is at least as rich as a Medicare Part D plan." (ABD Insurance & Financial Services)
Medicare Advantage Plans Shift Their Financial Risk To Doctors
"The 'global risk' model is increasingly used by Medicare plans such as Humana and UnitedHealthcare to shift their financial exposure from costly patients, giving doctors' groups more money upfront and control over patient care." (HealthLeaders Media)
Medicare Part D Notice Required Before Oct. 15, 2018
"Employers who sponsor a health plan offering prescription drug benefits must provide an annual notice to all Medicare-eligible participants that explains whether the prescription drug benefits offered under the plan are at least as good as the benefits offered under the Medicare Part D plan. The only employers exempt from this requirement are those that establish their own Part D plan or contract with a Part D plan." (Warner Norcross & Judd LLP)
Remarks by CMS Administrator about Burden Reduction Proposed Rule
"By 2026 one in every five dollars spent in our economy will be on healthcare.... The answer is not to ration care, or limit access. But to continue to innovate, reduce inefficiency and to drive to a system that delivers value, one that delivers high quality care and better outcomes for patients at the lowest possible cost." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Guidance Overview] CMS Proposes to Lift Unnecessary Medicare Regulations and Ease Burden on Healthcare Providers
"Today, [CMS] announced a proposed rule to relieve burden on healthcare providers by removing unnecessary, obsolete or excessively burdensome Medicare compliance requirements for healthcare facilities. Collectively, these updates would save healthcare providers an estimated $1.12 billion annually." [Also online: a CMS Fact Sheet outlining the proposed regulations.] (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Opinion] Medicare Shared Savings Program Produces Substantial Savings, New Policies Should Promote ACO Growth
"One of the assumptions of the administration's proposal to accelerate risk is that the [Medicare Shared Savings Program (MSSP)] has not saved money for Medicare, while other [CMS] initiatives that require downside financial risk have generated savings.... According to CMS, MSSP ACOs saved $1.1 billion in 2017, with net savings of $314 million after accounting for shared savings payments earned by ACOs. The ACOs that joined the program in 2012 through 2014 accounted for the majority of savings. This illustrates that ACO performance improves over time and that ACOs need time before clinical restructuring can generate program savings." (Robert Mechanic and Clifton Gaus, in Health Affairs)
Judge Vacates Medicare Advantage 2014 Overpayment Final Rule
"[Insurers] had argued that the 2014 statute requires 'actuarial equivalence' between [CMS] payments for care delivered under traditional Medicare and Medicare Advantage. Instead, the health insurers successfully argued, the 2014 final rule imposed a stricter standard on MA carriers than on CMS itself when paying Medicare benefits." [UnitedHealthcare Ins. Co. v. Azar, No. 16-157 (D.D.C. Sept. 7, 2018)] (HealthLeaders Media)
CMS Greenlights Indication-Based Formulary Design
"A number of important questions remain. First and foremost, what data would Part D plans use as the basis for indication-based formulary decisions? Product manufacturers are likely to be concerned about the use of data from ... entities that seek to evaluate the monetary value of therapies.... Indication-based formularies would also necessitate a change, at least in part, to existing rebate arrangements between PBMs and manufacturers if a drug will be covered differently depending upon the condition being treated." (Faegre Baker Daniels)
Deadline for Medicare Part D Creditable/Non-Creditable Coverage Notices Nears
"Plan sponsors that offer prescription drug coverage must provide notices of creditable or non-creditable coverage to Medicare-eligible individuals before each year's Medicare Part D annual enrollment period -- this year, by October 14. The notice obligation is not limited to retirees and their dependents but also includes Medicare-eligible active employees and their dependents and Medicare-eligible COBRA participants and their dependents." (Buck)
[Guidance Overview] Text of CMS Fact Sheet: Indication-Based Formulary Design Available to Medicare Plan D Sponsors for Contract Year 2020
"This new guidance expands upon our existing policy by allowing Medicare Part D plan sponsors to tailor which drugs are on their formulary by specific indications, starting in CY 2020. This will provide Medicare Part D plan sponsors additional negotiating leverage with manufacturers, which can reduce beneficiary and program costs." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Memo: Indication-Based Formulary Design Available to Medicare Plan D Sponsors for Contract Year 2020 (PDF)
Unnumbered document dated Aug. 29, 2018. "[This] guidance ... describes how Part D sponsors can ... include indication-based formulary design beginning in CY 2020.... [P]roviding Part D plans with the flexibility to employ the latest formulary tools would enable them to better negotiate for prescription drugs, especially high-cost drugs. The ability to exclude drugs from their formulary for specific indications will provide additional negotiating leverage with manufacturers, which can ultimately reduce beneficiary and program costs.... If a Part D sponsor intends to limit formulary inclusion of a Part D drug to only certain FDA-approved indications, the indication information must be submitted to HPMS." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
ACOs Taking Risk in 'Next Generation' Payment Model Generate Savings for Patients and Taxpayers
"[CMS] released an evaluation report for the first performance year of the Innovation Center's Next Generation Accountable Care Organization (ACO) Model ... Results demonstrated the positive outcomes in terms of quality and costs when providers are responsible for managing to a budget. For the 2016 performance year, the Next Generation ACO Model generated net savings to Medicare of approximately $62 million while maintaining quality of care for beneficiaries." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Typical Premiums and Out of Pocket Costs Before and After Becoming Covered by Medicare (PDF)
"[Results show] a significant decrease in average premiums when people age into Medicare plans at age 65. The average monthly premium for ACA coverage among individuals age 63 and 64 is $857 compared to $148 for Medicare Advantage, $161 for Original Medicare plus Part D, and $302 for Original Medicare plus Part D and Medicare Supplement." (eHealth)
Interaction of COBRA and Medicare: Just How Do Those Rules Work Again?
"COBRA can be affected by entitlement to Medicare and the interactions can be confusing -- that starts with the terminology around Medicare 'entitlement.' The question arises most often around an individual's 65th birthday. There is an expectation that COBRA can end automatically at age 65, but that is not necessarily the case." (Lockton)
Ohio Cracks Down on PBM Contracts After Auditors Find $225 Million Spread Pricing in Medicaid
"Spread pricing models allow PBMs to generate revenue for themselves by charging Medicaid (and thus, taxpayers) more than the amount they reimburse pharmacies.... [Ohio] Auditor of State Dave Yost released findings that PBMs charged Medicaid not only a nearly 9% spread across all drugs but also a 31% spread among generic drug prescriptions filled between April 1, 2017 and March 31, 2018.... PBMs collected more than $2.5 billion from plans during that period, including $662.7 million from generic drugs and almost $1.25 billion from brand-name drugs. Of the $2.5 billion, nearly $225 million was generated through spread pricing, including $208 million from prescriptions for generics." (FierceHealthcare)
Ohio Tells Medicaid PBMs That 2019 Will Be a Time for Transparent Contracts
"Less than 2 months after receiving a report showing that pharmacy benefit managers (PBMs) in Ohio billed taxpayers 8.8% more for medications used by those in the state's Medicaid program, the state this week said it is ending its contracts with all of its PBMs and starting over in transparent contracts." (American Journal of Managed Care)
Retiree Health Benefits Education: What Boomers Want and Need
"If you offer an HSA, it's important that Baby Boomers understand how a health savings account works with Medicare.... For those just a few years out from retirement, your education plan may include helping them understand eligibility requirements for both Social Security and Medicare, as well as any penalties that might arise from applying late to Medicare.... If you have a health & wellness program in place, take measures to boost participation and steer employees, especially older participants, toward healthy habits to help them live well and be productive." (Corporate Synergies)
[Guidance Overview] CMS Proposes 'Pathways to Success,' an Overhaul of Medicare's ACO Program
"CMS proposes to require that beneficiaries receive a notification at their first primary care visit of a performance year informing them that they are in an ACO and explaining what that means for their care.... CMS proposes to allow certain ACOs under performance-based risk to provide incentive payments to patients for taking steps to achieve good health.... Pathways to Success includes proposed changes ... such as allowing physicians in ACOs that take on risk to receive payment for telehealth services provided to patients regardless of the patient's location -- including at their place of residence.... Pathways to Success proposes incorporating regional spending into ACO targets earlier, starting during an ACO's first agreement period. In addition, the proposal would authorize termination of ACOs with multiple years of poor financial performance." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Medicare to Overhaul ACOs But Critics Fear Less Participation
"ACOs were expected to save the government nearly $5 billion by 2019, according to the Congressional Budget Office. It hasn't come anywhere close.... [The administration has] proposed an overhaul to the program, which was designed to encourage doctors and hospitals to work together to coordinate care by reducing unnecessary tests, procedures and hospitalizations. The move could dramatically scale back the number of participating health providers." (Kaiser Health News)
[Guidance Overview] CMS Takes Action to Lower Drug Prices Paid by Medicare Advantage Plans
"In a memo sent to Medicare Advantage plans, CMS is giving them the option -- starting January 1, 2019 -- of ensuring that patients receive the most preferred drug therapy first and progress to other therapies only if necessary, as part of broader part of care coordination activities.... CMS is allowing Medicare Advantage plans to take advantage of step therapy for Part B drugs, which constitute around $12 billion per year in spending by plans." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
HSA Contribution Rules: Counter-Intuitive Coordination with Medicare
"Medicare enrollment of an employee has several consequences -- including some retroactive consequences -- for the employee's right to make contributions to a health savings account (HSA). But many employees are unaware that Medicare coverage of the employee's spouse does not necessarily have any effect on the employee's right to make HSA contributions, or the amount of those contributions." (Lockton)
Savings Available Under Full Generic Substitution of Multiple Source Brand Drugs in Medicare Part D (PDF)
"The Medicare program, through its Part D plans, spent almost $9 billion on brand name drugs when therapeutically equivalent generics were available. If these prescriptions were instead dispensed as generics, the Part D program and its beneficiaries would have saved almost $3 billion." (Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])
ERISA and Medicare Part D Preempt Arkansas Law Regulating Pharmacy Benefits Managers
"The Eighth Circuit has ruled that both ERISA and Medicare Part D preempted an Arkansas law that sought to govern the conduct of pharmacy benefits managers by mandating that pharmacies be reimbursed for generic drugs at a price equal to or higher than the pharmacies' cost for the drug." [Pharmaceutical Care Mgmt. Association v. Rutledge, No. 17-1609 and 17-1629 (8th Cir. June 8, 2018)] (Wolters Kluwer Law & Business)
 
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