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This Week in Health Care Reform - April 8th, 2016

Proposed changes to Medicare Advantage are finalized; big price hikes seen on some of the most widely used drugs; and, states continue their push to keep regulatory pace with advances in technology.


Week in Review

Medicare Advantage Funding: As expected, on Monday the Centers for Medicare & Medicaid Services (CMS) announced its final decision regarding changes to the underlying funding structure for Medicare Advantage for 2017.  In finalizing those changes, the agency demonstrated a commitment to proposals it had initially put forth in February, despite the efforts of stakeholders, supporters, and lawmakers, whose opposition to the proposed changes stemmed from concern over yearly cuts to the program and the further deterioration of its coordinated model of care.  Among the worry items that stakeholders and supporters of the popular program had identified as being problematic was the implementation of a revised risk adjustment model that threatened to detrimentally impact plans serving the most vulnerable and chronically ill beneficiaries.  Even though CMS decided to go ahead with its revised model, the agency did tweak the methodology used to calculate the changes, somewhat mitigating the adverse impact to these plans and the patients they serve.  However, initial analysis of the final rate changes points to plans with a higher mix of chronically ill enrollees being disproportionately impacted in a negative way.  While acknowledging that CMS did take steps to mitigate the negative impact of its initial proposed changes, the response from the industry was measured, with an emphasis on the need to do more to the protect the plans that take on the neediest and costliest patient populations.

Rx Price Hikes:
A new analysis discovered that prices for widely used medications in this country have grown dramatically in recent years – in some cases, more than doubling.  Performed by Reuters, their investigation found that over the past five years, prices for four of the nation’s top ten drugs increased by more than 100 percent, while the remaining six went up more than 50 percent.  Taken collectively, the price increases for these drugs used to treat common conditions, such as, arthritis, asthma, and high cholesterol, have added billions of dollars of costs for consumers, employers, and government programs.  Unsurprisingly, response has been swift, with concerned stakeholders drawing further attention to what the broad implications of these price hikes suggest, namely, the unsustainable trajectory of drug prices in the U.S.

Regulating Telehealth:
As highlighted in last week’s newsletter, states continue to work towards ensuring that their regulatory environments are able to keep pace with the increased application of technology in the health care delivery space.  It wasn’t too long ago that stakeholders, like the states, warily approached telehealth.  But, as the benefits of incorporating its utility into the health care continuum have repeatedly proven themselves – whether through increased access or improved clinical outcomes – staid barriers to telehealth’s embrace have eroded.  Currently, legislatures in West Virginia, Missouri, and Washington are considering bills that would pave the way for the wider-spread adoption of telehealth in their states, furthering the movement across the country to leverage the promise on offer of a 21st century solution to some of the persistent problems that still plague our health care system.

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