The Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) has announced cost-of-living adjustments (COLAs) for Medicare Parts A and B for 2020. In April this year, CMS announced the 2020 amounts for the Medicare Part D standard prescription drug benefit.
For more perspective, read this Milliman Client Action Bulletin.
Pharmacy Briefing is a monthly summary of select U.S. Food and Drug Administration (FDA) approvals and launches, treatment guidelines and research updates, and other newsworthy events that have the potential to impact commercial drug utilization or costs.
- Consumers and third-party payers may be eligible for recent class action lawsuit settlement payments
- Descovy (emtricitabine/tenofovir alafenamide) is approved for use as HIV pre-exposure prophylaxis (PrEP) therapy
- Allergan reaches $750 million settlement over antitrust charges
- California bans “pay for delay” drug manufacturer agreements
FDA Approvals and Launches
- Descovy (emtricitabine/tenofovir alafenamide) is approved for use as HIV pre-exposure prophylaxis (PrEP) therapy.
- Prior to this approval, only Truvada (emtricitabine/tenofovir disoproxil) was approved for this indication.
- Generic versions of Truvada are expected to be available in September 2020.
- Aklief (trifarotene) cream and Amzeeq (minocycline) foam are approved to treat acne vulgaris.
- Beovu (brolucizumab-dbll) is approved to treat age-related macular degeneration.
- Alternative delivery system of Fasenra (benralizumab) is approved to treat eosinophilic asthma, pen allows patients to self-administer at home.
- Reyvow (lasmiditan) is approved for the acute treatment of migraine.
- Stelara (ustekinumab) receives additional approval to treat ulcerative colitis.
- Vumerity (diroximel fumarate) is approved to treat relapsing forms of multiple sclerosis.
Consumers and third-party payers may be eligible for recent class action lawsuit settlement payments
In September 2019, the State of Tennessee, Division of
Tenncare, released a draft version of Amendment 42 to its Section 1115
Demonstration Waiver, “Tenncare II Demonstration.” With the exception of
pharmacy and certain waiver services, the vast majority of Tennessee’s Medicaid
program services are funded under this Section 1115 Demonstration Waiver
authority. Amendment 42 makes Tennessee the first state to take concrete steps
to engage the Centers for Medicare and Medicaid Services in a proposed block
grant funding methodology.
A block grant funding arrangement is attractive from a
federal financing perspective because it establishes an authorized level of
spending, creating an incentive for states to better control costs. States
could also find this structure attractive because it includes a savings
component if efficient management of the program produces costs below the
authorized spending levels.
This paper by Milliman’s Jeremy Cunningham and Mat DeLillo discusses the risks and considerations of changing Medicaid’s funding formula to a general block grant structure.
Medicare provides 61 million beneficiaries nationwide with
healthcare coverage. Dental services, however, are not included in standard
Medicare benefits. As such, seniors and other Medicare recipients can face a
dental coverage gap.
Part C Medicare Advantage (MA) plans are helping to fill
that gap by covering some dental services as a supplemental benefit. MA dental
benefits can range from basic preventive dental care to comprehensive coverage
of all major dental services categories, can come as a value-added “free
benefit” in a zero-premium MA plan, embedded in an MA plan carrying a premium,
or offered as an optional “buy-up” benefit. The dental benefits offered in an
MA setting may be administered by the MA plan itself or as part of a contracted
arrangement with a dental insurer.
In this article, Milliman’s Joanne Fontana and Jacob Bryniarski, using publicly available data from the Centers for Medicare and Medicaid Services, explore the current landscape of dental benefits offered in MA plans and discuss the ramifications for both insurers and consumers.
The Centers for Medicare and Medicaid Services (CMS) issued
a Quality Rating Information Bulletin in August 2019, announcing that public
display of 2019 quality rating information by all exchanges will begin during
the individual market open enrollment period for the 2020 plan year. The
initial guidance regarding this program was released in October 2018, and there
have been several deadlines for health plans to meet throughout 2019. However,
there may be some uncertainty for both plans and consumers regarding what the
quality scores represent, how they are developed, and/or how they may be used
now or in the future.
This paper by Milliman’s Dustin Grzeskowiak, Darin Muse, and Daniel Perlman provides some clarity on these topics, general background on the program, and a summary of the 2019 quality information published by CMS in the public use file.
Compared with medical lines of business, dental products
typically have more predictable claim patterns, lower overall claim dollar
amounts, and much lower risks and severities of catastrophic claims. This
predictability can foster complacency in dental rate-setting. Some companies go
several years without a robust dental rating manual review or refresh.
Companies instead may choose to focus on rating manual updates for higher-risk
lines of business, and insurers may simply “trend forward” their dental rating
manuals year after year without taking a critical look at what they should change.
It’s important to periodically review dental rating
methodologies for actuarial soundness and to maintain competitive rates. If the
starting claim costs and pricing factors in a rating manual are stale, premiums
likewise will be stale and competitive positioning in the market could suffer
as a result.
In this paper, Milliman’s Tom Murawski and Sean Hilton discuss why actuarially sound rating manuals are essential to adequate and competitive pricing of dental insurance rates.