Pharmacy

Pharmacy

Congress approves major health care proposals but the work is just beginning for CMS and stakeholders

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On August 7, 2022, the Senate passed the Inflation Reduction Act of 2022 (the IRA). The House approved the bill on August 12, and President Biden is expected to sign the IRA into law in the coming weeks.

The IRA addresses a range of policy topics across health care climate, energy, and taxation. Regarding health care, the IRA makes structural changes to the Medicare Part D prescription drug benefit and provides new authority for the Medicare program to address the pricing of prescription drugs in the Part B and Part D programs. The measure also extends the temporary enhanced assistance for health coverage purchased from Marketplaces, which was first approved in the American Rescue Plan Act (ARPA). In addition, the IRA updates vaccine coverage policies in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). 

While the IRA provides a critical framework for the structural changes to the nation’s largest public health insurance programs, the U.S. Department of Health and Human Services will be responsible for building out the policy and operational components necessary to support implementation.  

Notably, the Centers for Medicare and Medicaid Services (CMS) will lead implementation of the IRA’s Medicare and Marketplace provisions. The changes to the Part D benefit and the development of entirely new processes and policies to support the IRA’s drug pricing provisions require significant resources and consideration of direct as well as indirect impacts for the health care market. The agency can use a variety of regulatory tools to support implementation, including issuing standalone Requests for Information (RFIs), convening stakeholder engagement sessions, updating policy manuals, and undertaking notice and comment via the formal rulemaking process, among others.

CMS’ strategic plan emphasizes the value of stakeholder engagement, and this is likely to lead to multiple opportunities for public input, particularly as CMS implements the new Medicare provisions of the IRA. For example, the agency must develop the policy parameters for reforming the Part D benefit design and is likely to seek input from Medicare Advantage (MA) and MA Prescription Drug Plans (MA-PDPs), providers, vendors, and consumer advocacy groups among others to inform its approach. CMS will also need input from the stakeholder community as it establishes the timelines, reporting, and negotiating mechanisms impacting Part B and D prescription drugs pricing and how it will implement the inflation penalty policies outlined in the IRA.

The IRA’s extension of the American Rescue Plan Act’s (ARPA) enhanced eligibility for premium assistance through 2025 provides more near certainty around eligibility and enrollment for this market. This may led to renewed momentum for CMS to engage with states and stakeholders on Marketplace policies and structures.

Many of the details around how the IRA’s health care policies will be implemented are unknown at this time. Stakeholders will want to monitor CMS’ progress and provide feedback with data-informed analysis and concrete and practical recommendations as these opportunities are announced. 

An overview of many of the IRA’s health care provisions follows. Our team of experts can provide tailored analysis and support to clients as they begin to unpack the full breadth of the IRA’s policy changes and implications for Medicare Advantage and Part D plans, providers, vendors, consumer advocacy groups and other stakeholders.

  • Part B and Part D Drug Pricing. Requires the Secretary of HHS to select a list of drugs eligible for negotiation, and enter into agreements with select manufacturers, negotiating a “maximum fair price” (MFP) for each selected drug in the Medicare program. The Secretary is required to negotiate on a certain number of drugs per year, 10 drugs in 2026; 15 drugs in 2027 and 2028, and 20 drugs in 2029 and subsequent years.  The number of drugs negotiated will accumulate over the years, such that up to 60 drugs could be negotiated by 2029.  Manufacturers who are not in compliance will face an excise tax that could far exceed the cost of drugs sold over time and civil monetary penalties.
  • Prescription Drug Inflation Rebates. Requires manufacturers to pay rebates for Medicare Part B and D drugs with prices rising faster than inflation. The rebate calculation would be based on units and pricing in Medicare and would determine an inflation-adjusted payment amount based on the percentage by which the price exceeds the inflation benchmark, as determined by the Consumer Price Index for All Urban Consumers (CPI-U). If a manufacturer fails to pay the rebate, then they would be subject to a civil monetary penalty either equal to or at least 125 percent of the rebate amount for the quarter.
    • The Part D inflation rebate takes effect October 2022 for Part D drugs and biologics.
    • The Part B inflation rebate begins January 2023 for single-source drugs or biologics and certain biosimilar products. The IRA also includes an inflation growth cap on beneficiary coinsurance in Part B, beginning April 2023.
  • Part B Payment for Biosimilar Biological Products. Amends Medicare’s Average Sales Price (ASP) payment methodology in cases where the ASP during the first quarter of sales is unavailable to establish a payment rate for biosimilars. The IRA also updates Medicare Part B reimbursement for certain biosimilar products for a five-year period beginning on October 1, 2022, by increasing the add-on payment from six percent of the reference product’s ASP to eight percent of the reference product ASP.
  • Medicare Part D Assistance for Beneficiaries and Benefit Design. Increases the qualifying income amount (federal poverty level (FPL)) for the full Low-Income Subsidies (LIS) under Part D, from 135 percent of the FPL to 150 percent of the FPL, starting in 2024. The IRA also adjusts the cost-sharing requirements in the Part D benefit by:
    • Eliminating cost sharing in the catastrophic phase of the benefit in 2024;
    • Setting an annual out-of-pocket (OOP) limit for enrollees at $2,000 beginning in 2025;
    • Capping monthly premium increases for a prescription drug plan in 2024 through 2029 at six percent per year.  The Secretary may make a one-time adjustment to the beneficiary Part D premium contribution percentage in 2030 to ensure longer-term beneficiary premium reduction; and  
    • Adjusting the benefit coverage liabilities for the initial coverage phase and catastrophic coverage phase.
  • Coverage for Insulin. Requires Medicare to cover select insulin products and not apply a deductible or impose cost-sharing more than $35 or 25 percent of the negotiated price (including all discounts) for a 30-day supply. Beginning in July 2023, Medicare must exempt from beneficiary deductibles insulin provided through durable medical equipment (DME) and ensure that coinsurance for a month’s supply of insulin administered through DME does not exceed $35. High-deductible health plans (HDHPs) will be able to cover selected insulin products with no deductible without impacting their status as a HDHP, starting in 2023.
  • Medicare, Medicaid, and CHIP Coverage for Vaccines. Requires full coverage of Advisory Committee on Immunization Practices (ACIP)-recommended adult vaccines under Medicaid and CHIP without cost-sharing. The IRA also increases the Federal Medical Assistance Percentage (FMAP) by one percentage point, for adult medical assistance for such vaccines and their administration, during the first eight fiscal quarters on or after the date of the IRA’s enactment.
    • Requires Medicare Part D provide full coverage without cost sharing of ACIP-recommended adult vaccines for plan years beginning on or after January 1, 2023.
  • Enhanced Temporary Assistance for Marketplace Coverage. Extends the ARPA’s expansion of Advanced Premium Tax Credit (APTC) eligibility and amounts through 2025. ARPA modified the affordability percentages used for the calculation of APTC to increase subsidy amounts for individuals eligible for assistance.

Experts from HMA and HMA companies are supporting clients as they begin to strategize and formulate initial recommendations for federal agencies and plan for implementation.  We will continue to monitor developments in this area and provide additional updates as more information becomes available. 

Early bird registration discount expires July 11 for HMA conference on the future of publicly sponsored healthcare, October 10-11 in Chicago

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Be sure to register for HMA’s 2022 Conference by Monday, July 11, to get the special early bird rate of $1,695 per person. After July 11, the rate is $1,895.

Nearly 40 industry speakers, including health plan executives, state Medicaid directors, and providers, are confirmed for HMA’s The New Normal: How Medicaid, Medicare, and Other Publicly Sponsored Programs Are Shaping the Future of Healthcare in a Time of Crisis conference, October 10-11, at the Fairmont Chicago, Millennium Park.

In addition to keynote sessions featuring some of the nation’s top Medicaid and Medicaid executives, attendees can choose from multiple breakout and plenary sessions on behavioral health, dual eligibles, healthcare investing, technology-enabled integrated care, social determinants of health, eligibility redeterminations, staffing, senior care, and more.

There will also be a Pre-Conference Workshop on The Future of Payment Reform: Delivering Value, Managing Risk in Medicare and Medicaid, on Sunday, October 9.

Visit our website for complete details: https://conference.healthmanagement.com/ or contact Carl Mercurio. Group rates and sponsorships are available. The last HMA conference attracted 500 attendees.

State Medicaid Speakers to Date (In alphabetical order)

  • Cristen Bates, Interim Medicaid Director, CO Department of Healthcare Policy & Financing
  • Jacey Cooper, Medicaid Director, Chief Deputy Director, California Department of Health Care Services
  • Kody Kinsley, Secretary, North Carolina Department of Health and Human Services
  • Allison Matters Taylor, Medicaid Director, Indiana
  • Dave Richard, Deputy Secretary, North Carolina Medicaid
  • Debra Sanchez-Torres, Senior Advisor, Centers for Disease Control and Prevention
  • Jami Snyder, Director, Arizona Health Care Cost Containment System
  • Amanda Van Vleet, Associate Director, Innovation, NC Medicaid Strategy Office, North Carolina Department of Health & Human Services

Medicaid Managed Care Speakers to Date (In alphabetical order)

  • John Barger, National VP, Dual Eligible and Medicaid Programs, Humana, Inc.
  • Michael Brodsky, MD, Medical Director, Behavioral Health and Social Services, L.A. Care Health Plan
  • Aimee Dailey, President, Medicaid, Anthem, Inc.
  • Rebecca Engelman, EVP, Medicaid Markets, AmeriHealth Caritas
  • Brent Layton, President, COO, Centene Corporation
  • Andrew Martin, National Director of Business Development (Housing+Health), UnitedHealth Group
  • Kelly Munson, President, Aetna Medicaid
  • Thomas Rim, VP, Product Development, AmeriHealth Caritas
  • Timothy Spilker, CEO, UnitedHealthcare Community & State
  • Courtnay Thompson, Market President, Select Health of SC, an AmeriHealth Caritas Company
  • Ghita Worcester, SVP, Public Affairs & Chief Marketing Officer, UCare
  • Mary Zavala, Director, Enhanced Care Management, L.A. Care Health Plan

Provider Speakers to Date (In alphabetical order)

  • Daniel Elliott, MD, Medical Director, Christiana Care Quality Partners, eBrightHealth ACO, ChristianaCare Health System
  • Taylor Nichols, Director of Social Services, Los Angeles Christian Health Centers
  • Abby Riddle, President, Florida Complete Care; SVP, Medicare Operations, Independent Living Systems
  • David Rogers, President, Independent Living Systems
  • Mark Sasvary, Chief Clinical Officer, CBHS, IPA, LLC
  • Jim Sinkoff, Deputy Executive Officer, CFO, SunRiver Health
  • Tim Skeen, Senior Corporate VP, CIO, Sentara Healthcare
  • Efrain Talamantes, SVP & COO, Health Services, AltaMed Health Services Corporation

Featured Speakers to Date (In alphabetical order)

  • Drew Altman, President and CEO, Kaiser Family Foundation
  • Cindy Cota, Director of Managed Medicaid Growth and Innovation, Volunteers of America
  • Jesse Hunter, Operating Partner, Welsh, Carson, Anderson & Stowe
  • Bryant Hutson, VP, Business Development, MedArrive
  • Martin Lupinetti, President, CEO, HealthShare Exchange (HSX)
  • Todd Rogow, President, CEO, Healthix
  • Joshua Traylor, Senior Director, Health Care Transformation Task Force
  • James Whittenburg, CEO, TenderHeart Health Outcomes
  • Shannon Wilson, VP, Population Health & Health Equity, Priority Health; Executive Director, Total Health Care Foundation

Oklahoma to transition to Medicaid Managed Care

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This week, our In Focus section reviews a new Oklahoma law to implement Medicaid managed care by October 1, 2023. The law, signed by Governor Kevin Stitt on May 26, 2022, requires the state to issue a request for proposals and to award at least three Medicaid managed care contracts to health plans or provider-led entities like accountable care organizations.

Provider-led entities would receive preferential treatment, with at least one targeted to receive a contract. However, if no provider-led entity submits a response, the state will not be required to contract with one.

Goals of the legislation include:

  • Improve health outcomes for Medicaid members and the state as a whole;
  • Ensure budget predictability through shared risk and accountability;
  • Ensure access to care, quality measures, and member satisfaction;
  • Ensure efficient and cost-effective administrative systems and structures; and
  • Ensure a sustainable delivery system that is a provider-led effort and that is operated and managed by providers to the maximum extent possible.

Plans would provide physical health, behavioral health, and prescription drug services. Covered beneficiaries would include traditional Medicaid members and the state’s voter-approved expansion population, but not the aged, blind, and disabled population eligible for SoonerCare.

Plans will need to contract with at least one local Oklahoma provider organization for a model of care containing care coordination, care management, utilization management, disease management, network management, or another model of care as approved by OHCA.

Oklahoma will also issue separate RFPs for a Medicaid dental benefit manager plan and a Children’s Specialty plan.

Background

Oklahoma currently does not have a fully capitated, risk-based Medicaid managed care program. The majority of the state’s more than 1.2 million Medicaid members are in SoonerCare Choice, a Primary Care Case Management (PCCM) program in which each member has a medical home. Other programs include SoonerCare Traditional (Medicaid fee-for-service), SoonerPlan (a limited benefit family planning program), and Insure Oklahoma (a premium assistance program for low-income people whose employers offer health insurance). Prior efforts to transition to Medicaid managed care have encountered roadblocks, starting in 2017 with a failed attempt to move aged, blind, and disabled members to managed care.

More recently, in June 2021, the Oklahoma Supreme Court struck down a planned transition of the state’s traditional Medicaid program to managed care, ruling that the Oklahoma Health Care Authority does not have the authority to implement the program without legislative approval.

Contracts had been awarded to Blue Cross Blue Shield of Oklahoma, Humana, Centene/Oklahoma Complete Health, and UnitedHealthcare. Centene/Oklahoma Complete Health also won an award for the SoonerSelect Specialty Children’s Health Plan program, covering foster children, juvenile justice-involved individuals, and children either in foster care or receiving adoption assistance.

Link to Senate Bill 1337

HMA Announces Cancellation of 2020 Annual Conference

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Health Management Associates has made the decision to cancel its October 2020 conference on Trends in Publicly Sponsored Healthcare, given continuing developments concerning COVID-19 and out of an abundance of caution for the safety of attendees, speakers, and staff. Full refunds will be made to registered attendees and sponsors.

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Early Bird Registration Expires July 29 for HMA Conference, October 26-27 in Chicago

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Be sure to register soon for HMA’s conference on What’s Next for Medicaid, Medicare, and Publicly Sponsored Healthcare: How Payers, Providers, and States Are Navigating a Future of Opportunity and Uncertainty, October 26-27, at the Fairmont Chicago, Millennium Park. The Early Bird registration rate of $1595 per person expires on July 29.  After that, the rate is $1795.

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HMA Conference on Trends in Publicly Sponsored Healthcare

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HMA Conference 2020

What’s Next for Medicaid, Medicare, and Publicly Sponsored Healthcare:
How Payers, Providers, and States Are Navigating a Future of Opportunity and Uncertainty

Pre-Conference Workshop: October 25
Conference: October 26-27
Location: Fairmont Chicago, Millennium Park

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50-State Survey of Medicaid Pharmacy Directors

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This week, our In Focus section reviews key takeaways from the report, How State Medicaid Programs are Managing Prescription Drug Costs: Results from a State Medicaid Pharmacy Survey for State Fiscal Years 2019 and 2020, prepared by Kaiser Family Foundation (KFF) and Health Management Associates (HMA). The report was written by HMA Managing Principal Anne Winter and Principals Kathleen Gifford and Linda Wiant with Rachel Dolan, Marina Tian, and Rachel Garfield from KFF.

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Highlights from this Week’s HMA Conference on The Next Wave of Medicaid Growth and Opportunity

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This week, our In Focus section provides a recap of the fourth annual HMA Conference, The Next Wave of Medicaid Growth and Opportunity: How Payers, Providers, and States are Positioning Themselves for Success, held this Monday, September 9, and Tuesday, September 10, in Chicago, Illinois. Nearly 500 leading executives representing managed care organizations, providers, state and federal government, community-based organizations, and other stakeholders in the health care field gathered to address the challenges and opportunities for organizations serving Medicaid and other vulnerable populations. Conference participants heard from keynote speakers, engaged in panel discussions, and connected during informal networking opportunities. Below is a summary of highlights from this year’s conference.

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HMA Conference to Feature Insights from 40+ Speakers, Including Health Plan CEOs, State Medicaid Directors, Providers

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Pre-Conference Workshop: September 8, 2019
Conference: September 9-10, 2019
Location: Chicago Marriott Downtown Magnificent Mile

Health Management Associates is proud to announce its fourth annual conference on trends in publicly sponsored health care: The Next Wave of Medicaid Growth and Opportunity: How Payers, Providers, and States Are Positioning Themselves for Success.

The HMA conference has emerged as a premier informational and networking event, attracting more than 450 executives and policy experts. Speakers this year include state Medicaid directors and leaders from Medicaid managed care, hospitals, clinics, community-based organizations, and other providers.

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