A final rule by the U.S. Department of Health and Human Services (HHS) and an interim final rule by the Centers for Medicare and Medicaid Services (CMS) that focus on drug costs in Medicare Part B and Part D were recently published.
While the rules were released as final and interim final, respectively, the road ahead is uncertain. It appears likely the rules will face legal challenges prior to or after the effective dates of their provisions. It is difficult to predict whether the policies finalized in these rules will reduce the total cost of drugs for the government and Medicare beneficiaries as intended.
Milliman professionals explore the two rules and explain their implications for Medicare drug pricing in this article.
While there is a great deal of focus on resource availability and handling a potential influx of severe inpatient cases resulting from COVID-19 infections, the majority of the United States saw a dramatic reduction in healthcare services around March and April 2020 and measurable reductions continue with great variation across the nation.
As with many prospective risk adjustment models, Medicare Advantage (MA) and Part D (PD) risk scores are based on medical claims, more specifically diagnoses from face-to-face visits from the year prior to the year in which the risk score drives revenue. For 2021 MA payments, 2020 diagnoses are the basis of the final risk scores. To the extent that beneficiaries delay or avoid care, there may be fewer face-to-face encounters with providers where diagnoses can be recorded and applied toward 2021 risk scores.
While the Centers for Medicare and Medicaid Services has announced additional flexibilities in including telehealth-based diagnoses in risk score calculations, a significant reduction in overall services is likely to result in a material reduction in both MA and PD risk scores. In this article, Milliman’s Rob Pipich, Karin Cross, and Deana Bell discuss the results of an analysis they performed to support 2021 MA and PD bids. They present nine scenarios intended to illustrate a range of potential outcomes on 2021 MA and PD risk scores.
As the public discourse continues to focus on the high cost of healthcare, an increasing number of payers and healthcare organizations are turning to ride-sharing services such as Uber or Lyft for nonemergency medical transportation (NEMT). In fact, Lyft reports that nearly one-third of its passengers use the service to get to or from a medical-related appointment. The healthcare industry has also seen the emergence of a number of third-party companies, such as Circulation and Roundtrip. These companies aim to manage the NEMT experience between patients and providers like social workers or clinics.
As these options become more mainstream, numerous healthcare organizations—including health insurance plans, hospitals, provider groups, clinics, rehab centers, senior care facilities, home care centers, and physical therapy centers—have started offering ride-sharing services by partnering with these companies, with the goal of providing a meaningful benefit to beneficiaries and improving healthcare outcomes. The infographic below, based on this Milliman article, outlines a number of considerations for healthcare organizations thinking of adding ride-sharing as part of a benefit plan.
As the public discourse continues to focus on the high cost of healthcare, an increasing number of payers and healthcare organizations are turning to ride-sharing services such as Uber or Lyft for nonemergency medical transportation.
With the introduction of services like Uber Health and Lyft Concierge, ride-sharing companies have officially expanded into the area of nonemergency medical transportation (NEMT). The healthcare industry has also seen the emergence of a number of third-party companies, such as Circulation and Roundtrip. These companies aim to manage the NEMT experience between patients and providers like social workers or clinics.
In this article, Milliman’s Deana Bell and Cameron Gleed discuss the pros and cons of adding ride-sharing as part of a benefit plan.
In recent years, rising prices of prescription drugs have been a concern for beneficiaries, payers, and the federal government. Another concern has been the lack of transparency about the true cost of a drug due to the complex ecosystem that can make a payer’s price lower than the actual point-of-sale (POS) price.
Given the design of the Medicare Part D program and the complex nature of sharing costs among the member, the federal government, and the Part D plan sponsors, the savings generated from rebates are not shared equally and directly among these stakeholders. Part D plan sponsors may use the savings from rebates to lower premiums. If rebates were instead applied at the POS, then they could lower beneficiary cost sharing, manufacturers’ coverage gap discount program payments, and reinsurance costs, possibly leading to premium increases. Because Part D is a competitive market where premiums are a primary driver of enrollment, Part D plan sponsors typically use rebates to reduce premiums rather than providing POS discounts.
The topic of rebates has been hotly debated and many industry experts believe that by not applying rebates at the POS, plan sponsors create a financial burden on beneficiaries using rebated medications. The Centers for Medicare and Medicaid Services (CMS) has released several communications and proposals addressing the issue of high drug costs and the financial burden on beneficiaries using rebated medications. In May 2018, the Trump administration released American Patients First, a blueprint to lower drug prices and reduce out-of-pocket costs, which includes moving at least a portion of rebates to the POS.
On January 31, 2019, the U.S. Department of Health and Human Services (HHS) released a proposed rule changing the current discount safe harbor under the Anti-Kickback Statute of the Social Security Act. This proposal would remove the safe harbor protecting rebates after the POS, or other direct and indirect remuneration (DIR) from drug manufacturers, paid to Medicare Part D plan sponsors, Medicaid managed care organizations (MCOs), and the PBMs providing services to these organizations. This proposal also would create two new safe harbors, one allowing payments from drug manufacturers to payers as long as they are included at the POS and one allowing certain payments from manufacturers to PBMs for services provided to the manufacturer by the PBM. This proposed rule currently only applies to Medicare Part D and Medicaid MCOs, although the Secretary of HHS has also asked Congress to pass a law that would extend this regulation to the commercial market.
In this article, Milliman’s Deana Bell, Jennifer Carioto, and Matthew Hayes explore what Part D plan sponsors need to consider when rebates cease to exist.
In 2017, there were many changes to Medicare Advantage (MA) risk adjustment as the transition continued from Risk Adjustment Processing System (RAPS) data to Encounter Data System (EDS) data. MA organizations will also experience complexity and challenges in payment year (PY) 2019.
This article by Milliman’s Deana Bell, David Koenig, and Charlie Mills compares EDS and RAPS risk scores and details some of the program highlights from the past 12 months:
• A 25% EDS weight for PY 2017
• EDS file layout updates
• PY 2016 EDS deadline extension and change to payment timing
• PY 2017 RAPS and EDS deadline extensions
• Including inpatient RAPS diagnoses in EDS risk scores for PY 2019