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This Week in Health Care Reform - April 3rd, 2015

The annual push to preserve Medicare Advantage enters its final week; concern mounts as expensive blockbuster drugs fill the pipeline; and, a fundamental shift is underway in the delivery of health care.


Week in Review

Medicare Advantage: Last month, the Centers for Medicare & Medicaid Services (CMS) proposed its annual changes to how the popular and effective Medicare Advantage program is administered and funded.  While, on the surface, the cuts to the program didn’t seem too drastic, further analysis painted a far more worrying picture.  On a broader level, when combined with other cuts imposed on the program in recent years, expert analysis estimates that some Medicare Advantage beneficiaries will be facing higher costs and reduced benefits of as much as $120 per month.  More specifically, though, a new study into the proposed changes to the program’s Risk Adjustment model – which incentivizes plans to design benefit packages that cater to the highest need patients – shows a significant impact to individuals with Chronic Kidney Disease (CKD).  In a report released by Oliver Wyman, their analysis indicates that the proposed changes to Medicare Advantage’s Risk Adjustment model could lead to a 23 percent reduction in plan payments for CKD patients.  Ultimately, the cuts would mean lower reimbursement for Medicare Advantage plan investment in structuring care packages around early identification of the disease and implementation of key management protocols to slow its progression.  Seniors, who in a recently released poll expressed higher satisfaction rates with Medicare Advantage than traditional Medicare, have raised their voices, making the case in public forums that the program needs to be protected.  Lawmakers, such as Sen. Mike Crapo (R-Idaho) and Rep. Bill Johnson (R-Ohio), continue to weigh-in, too.  And, Health Action Network members have also sent thousands of emails of their own to their elected officials asking them to continue to stand up for the millions of American seniors and persons with disabilities enrolled in Medicare Advantage plans. 

High Cost Rx:
Last year, Medicare spent $4.5 billion on new, high-priced hepatitis C medications, a figure more than 15 times greater than what it spent the previous year on treatments for the liver disease.  Those expenditures not only impact taxpayers, but will also translate into higher deductibles and maximum out-of-pocket costs for the program’s 39 million beneficiaries.  The spending surge is unlike any Medicare’s Part D prescription drug program has ever seen, which, understandably, has administrators worried, especially, with so many new breakthrough drugs in the pipeline.  These blockbuster medications – some of which carry the potential for more than $1 billion in annual sales – will only exacerbate the unsustainable trajectory of high-priced drugs, which not only leads to rampant turbulence across the health care spectrum, but has already resulted in adherence issues amongst patient populations unable to keep up with these out-of-control costs.

From Volume to Value:
The implementation of the Affordable Care Act, which celebrated its 5th anniversary last week, has ushered in a renewed focus on quality in the delivery of health care in this country.  Already, providers, plans, and other stakeholders have embraced the promise of quality leading to innovation, improved access, and shared savings in the health care transaction.  Naturally, the federal government has also glommed onto the issue, seeing the inherent benefits in shifting care away from its traditional volume-based roots to more value-based ones.  Most recently, that’s seen the Department of Health & Human Services (HHS) announce its intention to broadly implement value-based care over the next two years through the Medicare payment system and in Accountable Care Organizations (ACOs).  While it remains to be seen what form these changes will take, the shift represents an important step away from quantity of services performed to patient health outcomes and the quality of care provided.

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We encourage you to stay involved as implementation efforts surrounding health care reform progress.  Visit the Health Action Network and be sure to let us know what's on your mind.


Looking Ahead

With CMS expected to finalize its proposed changes to Medicare Advantage on the other side of the weekend, there’s still time for Health Action Network members to support the last-minute efforts to preserve the program and protect its 16 million beneficiaries from further, harmful cuts.  

Also, we'll be taking some time off next week, so there won't be a newsletter. But, keep up with the latest developments by following the Health Action Network on Twitter and by liking us on Facebook. And, as always, be sure to let us know if there's something you'd like to see covered in a future edition.

Have a safe and happy holiday!