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News Items, by Subject

Medicare and Medicaid

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A Brief Look at the Medicare Secondary Payer Rules
"[The Medicare Secondary Payer Rules] prevent employers (whose plans would pay before Medicare) from coercing, inducing, or incentivizing employees, their spouses, or dependents to elect Medicare over employer-sponsored coverage.... The Rules apply to active employees and their spouses regardless of how they become eligible for Medicare (age or disability).... These Rules generally apply to employers who have 20 or more employees (full-time and part-time) worldwide." (HUB International)
[Guidance Overview] Health Care-Related Expiring Provisions of the 116th Congress, First Session
44 pages. "This report describes selected health care-related provisions that are scheduled to expire during the first session of the116th Congress (i.e., during calendar year 2019).... This report generally focuses on two types of health care-related provisions ... The first type of provision provides or controls mandatory spending, meaning that it provides temporary funding, temporary increases or decreases in funding ... or temporary special protections that may result in changes in funding levels ... The second type of provision defines the authority of government agencies or other entities to act, usually by authorizing a policy, project, or activity. Such provisions also may temporarily delay the implementation of a regulation, requirement, or deadline, or establish a moratorium on a particular activity." [Report R45781, June 21, 2019] (Congressional Research Service [CRS])
[Guidance Overview] CMS Releases 2020 Medicare Part D Benefit Parameters
"Increases in the standard benefit parameters range from approximately 4.8% to 5.9%, with the OOP threshold increasing by 24.5%. Plan sponsors that want to remain qualified for the employer retiree drug subsidy will have to determine if their 2020 prescription drug coverage is at least actuarially equivalent to the standard Medicare Part D coverage." (Buck)
Underreporting of Self-Employed Income Affects Social Security and Medicare
"[M]ore than 3 million self-employed people -- construction contractors, small business owners, and other independent contractors -- did not disclose some or all of their earnings to the IRS in 2014. This under-reporting translated to unpaid self-employment taxes of $3.9 billion to Social Security and another $900 million to Medicare. An additional 2.3 million Americans sell goods and services on platforms like Airbnb, Lyft, and Etsy every month.... Their under-reporting resulted in an estimated non-payment of $2 billion to Social Security and $500 million to Medicare in 2014." (Squared Away Blog, by the Center for Retirement Research at Boston College)
Social Security Error Jeopardizes Medicare Coverage for 250,000 Seniors
"Because of what the Social Security Administration calls 'a processing error' that occurred in January, it did not deduct premiums from some seniors' Social Security checks and it didn't pay the insurance plans ... The problem applies to private drug policies and Medicare Advantage plans that provide both medical and drug coverage and substitute for traditional government-run Medicare. Some people will discover they must find the money to pay the plans. Others could get cancellation notices. Medicare officials say approximately 250,000 people are affected." (Kaiser Health News)
Earnings and Employment Data for Workers Covered Under Social Security and Medicare, by State and County, 2016
"The data show, by sex and age, the number of wage and salary workers and self-employed persons, the amount of their taxable earnings, and the amount they paid in Social Security and Medicare contributions." (U.S. Social Security Administration [SSA])
[Official Guidance] Text of CMS Q&As for Part D Sponsors: Additional Guidance Regarding Part D Bids (PDF)
Unnumbered memorandum dated May 20, 2019. "On April 5, 2019 [CMS] announced that if there is a change in the [Anti-Kickback Statute] rules effective in 2020, CMS will conduct a voluntary two-year demonstration that would test an efficient transition for beneficiaries and plans to such a change in the Part D program.... If CMS proceeds with the demonstration after publication of a final AKS rule, CMS will provide instructions on when and how a Part D plan sponsor will notify CMS that they wish to participate in the demonstration. The decision to participate will need to be made at the plan benefit package (PBP) level." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2019 to 2029
12 presentation slides. "In an average month for each year during that period, between 240 million and 242 million such people are projected to have health insurance, mostly from employment-based plans.... Net federal subsidies for insured people will total $737 billion in 2019 ... That annual sum is projected to reach $1.3 trillion in 2029.... Medicaid and the Children's Health Insurance Program account for between 40 percent and 45 percent of the federal subsidies, as do subsidies in the form of tax benefits for work-related insurance." (Congressional Budget Office [CBO])
A Medicare Primer (PDF)
40 pages. "This report provides a general overview of the Medicare program including descriptions of the program's history, eligibility criteria, covered services, provider payment systems, and program administration and financing. A list of commonly used acronyms, as well as information on beneficiary cost sharing, may be found in the appendices." [Report no. R40425, updated May 20, 2019] (Congressional Research Service [CRS])
Private Insurance Payments to California Hospitals Average More Than Double Medicare Payments (PDF)
"For the 10 percent of California hospitals with the highest ratio of private to Medicare payments, private insurance payments average 364 percent of Medicare and 255 percent of cost; for the 10 percent with the lowest ratio, the average is 89 percent of Medicare and 89 percent of cost." (WestHealth Policy Center)
Some Dayton, Ohio Hospitals Charge Triple What Medicare Pays
"Miami Valley Hospital ... charged private health plans 295 percent of what Medicare paid for the same outpatient services. Kettering Medical Center ... charged private insurers 287 percent of what Medicare paid for outpatient services." (Dayton Daily News)
How Does Prescription Drug Spending and Use Compare Across Large Employer Plans, Medicare Part D, and Medicaid?
"Private health insurance, Medicare, and Medicaid accounted for 82% of total retail prescription drug spending in the U.S. in 2017, while patients paid 14% of the total as out-of-pocket payments. For spending on specific drug products, the top five drug products with the highest total spending alone account for at least 10% of total prescription drug spending in large employer plans, Medicare Part D, and Medicaid.... Out-of-pocket drug spending per user among people in large employer plans and Medicare Part D is highest for drugs to treat cancer, multiple sclerosis and rheumatoid arthritis." (Henry J. Kaiser Family Foundation)
CBO Reply to Sen. Grassley: Negotiation Over Drug Prices in Medicare
May 17, 2019. "Senator Chuck Grassley asked for updated answers to two questions that CBO addressed in a letter to Senator Ron Wyden in 2007. Those questions relate to the Medicare Part D prescription drug benefit and options for allowing [HHS] to negotiate over the prices paid for drugs under that benefit.... The questions and the key conclusions from CBO's response in 2007 are [included in this letter]. CBO continues to stand by those conclusions." (Congressional Budget Office [CBO])
Savings Medicare Beneficiaries Need for Health Expenses in 2019: Some Couples Could Need as Much as $363,000
"For a 50 percent chance of having enough to cover health care expenses in retirement, a couple with median prescription drug expenses needs $183,000 in savings. For a 90 percent chance of having enough, the couple needs $301,000 in savings. At the extreme -- a couple with drug expenses at the 90th percentile throughout retirement who wants a 90 percent chance of having enough money for health care expenses in retirement by age 65 -- targeted savings are $363,000 in 2019. This $363,000 amount is lower than the nearly $400,000 required in 2018[.]" (Employee Benefit Research Institute [EBRI])
[Guidance Overview] CMS Takes Action to Lower Prescription Drug Prices and Increase Transparency
"After an implementation period, Part D plans will be required to ... provide clinicians with access to price information for different prescription drugs.... To further promote transparency, after an implementation period [this] rule will also require the Explanation of Benefits document that Part D enrollees receive each month to include information on drug price increases and lower-cost therapeutic alternatives." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of CMS Final Regs: Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses
201 pages. "This final rule amends 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.... These regulations are effective on January 1, 2020, except for the amendments to Sections 422.629, 422.631, 422.633, 423.128, and 423.160, which are effective January 1, 2021." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
[Guidance Overview] A Closer Look at the Medicare Advantage Telehealth Flex Rule
"Medicare has long been an enigma for the telehealth community. With limited coverage options, arcane and complex rules, and the threat of massive fines and penalties for missteps, telehealth providers have understandably avoided involvement in Medicare.... Although these barriers remain for Original Medicare, the [Bipartisan Budget Act of 2018] removed these obstacles for Medicare Advantage plans starting in Plan Year 2020." (Morgan Lewis)
[Opinion] Why the New HHS Drug Rebate Rule Deserves (Cautious) Support
"There are three basic problems with the current Part D financing system. First, because rebate contracts are proprietary, the Part D market lacks sufficient price transparency to incentivize efficient consumer shopping. Second, rebates can create perverse incentives for Part D plans to purchase drugs with high list prices and large rebates even when lower cost alternatives are readily available. Lastly, rebates systematically disadvantage Medicare enrollees who use expensive brand-name medications." (Health Affairs)
[Official Guidance] Text of CMS Final Regs Requiring Drug Pricing Transparency for Medicare and Medicaid Programs
102 pages. "This final rule [amends] regulations for 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. This rule is intended to improve the efficient administration of the Medicare and Medicaid programs by ensuring that beneficiaries are provided with relevant information about the costs of prescription drugs and biological products so they can make informed decisions that minimize their out-of-pocket (OOP) costs and expenditures borne by Medicare and Medicaid, both of which are significant problems." [Editor's note: Includes over 80 pages of summary, analysis and response to the 147 comments received on the proposed regs. Also available: CMS Drug Pricing Transparency Fact Sheet.] (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
District Court Tells HHS to Revisit 340B Drug Discounts After Ruling Cuts 'Unlawful'
"CMS changed the program's payment rate from up to 6% more than the average price of drugs to 22.5% less than the average price, which cut $1.6 billion in 340B payments.... Judge Rudolph Contreras ... [reaffirmed] that cuts made under the 2018 Outpatient Prospective Payment System (OPPS) were unlawful and extended the ruling to include the 2019 cuts. However, he did not grant the relief requested by the hospital groups, which included the difference between the amount they received under the 2018 and 2019 OPPS rules and the amount they are entitled." [American Hospital Assoc. v. Azar, No. 18-2084 (D.D.C. May 6, 2019)] (FierceHealthcare)
Medicare Buy-In Option Beginning at 55 the Most Likely Expansion Route, Says Former CMS Chief
"Among the eight Democratic bills introduced so far to expand Medicare in various ways -- or to use it as the nominal basis for a single-payer system -- the Medicare buy-in approach was the focus of two bills.... These 'Medicare at 50' bill provisions would: [1] Allow buy-in starting at age 50; [2] Add the option of Medicare Parts A, B and D, or an MA plan to [ACA] marketplaces; [3] Use Medicare payment rates; [4] Include Medicare limits on balance billing." (Healthcare Financial Management Association [HFMA])
Medicare's Financial Condition: Beyond Actuarial Balance (PDF)
"The program faces three fundamental long-range financing challenges: [1] Income to the HI trust fund is not adequate to fund the HI portion of Medicare benefits; [2] Increases in SMI costs increase pressure on beneficiary household budgets and the federal budget; and [3] Increases in total Medicare spending threaten the program's sustainability.... [T]his issue brief ... examines the findings of the Medicare Trustees Report with respect to program solvency and sustainability." (Medicare Subcommittee, American Academy of Actuaries)
House Rules Committee to Hold Hearing on the Medicare for All Act
"[T]he House Rules Committee will hold an original jurisdiction hearing on the Medicare for All Act of 2019 on Tuesday, April 30th at 10am ET ... More than 100 members have already cosponsored the [Act] which would improve and expand the ... Medicare program so that every person living in the United States has guaranteed access to healthcare with comprehensive benefits." (U.S. House of Representatives Committee on Rules)
CMS Announces New Initiative for Value-Based Transformation of Primary Care
"The Initiative aims to improve quality and patient experience of care while reducing administrative burdens and lowering overall healthcare costs. The Initiative consists of five payment model options in two broad paths: [1] Primary Care First (PCF) and [2] Direct Contracting.... The PCF compensation structure contemplates a population-based payment, a flat primary care visit fee, and a performance adjustment assessed and paid quarterly that provides an upside of up to 50% of revenue and a small downside of 10% of revenue....The Direct Contracting models aim to transform fee-for-service (FFS) in Medicare by offering capitated and partially capitated payments to model participants." (Sheppard Mullin)
CMS Launches Value-Based Primary Care Initiative With Downside Risk
"HHS anticipates that 25% of traditional Medicare beneficiaries will opt into the initiative, which will launch in January. The models incentivize providers to reduce hospitalizations and cost of care by rewarding them through performance-based payments. There is downside risk of 10%, about the equivalent of revenue cycle costs. There is an upside potential of 50% that will be based on risk-adjusted hospitalizations." (HealthLeaders Media)
2019 Medicare Trustees Report (PDF)
249 pages. "The estimated depletion date for the [hospital insurance (HI)] trust fund is 2026, the same as in last year's report. As in past years, the Trustees have determined that the fund is not adequately financed over the next 10 years.... In 2018, HI expenditures exceeded income by $1.6 billion. The Trustees project deficits in all future years until the trust fund becomes depleted in 2026.... Growth in HI expenditures has averaged 3.0 percent annually over the last 5 years, compared with non-interest income growth of 4.4 percent. Over the next 5 years, projected annual growth rates for expenditures and non-interest income are 7.0 percent and 5.7 percent, respectively." [Also available: 2019 Expanded and Supplementary Tables and Figures (ZIP).] (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
DOJ Takes Aim at Telemedicine with Indictments in $1.2 Billion Medicare Fraud Scheme
"The recently unsealed indictments allege a broad national and international scheme in which telemarketers and telemedicine companies were paid for their patient referrals. Paying for Medicare patient referrals is a clear violation of the federal Anti-Kickback Statute. These prosecutions confirm that the government will always view prohibited referral arrangements, cross-referral arrangements, and other incentives between telemedicine providers and physicians as highly problematic." (Morris, Manning, & Martin, LLP)
Sens. Cruz, Paul, Lee Reintroduce Retirement Freedom Act
"[T]he Retirement Freedom Act (S.1030) ... would allow senior citizens the choice to opt-out of Medicare Part A and utilize other healthcare options without being forced to lose their Social Security benefits. Rep. Gary Palmer (R-Ala.) introduced companion legislation in the House of Representatives." (U.S. Senator Ted Cruz [R-TX])
CMS Issues 2020 Medicare Part D Benefit Parameters Used for Creditable Coverage Disclosures
"CMS has released the following 2020 parameters for the defined standard Medicare Part D prescription drug benefit: [1] Deductible: $435 (a $20 increase from 2019); [2] Initial coverage limit: $4,020 (a $200 increase from 2019); [3] Out-of-pocket threshold: $6,350 (a $1,250 increase from 2019); ... and [4] Minimum cost-sharing under the catastrophic coverage portion of the benefit: $3.60 for generic/preferred multi-source drugs (a $.20 increase from 2019), and $8.95 for all other drugs (a $.45 increase from 2019)." (Thomson Reuters / EBIA)
CMS Expands Telehealth Benefits under Medicare Advantage
"Historically, MA Plans have been able to offer certain telehealth services as part of their supplemental benefits. The Final Rule ... [allows] MA Plans to offer telehealth services outside of supplemental benefits, which CMS contends will expand patients' access to telehealth services from more providers in both rural and urban settings throughout the United States." (Sheppard Mullin)
What Are the Medicare Secondary Payer Rules? (PDF)
"[An] arrangement that pays for or reimburses the Medicare premiums of current employees violates the MSP rules -- whether or not it's offered on a tax-free basis. Similarly, an employer that offers money to Medicare-entitled employees in exchange for those employees waiving coverage under the group plan also violates the rules.... [I]nformal guidance indicates that no violation of the MSP rules occurs where employees entitled to Medicare have the same rights as employees not entitled to Medicare under a bona fide cash-out or cash-in-lieu arrangement offered under a cafeteria plan." (Cowden Associates, Inc.)
[Guidance Overview] CMS Finalizes Policies to Bring Innovative Telehealth Benefit to Medicare Advantage
"CMS is finalizing changes that would allow Medicare Advantage beneficiaries to access additional telehealth benefits, starting in plan year 2020. These additional telehealth benefits offer patients the option to receive health care services from places like their homes, rather than requiring them to go to a healthcare facility." [Also available: Fact Sheet for Contract Year 2020 Medicare Advantage and Part D Flexibility Final Rule .] (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Medicare and Medicaid Contain Costs Better Than Private Insurers
"[F]rom 2006 to 2017, per-enrollee spending grew 2.4% in Medicare, 1.6% in Medicaid and 4.4% in private plans annually. While the overall spending growth in the two federal programs is higher than in private plans -- Medicare rose 5.2% per year and Medicaid 6.0%, compared to 4.4% in private programs -- the [Urban Institute report] attributes it to faster enrollment growth in public programs. Prescription drug spending was the major driver of growth in Medicare spending per enrollee from 2006 to 2017, while in Medicaid, the major component of growth was spending on physician services." (AISHealth)
'Medicare for All' Could Eliminate the $600 Billion Insurance Industry
"It's hard to overstate the magnitude of such an overhaul. UnitedHealth was ranked fifth on the 2018 Fortune 500 list, grossing more than $226 billion last year; Anthem and Aetna (premerger with CVS) were both in the top 50. Those three companies alone employed more than 364,000 people in 2017. The prospect of all of that simply vanishing has the industry preparing for a fight." (Fortune)
U.S. Health Care Coverage and Spending, 2017
"Private health insurance spending, as a percentage of all health consumption expenditures, has increased by about 12 percentage points since 1960. This growth is partially due to increases in enrollment and, when considered alongside the implementation and expansions of Medicare and Medicaid, corresponds with the drop in out-of-pocket spending since 1960." (Congressional Research Service [CRS])
Medicare Won't Pay For Your Annual Physical, Just A 'Wellness Visit'
"An annual physical typically involves an exam by a doctor along with bloodwork or other tests. The annual wellness visit generally doesn't include a physical exam, except to check routine measurements such as height, weight and blood pressure. The focus of the Medicare wellness visit is on preventing disease and disability by coming up with a 'personalized prevention plan' for future medical issues based on the beneficiary's health and risk factors." (Kaiser Health News)
HHS Proposes Changes to Rebates for Part D Plans Under the Anti-Kickback Statute
"HHS has requested feedback on many aspects of the proposals such as ... the impact upon beneficiary access to prescription pharmaceutical products either due to cost or formulary placement.... If enacted, the proposals will likely lead to an increase in the Part D premiums as it will substantially alter the relationship between pharmaceutical manufacturers, Medicare Part D plans, PBMs, and participants. The new relationship could also extend to or impact those in the non-Medicare, i.e., commercial, marketplace." (Cheiron)
Americans Cite Healthcare Expenses as No. 1 Barrier to Early Retirement
"When asked to name barriers to financial independence and early retirement, Americans are less concerned about uncertain market conditions (37 percent) or inflation (35 percent), than they are about healthcare costs (57 percent)... An overwhelming majority of Americans (76 percent) point to Medicare as the best way to pay for healthcare in retirement. Yet more than half of pre-retirees (61 percent) are not confident that it will cover the bulk of their retirement medical expenses." (TD Ameritrade)
'Medicare-For-All' Bill Introduced in the House -- Why Does It Matter?
"[T]he transition to the new Medicare-for-all system would take place over two years ... This House vision of Medicare-for-all would also cover long-term care.... The House bill also would take a swipe at high prices for prescription drugs by empowering the government to negotiate prices directly with manufacturers and to take away and reissue drug patents if such efforts faltered." (Kaiser Health News)
Congress Mulls Cap on What Medicare Enrollees Pay for Drugs
"The effort to cap out-of-pocket costs in Medicare's prescription plan is being considered as part of broader legislation to restrain drug prices. Limits on high medical and drug bills are already part of most employer-based and private insurance. They're called 'out-of-pocket maximums' and are required under the Obama-era health law for in-network services. But Medicare has remained an outlier even as prices have soared for potent new brand-name drugs, as well as older mainstays such as insulin." (Associated Press)
'Pathways to Success' MSSP Final Rule: Financial Benchmark
"On December 31, 2018, [CMS] published a final rule that ... includes changes to the financial benchmark methodology that measures the gross savings or losses of an accountable care organization (ACO) under the [Medicare Shared Savings Program]. Four key elements of the financial benchmark methodology changed: agreement period length, regional fee-for-service (FFS) adjustment, risk adjustment, and trend." (Milliman)
74 Medicare ACOs Depart
"The departures of 13 percent of Medicare' ACOs left 487 in the program in 2019... [A] total of 59 MSSP ACOs dropped out of the program in 2016 and 2017... 26 percent of ACOs that reached the end of their three-year agreement opted to not renew their agreement at the end of 2018." (Healthcare Financial Management Association [HFMA])
Medicare Part D Disclosures Due by March 1 for Calendar Year Plans (PDF)
"Employers with health plans that provide prescription drug coverage to individuals who are eligible for Medicare Part D are subject to certain disclosure requirements. Plan sponsors must complete an online disclosure form with CMS within 60 days after the start of the plan year, or March 1, 2019, for calendar year plans." (Cowden Associates, Inc.)
[Guidance Overview] HHS OIG Proposes Anti-Kickback Safe Harbor Amendments to Regulate and Restrict the Provision of Manufacturer Remuneration to Plan Sponsors and PBMs
"As rebates paid by pharmaceutical manufacturers to health plan sponsors and PBMs are a central feature of the U.S. drug distribution and reimbursement system, the Proposed Rule represents a groundbreaking reform measure that could dramatically impact consumers and supply chain stakeholders. If finalized, the Proposed Rule would go into effect on January 1, 2020." (Epstein Becker Green)
[Guidance Overview] HHS Proposes New Rules to Eliminate Drug Rebates and Encourage Direct Discounts
"The proposed rule has the potential to cause significant disruption to the status quo of the drug supply chain. PBMs interact and affect all stakeholders throughout the prescription drug supply chain and markets, including prescription drug benefit plans ... pharmaceutical manufacturers and pharmacies." (Foley & Lardner LLP)
[Guidance Overview] HHS Proposes Rule Challenging Drug Manufacturer Rebates to PBMs and Payors
"The Proposed Rule would make explicit that the AKS discount safe harbor does not protect manufacturer rebates on prescription drugs paid to Medicare Part D plan sponsors, Medicaid managed care organizations (MCOs), or pharmacy benefit managers (PBMs) in the context of these government programs. The Proposed Rule would create new safe harbors for certain point-of-sale price reductions on prescription drugs and for certain PBM service fees paid by manufacturers." (King & Spalding)
[Guidance Overview] Administration Releases Long-Awaited Drug Rebate Proposal
"[T]he proposed rule envisions two new safe harbors: one for rebates which are passed on to the patient at the point of sale, and another for flat service fee payments made to PBMs, which could not be tied to the list prices of drugs." (Rachel Sachs, in Health Affairs)
Winners and Losers Under HHS Plan to Slash Drug Rebate Deals
"Consumers are unlikely to collect the full benefit of eliminated rebates. At the same time, the change would produce uncertain ricochets, including higher drug-plan premiums for consumers, that would produce new winners and losers across the economy.... Possible Winners: Chronically ill patients who take lots of expensive medicine ... Drug companies ... Possible Losers: Pharmacy benefit managers ... Insurance companies ... Patients without chronic conditions and high drug costs." (Kaiser Health News)
Estimates of the Impact of Eliminating Rebates for Reduced List Prices at Point-of-Sale for the Part D Program (PDF)
10 pages. "[T]he average beneficiary would have a premium increase of about 8%, and average beneficiary cost sharing would be reduced by about 9.5%.... [T]he net effect for beneficiaries is a 2% reduction in out-of-pocket expenses.... [A]pproximately 30% of non-low income beneficiaries will see a net savings ... [T]he other 70% of non-low income beneficiaries will on average experience a net increase in out of pocket expenses.... [T]he drug spend level threshold at which the non-low income beneficiary begins to experience a net savings will occur at an annual spend of $2,200 to $2,500." (Wakely Consulting Group, for Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS])
[Official Guidance] Text of HHS Proposed Regs: Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection for Certain Point-of-Sale Reductions in Price on Prescription Pharmaceuticals and Certain PBM Fees
123 pages. "The amendment would revise the discount safe harbor to explicitly exclude from the definition of a discount eligible for safe harbor protection certain reductions in price or other remuneration from a manufacturer of prescription pharmaceutical products to plan sponsors under Medicare Part D, Medicaid managed care organizations ... or pharmacy benefit managers (PBMs) under contract with them. In addition, the Department is proposing two new safe harbors. The first would protect certain point-of-sale reductions in price on prescription pharmaceutical products, and the second would protect certain PBM service fees." (Office of Inspector General, U.S. Department of Health and Human Services [HHS])
Essential Facts About Medicare and Prescription Drug Spending
"[1] Medicare's share of the nation's retail prescription drug spending has increased from 18% in 2006 to 30% in 2017.... [2] Prescription drugs covered under both Part B and Part D accounted for 19% of all Medicare spending in 2016.... [3] Ten drugs accounted for 17% of all Part D spending in 2016 ... [4] Prescription drugs accounted for $1 in every $5 that Medicare beneficiaries spent out-of-pocket on health care services in 2016, not including premiums." (Henry J. Kaiser Family Foundation)
Calendar Year Health Plans Must Complete Online CMS Disclosure by March 1, 2019
"The plan sponsor must complete the disclosure within 60 days after the beginning of the plan year. Sponsors of insured plans may choose to file within 60 days after the beginning of the insurance contract year, but whatever approach is adopted, it should be used consistently.... A CMS filing is also required within 30 days of termination of a prescription drug plan and for any change in a plan's creditable coverage status." (Lockton)
Enhancing Work Incentives for Older Workers: Social Security and Medicare Proposals to Reduce Work Disincentives (PDF)
24 pages. "[The authors consider three proposals:] ... [1] eliminating the earnings test for participants between age 62, the early retirement age (ERA), and the full retirement age (FRA) ... [2] creating a paid-up status for Social Security, a point at which employees and employers would no longer be required to pay the payroll tax and earnings would not alter future benefits.... [3] a paid-up status for Medicare, coupled with a policy shift for Medicare that would return the program to its original status as the primary payer for covered expenditures rather than its current status as the secondary payer." (Robert L. Clark and John B. Shoven, for The Brookings Institution)
Medicare Expands Value Pay in MA and Part D Plans
"The voluntary expansion will be open to MA plans, Regional Preferred Provider Organizations, and all special-needs plans.... The new VBID models will focus on one or more of the following: [1] Condition- or socioeconomic-based designs; [2] Rewards and incentives programs; [3] Telehealth networks; [4] Wellness and healthcare planning." (Healthcare Financial Management Association [HFMA])
GAO Report: Medicare -- Voluntary and Mandatory Episode-Based Payment Models and Their Participants
"GAO was asked to review the episode-based payment models developed by CMS. This report [1] describes the characteristics of the providers that participated in these models and [2] compares the relative advantages of voluntary versus mandatory episode-based payment models, as identified by stakeholders." [GAO-19-156, published Dec. 21, 2018, released Jan. 22, 2019] (U.S. Government Accountability Office [GAO])
[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)
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