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This Week in Health Care Reform - March 4th, 2016

A just-released analysis adds renewed urgency to the ongoing fight to protect Medicare Advantage; a new report tracks the trajectory of drug prices; and, telehealth continues to gain traction.


Week in Review

Medicare Advantage: A new analysis details the impact that the latest round of proposed changes from the Centers for Medicare & Medicaid Services (CMS) would have on the popular Medicare Advantage program and its millions of vulnerable beneficiaries.  Released yesterday by management consulting firm Oliver Wyman, their report establishes that, when combined with the continued phase-in of other legislative and regulatory cuts, as well as the significant cuts exacted on the program in recent years, this year’s proposed changes could result in a high degree of disruption in the Medicare Advantage market, including the potential for plan exits, reductions in service areas, fewer benefits, provider network changes, and plan disenrollment.  With 17 million American seniors and persons with disabilities enrolled in Medicare Advantage plans, it’s hard to argue that these impacts wouldn’t be both devastating and far-reaching.  According to the report, if finalized next month, these changes would result in average cuts of as much as 3.9 percent to Medicare Advantage payments, only exacerbating the complexity, uncertainty, and unpredictability that have been annually introduced into the program.  Of particular worry, the proposed adoption of new revisions to the risk adjustment model for dual eligible beneficiaries (those on Medicare and Medicaid) and individuals with disabilities.  Oliver Wyman estimates that the implementation of this revised model would reduce program funding by 2.1 percent, severely undermining plans’ efforts to improve these beneficiaries’ health, brought about by their express ability to focus on early detection and the prevention of chronic conditions for some of the neediest and most vulnerable patient populations in Medicare Advantage.  Having recognized the threat posed by CMS’ latest round of funding changes, stakeholders across the health care spectrum have rallied to the program’s defense.  We need our Health Action Network members to add their support to these efforts by asking your lawmakers to urge CMS to protect Medicare Advantage and its millions of beneficiaries from further disruption and harmful cuts.  Act now!

Rx Price Trajectory:
According to a new study conducted by AARP, the average cost for a year’s supply of a prescription drug doubled in just seven years to over $11,000.  Their analysis, released earlier this week, discovered that this trend, observed since 2007, has been driven by drug manufacturer price hikes, and is likely to continue.  Given the impact of high-cost drugs on the health care system writ large, some in the industry have begun to explore ways of expanding access to potentially life-saving medicines, with an eye on affordability, such as the recent value-based proposals offered up jointly by Eli Lilly and Anthem.  With calls for greater transparency in drug pricing determinations also gaining steam, the criticality of finding lasting, agreeable solutions continues to fuel the conversation.

Telehealth Support:
It’s becoming more and more difficult to deny telehealth’s utility in the delivery of health care in this modern, connected age we live in.  What’s harder to acknowledge, though, is how soon we’ll be able to count on its ubiquity as stakeholders continue to grapple with its wider-spread application.  Nevertheless, providers and payers soldier on, buoyed by the indicators that point to a brightening future for telehealth.  With forces marshaling to drive expansion, there’s every reason to believe that the trends we’ve already seen will only continue to transform the health care industry for the better.  For instance, employers report growing comfort with telehealth, such that estimates predict that 80 percent of them will be offering some form of telehealth benefit by 2018.  And, recent proposals by a Senate Finance Committee workgroup organized around addressing chronic care needs called for the expansion of telehealth to treat patients with chronic illnesses.

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