Datapoint: Michigan Health System to Acquire Ohio’s Summa Health

July 16, 2019

Southeast Michigan-based Beaumont Health is set to acquire another health system, Akron, Ohio’s Summa Health. The deal would add four hospitals to Beaumont’s eight. Summa Health also operates a health insurance unit, SummaCare, with 64,912 current members. About 35% of SummaCare’s members are enrolled in Medicare Advantage products, with another 30% enrolled in group risk plans.

Southeast Michigan-based Beaumont Health is set to acquire another health system, Akron, Ohio’s Summa Health. The deal would add four hospitals to Beaumont’s eight. Summa Health also operates a health insurance unit, SummaCare, with 64,912 current members. About 35% of SummaCare’s members are enrolled in Medicare Advantage products, with another 30% enrolled in group risk plans.

Source: AIS’s Directory of Health Plans

In Win for Managed Care, Trump Administration Drops Rebate Rule

July 16, 2019

In a move that Wall Street analysts deemed a win for the managed care industry, the Trump administration decided to withdraw a proposed rule that would have overhauled the prescription drug rebate system in Medicare Part D.

The proposed rule, first released in February, would have removed safe-harbor protections under the federal anti-kickback statute for rebates paid by drug manufacturers to PBMs, Part D plans and Medicaid managed care organizations, and it would have created a new safe-harbor protection for point-of-sale drug discounts.

By Leslie Small and Judy Packer-Tursman

In a move that Wall Street analysts deemed a win for the managed care industry, the Trump administration decided to withdraw a proposed rule that would have overhauled the prescription drug rebate system in Medicare Part D.

The proposed rule, first released in February, would have removed safe-harbor protections under the federal anti-kickback statute for rebates paid by drug manufacturers to PBMs, Part D plans and Medicaid managed care organizations, and it would have created a new safe-harbor protection for point-of-sale drug discounts.

Citi analyst Ralph Giacobbe told investors his firm expects the news “to be favorable most specifically to entities with larger PBM exposure (Cigna Corp., CVS Health Corp./Aetna and UnitedHealth Group) as it eliminates the uncertainty and overhang that the rebate rule had on those companies.”

Meanwhile, industry experts expressed surprise at the administration’s pullback on the rebate proposal and its timing.

“My initial reaction is it’s surprising given the amount of capital the administration has put into this policy,” says Matt Kazan, a principal in Avalere Health’s policy practice. He adds dropping the rebate rule increases the likelihood that the Trump administration will move forward on other proposals to show progress in its vow to lower drug costs.

Kazan points to various implications for health plans in the rebate rule’s demise. “Certainly, a lot of the uncertainty about 2020 and 2021 goes away in terms of bidding and Part D,” he says. But if Congress makes structural changes to Part D that it’s considering, he says there could be greater liability for plans in the catastrophic phase of the benefit.

Datapoint: Appeals Court Takes Up ACA Case That Could Leave Millions Uninsured

July 15, 2019

A federal appeals court in New Orleans last week took up the lower court ruling in Texas v. United States that declared the Affordable Care Act (ACA) unconstitutional, which, if upheld, could leave health coverage for millions in jeopardy. As of the first quarter of 2019, 11,456,261 people are currently enrolled in exchange plans, and analysts estimate that about 20 million people are insured through programs created by the law.

A federal appeals court in New Orleans last week took up the lower court ruling in Texas v. United States that declared the Affordable Care Act (ACA) unconstitutional, which, if upheld, could leave health coverage for millions in jeopardy. As of the first quarter of 2019, 11,456,261 people are currently enrolled in exchange plans, and analysts estimate that about 20 million people are insured through programs created by the law.

Source: AIS’s Directory of Health Plans

Maine MCOs Show Concern about New Prescription Drug Reform Laws

July 15, 2019

Maine is “forging new ground” with its recent enactment of a comprehensive prescription drug reform legislative package, the National Academy for State Health Policy says. The Pine Tree State, however, is not alone in its efforts. NASHP reports that 47 states had filed 269 bills to control prescription drug costs as of July 7 — with 46 such laws enacted this year in 29 states.

Maine Gov. Janet Mills, a Democrat, on June 24 signed into law four bills to:

By Judy Packer-Tursman

Maine is “forging new ground” with its recent enactment of a comprehensive prescription drug reform legislative package, the National Academy for State Health Policy says. The Pine Tree State, however, is not alone in its efforts. NASHP reports that 47 states had filed 269 bills to control prescription drug costs as of July 7 — with 46 such laws enacted this year in 29 states.

Maine Gov. Janet Mills, a Democrat, on June 24 signed into law four bills to:

✦Set up a wholesale prescription drug importation program with approval from HHS.

✦Create a Prescription Drug Affordability Review Board.

✦Further expand drug price transparency.

“The Maine bill goes beyond other states’ transparency bills because it requires reporting from each entity in the supply chain about past and projected costs and revenues at the individual drug level,” NASHP says.

✦Prohibit PBMs from retaining rebates paid by prescription drugmakers, requiring those rebates to be passed along to the consumer or the health plan.

Maine Association of Health Plans Executive Director Katherine Pelletreau said in comments emailed July 10 that the group “shares the concerns about the rising cost of prescription drugs, but remains concerned these bills avoid addressing the root causes of the problem — the list prices set by manufacturers.”

“These new laws may have unintended consequences for consumers and insurers,” says Pelletreau. “While we appreciate the legislature’s intent, the high cost of prescription drugs will likely persist as these bills focused largely on the distribution and health insurance coverage for drugs, rather than the manufacturing and price setting process.”

People on the Move

July 12, 2019