Datapoint: Molina Expects Less Exchange Income in 2020

February 18, 2020

Molina Healthcare in its fourth quarter 2019 earnings call said it expects to receive far less income from its Affordable Care Act exchange plans in 2020. The company is currently projecting that its exchange margins will top out at 4.9% this year, compared to 10.3% in 2019, which could add up to a difference of about $75 million.

Molina Healthcare in its fourth quarter 2019 earnings call said it expects to receive far less income from its Affordable Care Act exchange plans in 2020. The company is currently projecting that its exchange margins will top out at 4.9% this year, compared to 10.3% in 2019, which could add up to a difference of about $75 million. In the earnings call, executives cited increased competition for exchange membership, resulting in fewer sign-ups than anticipated, as one of the reasons for the unexpected drop. Molina currently serves 289,410 exchange members, as of the latest update to AIS’s Directory of Health Plans, representing about 9% of its total enrollment.

Source: AIS’s Directory of Health Plans

If Lawmakers Can Compromise, Surprise Billing Fix Could Arrive by May

February 18, 2020

Legislation to protect patients against surprise medical bills is once again gaining momentum in Congress, with two key House committees voting to advance proposals. However, passage of competing bills by the House Education and Labor Committee and the House Ways and Means Committee also emphasized the policy divide between lawmakers and stakeholders on the main sticking point: how to decide rates for out-of-network providers.

By Jane Anderson

Legislation to protect patients against surprise medical bills is once again gaining momentum in Congress, with two key House committees voting to advance proposals. However, passage of competing bills by the House Education and Labor Committee and the House Ways and Means Committee also emphasized the policy divide between lawmakers and stakeholders on the main sticking point: how to decide rates for out-of-network providers.

Education and Labor, which approved its bill on Feb. 11 with a bipartisan majority, would set payments for providers by basing them on regional benchmarks, while still giving providers the option of going to arbitration for bills higher than $750. Ways and Means, meanwhile, backed mediation between insurers and providers to set rates, again on a bipartisan vote. That panel also threw in a new twist: a provision designed to rein in private equity firms that have purchased physician practices.

Some policy analysts say the two camps are not as far apart as they might appear, and could rally to negotiate a compromise, particularly since this issue is on the radar of many election-year voters. “Maybe I’m being overly optimistic, but I still think there’s a good chance something gets done before the late May deadline they set for themselves,” says Loren Adler, an associate director of the USC-Brookings Schaeffer Initiative for Health Policy who has studied surprise billing.

Most surprise billing proposals would hold consumers harmless by prohibiting balance billing — when an out-of-network provider sends a patient an invoice for the difference between what they’re charging and what an insurer will pay, according to an issue brief from the American Academy of Actuaries. The proposals also would base patients’ out-of-pocket costs on in-network cost-sharing requirements for services provided at an in-network facility. But the point of contention is how to determine what providers get paid in those situations.

The Ways and Means Committee’s mediation/arbitration approach won some praise from provider groups, including the American Medical Association. Provider groups have been heavily lobbying Congress for such an approach. Meanwhile, the Coalition Against Surprise Medical Billing, which represents major health insurers and business groups, favors a benchmark approach “based on local, competitive market-based rates.”

“I don’t know whether providers or insurers will prevail on this issue, since both have very strong stances,” Caroline Pearson, a senior fellow at NORC at the University of Chicago, tells AIS Health. “The most likely scenario could be a middle-ground approach that sets payment rates for some threshold of services and uses arbitration more selectively.”

Datapoint: Geisinger to Swap MedImpact for PerformRx

February 17, 2020

Geisinger Health Plan has selected a new pharmacy benefits manager, and will switch to PerformRx in 2021 once its contract with MedImpact expires at the end of this year. Geisinger, currently the 10th-largest insurer in Pennsylvania, will continue to manage its own formulary.

Geisinger Health Plan has selected a new pharmacy benefits manager, and will switch to PerformRx in 2021 once its contract with MedImpact expires at the end of this year. Geisinger, currently the 10th-largest insurer in Pennsylvania, will continue to manage its own formulary. The insurer currently serves 528,669 lives, with 55.0% of members enrolled in a managed Medicaid or Medicare Advantage plan.

Source: AIS’s Directory of Health Plans

Some Experts Question Legality of Closed Medicaid Formularies

February 17, 2020

As part of long-awaited guidance that CMS issued to states on Jan. 30 outlining how they can test-drive a fixed federal Medicaid budget and more program flexibilities, the Trump administration invited states to try out something else that hasn’t been done before: implement a closed drug formulary for a portion of their Medicaid population.

By Leslie Small

As part of long-awaited guidance that CMS issued to states on Jan. 30 outlining how they can test-drive a fixed federal Medicaid budget and more program flexibilities, the Trump administration invited states to try out something else that hasn’t been done before: implement a closed drug formulary for a portion of their Medicaid population.

“For the first time, participating states will have more negotiating power to manage drug costs by adopting a formulary similar to those provided in the commercial market, with special protections for individuals with HIV and behavioral health conditions,” CMS said in its press release unveiling the Healthy Adult Opportunity demonstration, which states can apply for via a Section 1115 Medicaid waiver.

Currently, states’ Medicaid programs must cover all FDA-approved drugs, as mandated by federal law. But CMS is suggesting that states can waive that requirement for the population they choose to cover under their demonstration — likely people who are covered by Medicaid expansion — and still participate in the Medicaid Drug Rebate Program.

But some industry experts tell AIS Health they’re not sure whether that will be legally permissible.

“I have my doubts as to whether this will bear legal scrutiny because it goes against the entire Medicaid Drug Rebate Program, which is rebates in exchange for open formularies,” says Jeff Myers, the former CEO of Medicaid Health Plans of America and founder of health care consulting firm OptDis.

Indeed, “the legal side is obviously the giant question with the whole Healthy Adult Opportunity program,” Jason Karcher, an actuary with Milliman, Inc., tells AIS Health. “We just don’t know how the courts will ultimately see this, although I think it would be fair to be skeptical that we’ll actually get to see a waiver under this [guidance] make it in the near future.”

People on the Move

February 14, 2020