Tag Archives: Regs and guidance

Part D Payment Modernization Model Request for Application considerations

In February, the Center for Medicare and Medicaid Innovation released a Request for Applications (RFA) for the Medicare Part D Payment Modernization Model (PMM). The PMM is a voluntary program whose goal is to reduce Part D federal reinsurance costs by adding new program flexibilities and introducing a two-sided risk-sharing arrangement around federal reinsurance costs. Interested Part D plan sponsors were required to submit an application to the Centers for Medicare and Medicaid Services (CMS) by March 15 in order to participate in the 2020 plan year.

There are many unknowns and questions regarding the PMM RFA. Some of these questions are:

• Who is eligible to participate (and who would want to)?
• What types of formulary or other program flexibility might be offered?
• What costs are associated with participating?
• Will this really result in Part D savings?
• How should plans determine information required for the application without insight on key program aspects?
• How would the benchmark be calculated?
• How could this be affected by the U.S. Department of Health and Human Services (HHS) proposal to move drug rebates to point of sale?
• What are the financial implications to the bid?
• What are the potential risks with participating?

In this article, Milliman’s actuaries discuss the answers to these questions.

Regulatory roundup

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

Q&A issued following final rule on association health plans case
The U.S. Department of Labor (DOL) released questions and answers (Q&As) regarding the federal district court case ruling in State of New York v. United States Department of Labor concerning the department’s final rule on association health plans (AHPs).

The DOL published the Q&A to address questions that may arise in relation to the District Court’s decision. The Q&A will be updated as this matter evolves. The questions are:

• I get my benefits through an AHP. Does the court decision mean that my healthcare claims will not be paid?
• Will the Department appeal the decision?
• Do state insurance departments still have regulatory oversight of AHPs?
• May I contact the Department of Labor if I have more questions or concerns about the impact of the court ruling on my AHP?

To read the entire Q&A, click here.

New resource to help employers understand mental health issues
The DOL, in coordination with the Office of Disability Employment Policy (ODEP) and its Employer Assistance and Resource Network on Disability Inclusion (EARN), has launched a new resource to help employers better understand mental health issues and to provide guidance on how to cultivate a supportive workplace.

The Mental Health Toolkit is an online resource providing background, tools, and resources for employers seeking to offer a mental health-friendly workplace. It presents a framework for fostering a supportive workplace built around awareness, accommodations, assistance, and access.

To read the toolkit, click here.

New report focuses on healthcare costs of untreated behavioral health conditions
The Government Accountability Office (GAO) released “Behavioral Health: Research on Health Care Costs of Untreated Conditions is Limited.” GAO was asked to describe what is known about adults with untreated behavioral health conditions. This report examines (1) reasons why some adults with behavioral health conditions do not receive treatment for their condition, and (2) what is known about the healthcare costs associated with untreated behavioral health conditions in adults.

To download the report, click here.

Implications of proposed modifications related to pharmacy rebate safe harbors

In February, the Office of the Inspector General of the U.S. Department of Health and Human Services (HHS) released proposed modifications to safe harbor regulations in 42 CFR 100.952 (h) that protect pharmacy rebates from the federal anti-kickback statute.

The proposed update eliminates safe harbor protection for rebates provided by pharmaceutical manufacturers to Medicare Part D plan sponsors, Medicaid managed care organizations (MCOs), and pharmacy benefit managers (PBMs) acting under contract with either.

The proposed regulations do not explicitly affect the commercial market. The regulations also do not change the safe harbor with respect to drugs purchased through Medicare Part B fee-for-service plans, federal rebates collected for Medicaid MCO claims, or federal or supplemental rebates received directly by Medicaid state agencies.

As a potential replacement for removing the safe harbors, the regulation proposed new safe harbors for reductions in price reflected at the point of sale to the beneficiary. The proposed rule also outlines a protected structure for fixed service fees paid by manufacturers to PBMs.

In this paper, Milliman’s Christine Mytelka focuses on the potential implications of the proposal for state Medicaid agencies and the Children’s Health Insurance Program.

Regulatory roundup

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

CBO releases analysis on specialty drugs in Medicare Part D and Medicaid
The Congressional Budget Office (CBO) published “Prices for and Spending on Specialty Drugs in Medicare Part D and Medicaid: An In-Depth Analysis.” The report examines the net prices paid for specialty drugs and spending on those drugs in Medicare Part D and Medicaid over the 2010–2015 period. In each program, the net price for many drugs is lower than the amount paid to pharmacies, also referred to as the retail price, because of manufacturers’ rebates and other discounts.

For more information, click here.

Private health insurance enrollment report published
The Government Accountability Office (GAO) released “Private Health Insurance: Enrollment Remains Concentrated Among Few Issuers, Including Exchanges.” The report found that enrollment in private health insurance plans continued to be concentrated among a small number of issuers in 2015 and 2016.

In the overall large group market (coverage offered by large employers), small group market (coverage offered by small employers), and individual market (coverage sold directly to individuals), the three largest issuers held 80% of the market or more in at least 37 of 51 states. This is similar to what GAO previously reported for 2011 through 2014.

For more information, click here.

Court addresses mental health/substance abuse treatment parity under ERISA health plan

A federal judge recently ruled that a company administering mental health and substance use disorder benefits for ERISA-covered health benefit plans breached its fiduciary duty when it applied its own flawed medical review guidelines in rejecting plan participants’ claims for behavioral health services. ERISA requires fiduciaries to administer benefit plans solely in the interest of participants and beneficiaries and in accordance with plan documents.

Because the case, Wit v. United Behavioral Health (No. 14-cv-02346-JCS [as well as a related case, No. 14-cv-05337-JCS]), was decided by the U.S. District Court in the Northern District of California, it applies only to the parties involved. An appeal is possible, perhaps after the remedy phase of the case is completed and a final judgment is issued.

The court noted that the administrator abused its discretion when it adopted its guidelines in several ways, such as:

  • Having a conflict of interest because a large portion of its revenues came via pressure to keep expenses down
  • Not insulating the individuals who developed, revised, and approved the guidelines from financial considerations
  • Refusing to adopt generally accepted clinical guidelines despite the recommendations from clinicians to do so and against some states’ requirements stipulating standards of care

A key issue raised by the case was the coverage for behavioral and substance use disorders as chronic, rather than acute, conditions. Thus, the plaintiffs argued, the guidelines limited coverage once a patient’s symptoms subsided and did not cover services needed to stabilize his or her condition over a longer term. Furthermore, the court noted that the 2008 Mental Health Parity and Addiction Equity Act requires coverage of depression or addiction no more restrictively than other medical conditions. And yet, in the court’s opinion, the administrator’s guidelines adopted appropriate standards of care for medical conditions but not for the mental health conditions.

Employers that sponsor healthcare coverage should review the implications of the case and discuss any concerns with their behavioral management administrators.

For additional information about the court’s ruling, please contact your Milliman consultant.

Regulatory roundup

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

General information letter correcting mistake contributions to HSAs released
The Internal Revenue Service (IRS) released a general information letter (2018-0033) correcting mistaken contributions to health savings accounts (HSAs). According to the letter, Notice 2008-59 does not specifically address other situations in which contributions to an employee’s HSA are the result of the employer’s or trustee’s administrative or process errors, but the notice also was not intended to provide an exclusive set of circumstances in which an employer may request the return of contributed amounts. Rather, if there is clear documentary evidence demonstrating that there was an administrative or process error, an employer may request that the financial institution return the amounts to the employer, with any correction putting the parties in the same position that they would have been in had the error not occurred. Employers should maintain documentation to support their assertions that mistaken contributions occurred.

To read the entire letter, click here.