Proposed Rule Change Would Make U.S. Healthcare System Even More Complicated and Potentially More Costly

November 01, 2023
1:27 pm

The last thing the U.S. healthcare system needs is more paperwork. Unfortunately, the federal Centers for Medicare & Medicaid Services (CMS) is proposing a policy change that would assign more “busy work” to key players across the health sector.

The proposal specifically targets Medicaid, the government program that provides health care for millions of low-income Americans and people with disabilities.

Back in 1990, Congress passed legislation requiring drug makers to pay rebates to Medicaid in exchange for their medicines being covered by the program. For brand drugs, these rebates are set at either 23.1% of a drug’s average manufacturer price (AMP), or the difference between the AMP and the “best price” available to any public or private entity purchasing the drug.The best price requirement has worked well for over three decades, saving taxpayers money while preserving access for patients in need. Manufacturers, clinics, insurers, pharmacies, and others have grown to rely on it.

Yet, CMS’s proposal would completely upend this system. The agency seeks to redefine a drug’s best price as the net price of the combined total of rebates associated with that drug across the entire pharmaceutical supply chain.

Imagine for a given drug, the manufacturer offers a 30% rebate to private insurers, a 10% rebate to pharmacies, and a 10% rebate to community clinics. Under existing rules, the manufacturer would have to offer the highest discount of the three — 30% — to Medicaid. But under the proposed formula, all of the rebates are added together — resulting in a 50% rebate.

This practice of rebate “stacking” is problematic for a few reasons.

First, it’s impractical. The modern U.S. healthcare system is incredibly complex. To comply with the new rule, entities across the drug supply chain — including wholesalers, distributors, pharmacies, hospitals, clinics, and insurers — would have to create complicated new databases and coordinate with each other to meticulously track drug transactions down to the last cent. This would divert finite resources away from where the focus should be: treating patients.

Second, rebate stacking could indirectly lead to higher costs. If the proposal is finalized, any rebate a manufacturer offers to a public or private entity would factor into Medicaid’s best price calculations. Such a system would encourage drug makers to dole out discounts more sparingly than they currently do.

We all share the goal of reducing costs and improving quality across the healthcare system. But CMS’s proposed overhaul of the best-price requirement would be a step in the opposite direction.

The CBO Report and Lessons for CMMI’s Future

October 18, 2023
12:04 pm

After over a decade of projecting that the models initiated by the Center for Medicare and Medicaid Innovation (CMMI) would reduce Medicare spending, eyebrows were raised in health policy circles when the Congressional Budget Office (CBO) issued a recent report estimating that in its first decade of operation, CMMI’s efforts had actually elevated federal spending by $5.4 billion between 2011 and 2020. CBO initially estimated that the agency’s work would result in a net spending decrease of nearly $3 billion over the 2011 through 2020 budget window. Over the 2021 through 2030 budget window, CBO had previously projected that CMMI models would reduce federal spending by $77.5 billion. CBO’s revised estimates now project that CMMI models will increase federal spending by $1.3 billion from 2021 through 2030. There are a couple of important takeaways from this report that can enhance CMMI’s work and lead to more successes moving forward.

First, we’ve already witnessed that CMMI can have its greatest impact in helping to transition the healthcare system from its traditional fee-for-service orientation to a value-based framework. Continuing this progress will lead to greater cost-efficiency within the system, while attaining positive patient outcomes, enhancing equity, and without undermining healthcare quality. In the years to come, this is where CMMI should focus the lion’s share of its work, developing sustainable models that will achieve meaningful savings through patient-centered coordinated care and that have bipartisan support.

And, second, it is critical to get health provider participation in innovative payment and delivery models. CBO also notes that CMMI “might achieve larger net budgetary savings in its second decade by drawing on the lessons from past models when designing new ones.” We must ensure that providers’ incentives to participate in the models are not outweighed by burdens of operating under the model. When new models create onerous burdens on those organizations that might otherwise want to engage, the result is lack of participation. As CBO pointed out in its report, there have been instances in which CMMI models have created inconsistent and even contradictory mandates for providers to follow, creating unnecessary paperwork and expense. Listening to health providers, being responsive to their concerns and ideas, and incentivizing them to participate in new demonstration projects is critical in CMMI’s second decade. Mandatory participation models may seem appealing (although MedPAC has noted some of the limitations and lack of evidence), but it would be better if we are to see savings to create models that are appealing to providers and their patients.

Providers with more value-based care arrangements fared better during the pandemic than those relying on fee-for-service volume-based arrangements. Legislation that helps focus CMMI’s mission on driving toward value-based care should be considered as a way to improve CMMI’s success as opposed to tying it’s hands.

The Health Industry’s Progress Toward Equity and Eliminating Disparities: A Look at Healthcare Distributors and Group Purchasing Organizations

October 12, 2023
11:17 am

Addressing health equity and eliminating disparities in healthcare delivery and access continues to be a major priority for every sector of the healthcare industry. Throughout the year, this platform has been examining how leaders within these different sectors – members of the Healthcare Leadership Council (HLC) – have been crafting and implementing innovative approaches to make healthcare more accessible and quality-driven for all Americans and to improve health outcomes.

Today, in this space, we’re going to spotlight what the nation’s leading healthcare distributors and group purchasing organizations are doing to address health disparities. It is important to note that, in the interests of space, we are providing just a brief summary of a selection of actions these companies are taking, not the entirety of their extensive efforts.

AmerisourceBergen’s Cencora Foundation has a mission to improve the health and well-being of patient populations by partnering with organizations to expand access to healthcare around the world. To advance access to care in underserved communities, the foundation is partnering with organizations that are already embedded in those communities. Cencora focuses on partnering with organizations that are committed to diversity, equity and inclusion in the work they do. In fiscal year 2022, Cencora provided over $6.3 million in donations focusing on three areas – human health, animal health and prescription drug safety.

The company has worked to advance equity in other ways, such as hosting a first-ever Disparities in Cancer Care Summit, bringing together healthcare industry executives, community oncology provider and patient care advocates to address topics such as the use of personalized medicine in addressing health equity, community oncology’s role in bring down barriers to cancer care, payer perspectives on diversity, equity and inclusion in cancer treatment, and the use of digital tools to deliver equitable care across diverse patient populations.

At Cardinal Health, the company’s Sonexus Access and Patient Support program develops tailored solutions to help patients get on, and stay on, prescription medication therapies. The business offers patient assistance programs for uninsured and underinsured patients and provides services that assist patients who are waiting for a response from their insurance companies to get time-sensitive medications. In fiscal year 2023, these patient assistance programs dispersed more than 1,650 medication shipments a day totaling more than $5.1 billion in free medicines.

And, Cardinal Health’s social determinants of health screening service, Outcomes, helps pharmacists identify high-need areas among their patients and links them with local resources to help resolve gaps. In a two-month pilot of the Outcomes screening service, pharmacists in 2,100 retail pharmacies screened more than 9,800 patients and those patients showed an average of $1,500 in decreased medical spending compared to patients who didn’t participate in the screening.

McKesson is playing a critical role in diversifying the healthcare talent pipeline beginning with pharmacists. The McKesson Foundation is donating more than $4 million in grants over the next five years to pharmacy schools at Hampton University, University of Michigan, University of Minnesota, University of North Carolina at Chapel Hill and University of New Mexico. These grants aim to boost the number of pharmacy students from diverse backgrounds and enhance the cultural competency of all pharmacy students. Advancing this diversity is important because patients report that having a healthcare provider of similar race or ethnic background is important to them and studies show this patient-provider concordance can improve health outcomes.

McKesson is also using its subject matter expertise and technology to better understand and mitigate some of the hurdles that patients face in enrolling and participating in clinical oncology trials. To help reduce health disparities and enhance trial representation, McKesson is advancing economic opportunities to foster trial participation for individuals from all backgrounds.

Premier, Inc.’s PINC AI Applied Sciences and Premier’s Strategic Collaborative teams are working with CaringWays, a private carefunding platform to advance health equity. Among other activities, the partnership is leveraging standardized and connected data analytics and a cross-functional stakeholder forum to identify priority patient populations. They are also designing ad conducting critical research projects to help test and pilot interventions focused on factors that contribute to health inequities including mental health, maternal and infant health, impact of cancer care, neurodegenerative conditions and social drivers of health. The partnership will focus on standardizing social determinants data collections, enhancing patient-specific social needs data, and creating a Health Equity index for use in hospitals and health systems across the nation aimed at supporting peer-to-peer benchmarking, improving care for populations that have been historically marginalized and guiding advocacy efforts that can impact legislative policies.

Vizient, Inc. has taken a bold step to strengthen the ability of hospitals and health systems to meet the needs of underserved populations and communities. The company launched the patent pending Vizient® Vulnerability Index™ that provides a unique level of visibility for healthcare organizations to assess social drivers of health that impact health equity in the communities they serve. The Vizient Vulnerability Index aggregates 43 social determinants of health data points into nine categories at the local, regional and national levels that impact health outcomes. Each category of data quantifies how specific vulnerabilities impact specific populations. Unlike other indices, the Vizient Vulnerability Index flexes to ensure the index values are location-appropriate. This allows for variation in the weighting of the domains across different geographic areas depending on what’s important.

With public access to the Vizient Vulnerability Index at no cost, providers can see beyond their walls, gain a deeper understanding of their neighborhoods, and begin to transform the health of their communities before a patient walks through the door.

The Health Industry’s Progress Toward Equity and Eliminating Disparities: A Look at Health Plans

August 16, 2023
10:50 am

Throughout the year, this site has been exploring how leaders within various sectors of the healthcare industry – members of the Healthcare Leadership Council (HLC) – have been taking bold steps to advance equity and eliminate health and healthcare disparities in this country.

The pursuit of equity is an important priority for HLC and its member companies. We fervently believe that the United States has the world’s best, most innovative healthcare, but it is critical that the lives of all of our citizens regardless of race, ethnicity, place of residence and other socioeconomic factors are strengthened by accessible, affordable, high-quality care.

Today in this space, we’re going to take a look at what some of the nation’s leading health coverage providers are doing to address health disparities. It is important to note that, in the interests of space, we are providing just a brief summary of some of the actions these companies are taking, not the entirety of their considerable efforts.

Blue Cross and Blue Shield of North Carolina, commonly referred to as Blue Cross NC, is investing in data to learn more about the health challenges of its members and sharing that information across the healthcare system. Blue Cross NC is aligning its member race/ethnicity data with the federal Office of Management and Budget and the Office of Minority Health and will do the same regarding sexual orientation and gender identity once standards are established at the federal level. And in its interactions with providers, vendors and other organizations, Blue Cross NC is encouraging standardization in data exchange.

Other equity priorities for Blue Cross NC including using technology and stakeholder relationships to reduce bias and racial disparities in maternal and child care, working with behavioral health providers to increase diverse representation and their presence in underserved communities, and engaging people across North Carolina in actionable conversations about healthcare affordability and coverage.

Blue Cross NC is also partnering with health systems and other providers groups to pilot approaches developing key equity measures and is tying value-based care to closing health disparities in its contracting with providers and vendors.

CVS Health engages in cross-enterprise initiatives to advance health equity, with a focus on disparities in heart health, mental health, and women’s health. The company advances its health equity strategy by providing training and learning opportunities to accelerate its ability to help every customer, member and patient it serves achieve optimal health, and it uses data analytics to identify inequities and to take action in addressing them. They work to embed health equity principles and practices across the organization through the use of a business unit assessment tool that assesses and then drives intentional action steps to advance health equity within distinct business units.

Aetna, a CVS Health company, helps ensure all Medicaid and Medicare members have an opportunity to be as healthy as possible by coordinating care and providing access to health care providers and quality services in local communities. Aetna’s Medicare Multicultural Initiative improves blood pressure control and depression screenings and care for Medicare members through culturally responsive care management, provider education and engagement.

Aetna’s Medicaid Better Together Social Impact Solutions helps ensure Medicaid members are directly connected to high quality services right in their local communities, and helps providers identify ways to support patients most in need and fill community-level social care gaps.

CVS Caremark is investing in programs that address barriers to care to alleviate inequities for historically marginalized communities. It focuses on three conditions that disproportionately affect people of color – sickle cell disease, HIV and heart disease.

Elevance Health is dedicated to advancing health equity, committing itself to what it calls “health equity by design.” It’s a personalized and intentional approach to ensure that all people, regardless of race or ethnicity, sexual orientation, gender identity, and geographic or financial access can receive individualized care. Elevance has comprehensive long-term goals to broadly advance health equity, such as ensuring that people with disabilities and rural residents can find accessible care. Additionally, in the near term, Elevance is prioritizing three areas to drive immediate progress: maternal health, behavioral health, and access to evidence-based medical therapy.

Also, Elevance is continuing to work with HHS and its affiliated trade associations on policy recommendations to align data collection and interoperability standards. Through its foundation’s financial commitments, it is continuing to strengthen, deepen and diversity its community-based organization partnerships. And Elevance is enhancing partnerships with care providers to advance health equity through a heightened focus on provider incentives, education and value-based purchasing incentives.

Elevance is integrating health equity into its business processes and priorities, and will convene cross-sector leaders, establish partnerships, and exchange best practices in addressing health and healthcare inequities.

A Multisectoral Approach to Patient-Centered Care

August 08, 2023
12:22 pm

The Healthcare Leadership Council (HLC) hosted a webinar focused on how various healthcare organizations have approached value-based care and the outcomes associated with those methods. While, historically, providers have been financially compensated for the volume of services they provide, it has been increasingly recognized that a holistic view of patients’ health includes additional lifestyle factors and results in a healthier population while reducing the cost of care. The panel consisted of four expert representatives from HLC’s membership.

Dr. Adam Solomon, chief medical officer of MemorialCare Medical Foundation, compared traditional fee-for-service (FFS) care to different types of accountable care organizations (ACOs), highlighting the notable difference in relationships between services and payments, as well as outcomes. Lack of coordinated care in a FFS system leads to a separation of clinical data, pharmacy data and claims data, whereas ACOs enable the communication necessary to provide a coherent record of the patient’s medical history. Dr. Solomon mentioned the importance of incentivizing innovative alternative payment models outside of Medicare, and also stated that Congress and CMS should continue to support the migration from Medicare FFS to value-based Medicare Advantage to ensure seniors have access to coordinated care, which improves both patient experience and outcomes.

Dr. Justin Barclay, vice president of consumer insights and analytics at Tivity Health, discussed how his organization partnered with HLC on a study of care coordination perceptions among FFS enrollees, using a nationally representative sample of seniors aged 65 and over who are enrolled in FFS Medicare coverage. Some key takeaways from this study include: seniors in FFS Medicare agree that care coordination leads to better healthcare decisions and increases access to quality healthcare; despite high awareness, only four in ten seniors have experienced care coordination; and seniors who have experienced care coordination place greater trust in their primary care physicians, specialists, pharmacists and health plans over social media and traditional news media. Dr. Barclay recommended further research to examine the differences in experienced care among underserved populations.

Dr. Mark Montoney, chief medical officer of Wellvana, explained the burnout experienced by primary care providers stemming from the burden of administrative tasks and poor work-life balance, while receiving less reimbursement for services than other types of providers. Addressing this dilemma, Wellvana manages three ACOs across 22 states, which provide support to providers in areas such as coding, care management and patient education. Dr. Montoney described how care constantly improves in this environment because ACOs cannot succeed unless patients and providers win first, and better care coordination results in shared savings for the care team through improved outcomes. He shared that ACOs have generated over $17 billion in gross savings for Medicare over the last decade and patients have received elevated care between visits.

Dr. Hirsh Sandesara, the lead medical director for value-based provider engagement at Blue Cross NC, described his organization’s efforts to rapidly build a network of ACOs across the state in order to balance rewards for better health outcomes and lower cost of care rather than incentivizing a greater volume of services. This transition has led to a significant and sustainable long-term impact on quality and affordability. The data for the 1.4 million members has shown increased screening for colorectal cancer, improved management of high blood pressure and a reduction in hospital readmissions. These improvements in quality have translated into reduced healthcare costs, with a cumulative of nearly $500 million in savings since 2019, and over $300 million going back to providers as incentives for maintaining the health of their patients. Blue Cross NC is committed to bringing payers and providers to the same table to collaborate most effectively toward a patient-centric system.