This Week in Health Care Reform: August 21st, 2020

A recent study shows Medicare Part D encouraging the use of generic drugs; Medicaid enrollment going up, but not just because of the newly uninsured; a new alternative payment model is introduced for rural health; and, experts look at what the coronavirus has taught us.

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Week in Review

Medicare Part D: Prescription drug prices continue to exert tremendous upward pressure on the larger health care cost curve.  As stakeholders look for ways to bend that curve towards greater affordability for consumers and taxpayers, a recent analysis examined how Medicare Part D plans actually design their formularies to encourage the use of generics over brand-name drugs, despite criticism to the contrary.  According to researchers, of the more than 4.1 million Part D plan and product combinations analyzed, in 84 percent of cases, only the generic was covered.  In 15 percent of cases, plans covered both the brand-name drug and its generic equivalent.  This contradicts attacks that have been leveled against Part D plans by critics, with the study’s authors going on to say that the “preferential tiering of brand-name products and the exclusion of generics is not widespread in Part D plans” and that any “policy-making designed to address this relatively infrequent coverage pattern may be unlikely to yield significant savings.”

Medicaid Enrollment: As could have been predicted, enrollment in the Medicaid program has increased in the wake of COVID-19.  But, while that uptick has reversed what had been a three-year decline in enrollment, analysts point out that that increase isn’t strictly the result of the recession triggered by the coronavirus.  In fact, that growth has largely been driven by states having paused their eligibility redetermination processes during the public health crisis.  In other words, because the maintenance of effort requirements have been suspended, states have been unable to disenroll beneficiaries during the pandemic.  Experts also believe that newly-eligible enrollees are tending to more immediate needs before securing coverage.  Additionally, some employers have resorted to furloughing employees, rather than layoffs, in order to allow their workers to keep their health benefits.  And, the lag in new Medicaid enrollees could simply be because many just don’t know that the program is an option.

Rural Health Pilot: As communities across the country continue to reel under the twin pressures of COVID-19 and the subsequent economic fallout, perhaps nowhere has this been more acutely felt than in rural communities.  In particular, patients in these locations have been left increasingly vulnerable as worsening economic conditions have deteriorated further, eroding the vital health care infrastructure serving these populations.  However, a new pilot program announced last week by the Centers for Medicare & Medicaid Services (CMS) seeks to inject some much-needed investments into these communities, with the goal of revitalizing the rural health care system.  Specifically, the Community Health Access and Rural Transformation (CHART) program will provide $75 million in upfront funding to 15 rural communities to transform their care delivery models.  Beginning next summer, CMS’ CHART program is essentially an alternative payment model pilot enabling rural providers to change how they pay for and deliver care to Medicare beneficiaries.  It also provides them with operational and regulatory relief, in addition to technical and educational support.  On a separate but related track, CMS will also target an Accountable Care Organization Transformation program for launch in January 2022.

Post-COVID: While we’re still grappling with our larger response to the coronavirus, health care experts have already begun to mine those efforts for lessons that can be used to improve our system, post-pandemic.  For instance, with COVID-19 affecting so many older Americans, the need for more geriatricians has become a pressing priority.  As has the important role that telehealth will play going forward and, thusly, the urgency of ensuring that its utilization remains unencumbered by regulatory barriers.  Reimbursement has also been put under the microscope, with experts making the connection between our coronavirus response and how to improve value-based payments.  And, the provider community has been forced to take a hard look at a potential payment overhaul as a result of the pandemic disruption.


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