Americans today are facing an opioid epidemic that stems in part from the misuse of prescription drugs. CMS takes aim at this crisis in its CY 2019 Medicare Advantage and Part D  Proposed Rule (Proposed Rules) by setting out a framework for Part D plans to monitor and reduce the potential misuse of frequently abused prescription drugs. (Those interested in a high-level overview of the Proposed Rules should see our post from last month). Continue Reading Proposed Medicare Advantage and Part D Regulations for CY 2019 – CMS Takes on the Opioid Epidemic

This week, in their “Future of the Affordable Care Act” series on our Employment Matters blog, my colleagues Alden Bianchi and Edward Lenz provided an analysis of the major provisions of the American Health Care Act (“AHCA”).

Introduced on March 6, 2017, the AHCA is the first concrete legislative proposal detailing the initial provisions designed to repeal and replace the Affordable Care Act.  As Alden and Ed discuss, the bill currently is the subject of widespread media scrutiny and intense criticism.  The bill is not final and will likely face numerous changes, including the last minute proposals changes of the past 48 hours.  The March 6th version offers an outline of Republican priorities in the regulation of health and health care financing, which include a strong bias in favor of market-based solutions and aversion to most (but not all) government intervention in the health care markets.

Check out their full analysis on The Future of the Affordable Care Act Week 7: The American Health Care Act, here. Continue Reading Future of the Affordable Care Act and the American Health Care Act

Republicans have been talking about remodeling the Medicaid program through block grants or per capita caps for years.  Both block grants and per capita caps are designed to limit federal spending by providing a state with a set amount of federal money to fund its Medicaid program.  With the sweeping Republican victory, Republicans are in a position to move forward with these policies, primarily focused on block grants.  But, there are three main questions to consider in designing a block grant program, each of which could prove controversial.

Which populations would be included in the block grant?

Any block grant proposal must determine which populations are included in the block grant.  While some proposals have included all Medicaid populations, others have specifically excluded the elderly and disabled, leaving them in the existing Medicaid program.

What services would be covered by Medicaid under the block grant?

Currently, states are required to provide a set of mandatory services in order to receive federal funds.  A block grant proposal must consider and address whether the current set of services would still need to be covered under the block grant funds, and if not, what services would be covered.  Any reduction in the coverage of mandatory services would likely be hotly debated.

What federal funds would be provided to the states?

A block grant proposal must also determine what federal funds will be provided to the states.  Funding includes two parts: (1) the initial amount provided, and (2) how much is providing moving forward. In any block grant proposal written with the express purpose of reducing federal spending on Medicaid, the funding choices will be extremely controversial and perhaps rejected by states, including those with Republican governors.

While the road to Medicaid block grants may be open for Republicans come January, there are still many questions as to how such a policy would be implemented and how it will fit with other health reform proposals.

Today, our colleagues at ML Strategies released their first look at what the results of Tuesday’s election mean for health care.  The client alert addresses both the lame duck session and what to expect in 2017 and beyond.  Key issues areas include the future of the Affordable Care Act, MACRA, drug pricing, and FDA User Fee Act reauthorization.

In the coming days, ML Strategies will be sharing further insight into what the election means for health care and what to expect from the new administration and Congress.

Last week, the Department of Health and Human Services (“HHS”) released new materials for covered entities to use to comply with Section 1557, the nondiscrimination provision of the Affordable Care Act. Section 1557 strengthens protections for populations that have been most vulnerable to discrimination in the health care setting by stating that individuals cannot be subject to discrimination based on race, color, national origin, sex, age, or disability.

Continue Reading New Materials Help Covered Entities Comply with Nondiscrimination Rules

Massachusetts Secretary of Health and Human Services, Marylou Sudders, held a public meeting earlier this week to receive feedback on the proposal of the Executive Office of Health and Human Services (EOHHS) to overhaul the Massachusetts Medicaid program, known as MassHealth.  Overall, the feedback received at the meeting was positive and signaled a consensus that the proposed reforms are on the right path, though greater detail is needed.

What does reform look like?

Last week, proposing the first major reform of MassHealth in about twenty years, EOHHS announced the details of its vision for the new MassHealth Accountable Care Organization (ACO) Program and its plans to request a Medicaid Waiver amendment to implement the program.  EOHHS cited unsustainable cost growth in the MassHealth plan as the driver for its proposed restructuring and explained that it has an “urgent window of opportunity” to renegotiate its Medicare 1115 Waiver to support this initiative.

The goal is to transform MassHealth from a fee-for-service (FFS), “siloed” care delivery to a program based on integrated ACO models. EOHHS defines ACOs as “provider-led organizations that coordinate care, have an enhanced role for primary care, and are rewarded for value – better cost and outcomes – not volume.”  The plan would continue to rely on Medicaid Managed Care Organizations (MCOs) to pay claims and work with ACO providers to improve care delivery. Continue Reading Massachusetts Establishes Road-Map for New ACO Program

For too long, health industry stakeholders have bandied about massive amounts of information that could not be used in a comparative sense.  Both public and private payers had their own proprietary reporting metrics, providers banged their heads against the wall chasing all those different metrics, and consumers had no actionable information, leaving them to seek care from providers they “like.”

Last week, the Core Quality Measures Collaborative, led by America’s Health Insurance Plans (AHIP) and its member plans’ Chief Medical Officers, leaders from CMS and the National Quality Forum (NQF), as well as national physician organizations, employers and consumers, released seven sets of clinical quality measures.  The measures signal, for the first time, multi-payer alignment on core measures for a provider quality program.

The Collaborative recognized a need for information about health care quality that could be used to inform the decisions of consumers, employers, physicians and other clinicians, and policymakers.  With this agreement, there is a real opportunity for all stakeholders to have truly comparable information.  The new core measure sets focus on the following areas:

Continue Reading Groundbreaking Multi-Payer Alignment on Core Measures for Quality-Based Payments

Last week, Mintz Levin and ML Strategies released a joint Alert analyzing key provisions of the Covered Outpatient Drug final rule (“Final AMP Rule”) and their impact on manufacturers, pharmacy benefit managers (“PBMs”), and pharmacies.  The Alert focuses on the following four provisions: (i) the definition of bona fide service fees; (ii) the definition of bundled sales; (iii) the definition of retail community pharmacy; and (iv) the change in Medicaid reimbursement to reimbursement based on Actual Acquisition Cost (“AAC”).

On the heels of the release of the Final AMP Rule, CMS released a State Medicaid Director Letter providing guidance on implementation of the Final AMP Rule.  The letter provides practical instructions to the states on their obligation to adopt a Medicaid reimbursement methodology for AAC that reflects the “actual prices” pharmacy providers paid to acquire the drugs.  In addition to instructions for setting a Medicaid reimbursement methodology based on AAC, the letter advises states on their obligation to set a professional dispensing fee that reflects the pharmacist’s professional services and costs.   CMS does not dictate that states use a specific methodology or formula for establishing a professional dispensing fee, but warns that the fee must be sufficient to provide adequate reimbursement and ensure sufficient beneficiary access.

In the State Medicaid Director Letter, CMS also instructs states that their obligation to reimburse pharmacies at AAC carries consequences for the 340B Drug Discount Program. The AAC-based Medicaid reimbursement for drugs purchased through the 340B program should not exceed the 340B ceiling price – the price at which most covered entities will purchase the drug.  The requirement to reimburse at no more than the 340B ceiling price will apply regardless of whether the reimbursement is made to a 340B covered entity or its contract pharmacy. Continue Reading CMS Notifies States of AMP Rule Requirements: 340B Providers Should Take Note

Earlier today, my colleagues at ML Strategies published the Washington Outlook for 2016, offering their insights about what we might expect from Capitol Hill and the Administration in the coming year. The Outlook covers a wide range of issues and includes a preview of the US legislative agenda as well as a look at the Obama Administration’s regulatory plans.

Also, check out the Outlook’s Appendix for an election season cheat sheet, including the dates of the US state primaries and lists of the important Senate and House races to watch, as well as the 2016 House and Senate calendars.

With regard to health care, it is likely that the Administration’s signature health care law will continue to be at the forefront of its domestic agenda.  ML Strategies says that we should expect additional activity on targeted bipartisan reform efforts to modify the ACA.  Issues include:

  • The “30-hour work week” fix.
  • The Simplifying Technical Aspects Regarding Seasonality Act, or the “STARS Act,” which would exempt seasonal employees from the definition of “full time employee” of the ACA’s employer mandate.
  • The “Small Business Healthcare Relief Act,” which would allow for small businesses with fewer than 50 employees that do not offer health insurance coverage to establish a health reimbursement arrangement.
  • Efforts to address rising insurance prices in the exchanges, which could include efforts to modify insurance “rating,” or pricing rules.

Continue Reading ML Strategies Publishes Washington Outlook for 2016

As we start a new year, let’s take a look back at a few hot topics that emerged in the managed care industry in 2015 and will likely be drivers of developments in 2016.

Industry Consolidation – The Changing Landscape

2015 was a year of significant activity for MCOs large and small. In addition to proposed mergers among some of the largest payors, smaller MCOs are also consolidating with other MCOs, as well as service providers, in an attempt to leverage purchasing power and integrate care models. As we discussed in our Pharmacy Industry year in review, consolidation reshaped the traditional PBM industry paradigms with a move away from stand-alone PBMs to MCO and provider-affiliated PBMs.

Competition Scrutiny

Moving into 2016, we will learn whether the proposed consolidations will be approved and whether the trend will continue. The government will also generally continue to scrutinize health care competition, paying close attention to the proposed mergers among Aetna/Humana and Anthem/Cigna. In early 2015, our colleagues highlighted the FTC-DOJ workshop examining health care competition where the agencies’ worked together to identify and examine the potential competitive implications of strategies currently used by providers and payors seeking to reduce costs and improve quality.

We are also beginning to see competition scrutiny expand beyond the regulatory agencies. For example, the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law held hearings examining competition in the PBM industry, while the Central District of Illinois District Court permitted a small regional hospital’s antitrust challenge to its largest competitor’s exclusive dealing contracts with payors to move forward. Continue Reading The Managed Care Industry – 2015 Year in Review