Last Week in Healthcare Reform: August 16th, 2021

Lawmakers target the suspension of an expensive, yet-to-be-implemented rule to pay for other priorities; Medicare Advantage continues to affirm its value proposition, including an increased focus on health-related social needs; and, stakeholders warn against the harms of arbitration ahead of new rules targeting surprise medical bills being released.

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Item of the Week

Week in Review

Rebate Rule Suspension: Last week, Senate lawmakers passed a $1 trillion bipartisan infrastructure package.  The legislation includes funding for a broad range of projects, including improving roads, increasing broadband access, and other critical areas of infrastructure.  The package is paid for in part by the delay of the controversial rebate rule, which targets the rebates that pharmacy benefit managers (PBMs) are able to extract from pharmaceutical manufacturers in their negotiations on behalf of consumers, employers, and government programs, such as Medicare Part D.  Stakeholders were quick to commend the move by lawmakers, pointing out that the full repeal of the rebate rule would do even more to protect American seniors from rising premiums and taxpayers from additional costs.

MA Value: The Medicare Advantage program (MA) now serves 42 percent of all Medicare beneficiaries.  Given the broad range of services MA provides, all underpinned by the program’s enhanced focus on delivering better service, better access, and better value, it’s no surprise that a growing number of Americans not only have gravitated to MA, but that the vast majority of them also report high levels of satisfaction.  While some skeptics are reluctant to allow for strict apples-to-apples comparisons between MA and traditional Medicare fee-for-service, evidence continues to mount, showing that Medicare Advantage does, in fact, result in improved health outcomes for enrollees.  It’s this value proposition that has prompted stakeholders to make greater investments in the MA space, as they look to expand the reach of the program across the country.

MA and Social Needs: Against that backdrop, while Medicare Advantage plans have distinguished themselves from Medicare fee-for-service in a variety of ways, perhaps there’s no more timely example of how this translates into value for beneficiaries than the program’s focus on health-related social needs, otherwise referred to as social determinants of health.  In fact, according to a new report the number of MA plans offering benefits specifically targeting health-related social needs has tripled since last year.  However, despite this increased focus, tracking this critical data continues to be a challenge for these plans, presenting unexpected barriers to interventions.

IDR: With new rules aimed at addressing surprise medical bills forthcoming, stakeholders are urging lawmakers to protect consumers from any loopholes that providers or private equity firms might use to continue to drive up healthcare costs.  Specifically, they’re reinforcing the importance of not allowing independent dispute resolution (IDR) to become the standard through which payments for out-of-network healthcare services are determined, citing examples from the states illustrating how out-of-network providers and private equity interests have exploited IDR to jack up reimbursement – often at much higher levels than the actual cost of that care in local markets, further driving up healthcare costs for consumers.

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