This Week in Health Care Reform - January 29th, 2016
Joint policy position papers from different corners of the high-priced drug discussion offer the first cautious steps towards an improved dialogue; a new independent study shows that plans are underpaid for taking on the chronically ill; and, the GOP comes together on a way forward for health care reform.
Week in Review
Rx Bedfellows: That the growing turbulence caused by rising prescription drug prices continues to draw comments from every corner of the health care spectrum is hardly newsworthy. But, when two of those voices, traditionally representing opposing sides of the debate, come together to offer up a shared perspective on a way out of this morass, it’s worth noting. That’s exactly what happened today when Eli Lilly, a pharmaceutical manufacturer, and Anthem, a health insurer, released a pair of joint policy position papers in a first-of-its-kind pairing, bringing the accumulated weight of both company’s diverse experiences to an issue of pressing importance to our health care system. Co-authoring a blog post published in Health Affairs this morning, leaders from the two organizations put forth their recommendations for much-needed first steps on the path towards sustainability (and rationality) in the prescription drug pricing discussion. Specifically, the authors frame the issue as one of drug payments being held hostage to a 20th century framework that focuses solely on price. Their solution would focus, instead, on removing regulatory barriers to encourage enhanced value-based payment arrangements, while also improving pre-approval communications of new drugs to allow all stakeholders the opportunity to influence pricing determinations in accordance with budget realities. While modest in scope, and in no ways a panacea for the ills that have befallen our system owing to runaway drug prices, the common ground – and common sense – approach put forth by two companies from very different corners of the debate, serves to nudge the conversation in a more positive direction.
MA Risk Adjustment Payments: Last week, a new report was released showing how dramatically the government is underpaying Medicare Advantage plans for the costs of treating beneficiaries with chronic conditions. The analysis, performed by health consulting firm Avalere and funded by America’s Health Insurance Plans (AHIP), found that the risk adjustment model used by CMS is woefully antiquated and not reflective of the true costs associated with providing care to these patients. In fact, by continuing to employ the existing model, the risk adjustment program is “inadvertently penalizing the plans that are taking on the sickest patients.” While CMS has shown a willingness to tweak the risk adjustment model, annual changes to the underlying payment structure of the Medicare Advantage program have only served to exacerbate the issue, further exposing this vulnerable population to potential, unnecessary harm. As the study authors go on to say, “Payment accuracy in Medicare Advantage is critical so that the appropriate incentives exist for plans to treat the chronically ill. Ensuring adequate payment levels encourages broader program participation and robust coverage options for seniors.” With CMS expected to release its annual proposed changes to the program next month, now’s the time to learn more about how you can help protect Medicare Advantage and the millions of seniors and persons with disabilities who depend on the program for their care.
GOP Core Consensus: As mentioned in last week’s newsletter, Congressional Republicans held a legislative retreat in Baltimore earlier this month hoping to build consensus around their priorities heading into 2016. While agreement was reached on several policy fronts, none was likely as hard to come by as the unified goal of coming up with an alternative to the Affordable Care Act. However, with so much of the law having now been implemented and reshaped the contours of health care in this country, out-and-out repeal no longer seems workable. With that in mind, Republicans have determined that they will, instead, adopt a piecemeal approach to health care reform, selecting different pieces of previous GOP proposals to put forth, rather than launching a comprehensive attack at the health care law.
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