Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Issues and challenges in measuring and improving the quality of healthcare
The Congressional Budget Office (CBO) released a new paper providing an overview of the current state of measuring healthcare quality. The agency uses the Medicare program to illustrate the key issues and challenges that arise in doing so.

To download the paper, click here.

Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) enforcement report published
The Centers for Medicare and Medicaid Services (CMS) has published a new report to increase transparency with respect to enforcement of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Although CMS has taken action to ensure compliance with MHPAEA since its enactment in 2008, this report only includes MHPAEA investigations completed in 2016 and beyond.

To download the report, click here.

 

Developing alternative payment models under MACRA

Alternative payment models (APMs) have become a popular way to tie payment to quality of care. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) created incentives for providers to participate in APMs. This paper by Daniel Muldoon and Pamela Pelizzari explores key clinical and financial considerations that need to be addressed in a robust APM proposal.

Implementing new pharmacy benefit manager

Sponsors of prescription drug plans that decide to change pharmacy benefit managers (PBMs) may need help with pre- and post-implementation tasks. An experienced consultant can work with a sponsor to navigate complex contractual terms, develop an implementation plan, and conduct annual audits to ensure that the sponsor continues to receive the pricing terms and rebates negotiated with the PBM.

This paper by Milliman’s Angela Reed and Brian Anderson explores the PBM implementation process. The authors highlight key items that sponsors must consider for a successful PBM implementation and how an implementation manager can assist.

Increasing ACA plan premiums show that age is not just a number

In 2018, the federal age curve of the Patient Protection and Affordable Care Act (ACA) is changing for the first time. As a result, ACA premiums for individuals under 21 years of age will increase. It is important for health insurers to develop a communications plan that will explain to members why their premiums are increasing.

In their article “Are health carriers ready to explain the 2018 age curve?,” Milliman’s Amy Giese and Nicholas Krienke outline the ways carriers can communicate with members. The authors also discuss some underlying issues carriers must consider to effectively communicate the age curve’s effect on premiums.

Individual stop-loss is now optional for Next Generation ACOs

Next Generation Accountable Care Organizations (NGACOs) now need to choose between whether they want to have their annual financial reconciliations based upon capped claims or uncapped claims. Previously, they didn’t have a choice and reconciliations were based upon capped claims. For some NGACOs, the choice between an annual financial reconciliation based upon capped claims or uncapped claims could have significant impact. Milliman consultants provide more perspective in this paper.

CMS proposed rules would impact Part D drug costs and plan designs

On November 16, 2017, the Centers for Medicare and Medicaid Services (CMS) released 713 pages of proposed changes to Medicare Advantage (MA) and the Medicare Part D prescription drug benefit. The proposed changes (file code CMS-4182-P) would take effect for contract year 2019 and are intended to manage utilization of opioids, reduce costs, and provide more plan choices. The updates present major changes to the way the programs operate. According to CMS, “the proposed changes would result in an estimated $195 million in savings a year for the Medicare program over 5 years (2019 through 2023).”

Some significant impacts on Part D that plans need to be aware of would include:

Midyear formulary changes: Plans would have more flexibility to immediately incorporate generic drugs as soon as they are available.

• Plans could assess the cost impact of each new generic drug based on member utilization to weigh against administration and disruption issues.
• This proposed rule could be significant, especially if the increases in generic approvals continue. According to Milliman’s internal research, there were about 14 and 31 significant first generic launches in 2015 and 2016, respectively. And this year the U.S. Food and Drug Administration (FDA) has continued to speed up the generic approval process.

Opioid treatment: Plans would be able to restrict access and manage opioid utilization. The proposed rules codify and expand upon the current Part D Opioid Drug Utilization Review Policy and Overutilizing Monitoring System.

Biosimilars: Plans would be able to categorize certain low-cost biosimilars as generics for low-income subsidy (LIS) cost sharing and non-LIS catastrophic cost sharing. Because the LIS copays in 2018 will be $3.35 for generics and $8.35 for brands, this is likely not to have a large impact on 1) lowering member costs, or 2) increasing biosimilar utilization.

Point-of-sale costs: The proposal includes a request for information (RFI) regarding applying price concessions and rebates at the point of sale, which could lower member cost sharing when taking brand medications that offer rebates, but may increase premiums and government cost.

Meaningful differences testing: With the elimination or modification of this testing, plans may be able to add more enhanced alternative Part D plans to their product portfolios in the same region.

A link to the Fact Sheet issued by CMS can be found here. CMS is accepting comments until January 16, 2018.