Abstract

Health Insurers Rethink Workplaces in Post-COVID Future

April 6, 2021

With COVID-19 vaccination becoming increasingly widespread, businesses of all types are starting to plan for what their workplaces — both remote and office-based — will look like in the “new normal” created in the pandemic’s aftermath. Health insurers are no exception.

CareFirst BlueCross BlueShield, for example, recently unveiled “the next phase of a reimagined employee and workplace experience strategy.” The nonprofit insurer explained in a March 24 news release that it is “working collaboratively with technology partners to design a new multi-faceted platform for employees that will be interactive and help foster a fully integrated work experience” wherever workers are located.

NOTE: The abstract below is a shortened version of the Health Plan Weekly article “With Pandemic’s End in View, Insurers Rethink Workplaces.”

By Leslie Small

With COVID-19 vaccination becoming increasingly widespread, businesses of all types are starting to plan for what their workplaces — both remote and office-based — will look like in the “new normal” created in the pandemic’s aftermath. Health insurers are no exception.

CareFirst BlueCross BlueShield, for example, recently unveiled “the next phase of a reimagined employee and workplace experience strategy.” The nonprofit insurer explained in a March 24 news release that it is “working collaboratively with technology partners to design a new multi-faceted platform for employees that will be interactive and help foster a fully integrated work experience” wherever workers are located.

CareFirst just passed the one-year anniversary of having 95% of its associates working fully remote, the insurer noted, but it doesn’t plan to have that be the case forever. “In the future we plan to implement a hybrid strategy,” the insurer tells AIS Health. “Approximately 55% [of workers] will be enabled to work in a full-time remote capacity spending one day or less a week in an office setting; 30% will divide their time in an office 2-3 days a week and [be] remote the remainder of the time; and close to 15% will be full-time in a CareFirst office location 4-5 days a week.”

Similar to CareFirst, Highmark Inc. has kept most of its associates out of the office since the start of the pandemic. “And we have told employees it is unlikely that any employees will return to an office environment before July of this year,” the company said.

Those two insurers’ strategies are not out of step with what Willis Towers Watson has been observing through its polling and conversations with employers, says Rachael McCann, senior director of health and benefits at the benefits consulting firm.

“For the most part…we are seeing more companies across all industries, [in] the U.S. and global in nature, pushing pause because they’re looking at their real estate,” she says.

In Willis Towers Watson’s “2021 Emerging From the Pandemic Survey,” released in February, companies in the health care industry reported that an average of 44% of their employees worked remotely as of the first quarter of 2021, and they expect the share to be 30% by the end of the year.

Diabetes Reversal Platform Shows Positive Outcomes, Calif. Blues Plan Reports

April 5, 2021

Diabetes prevention and diabetes management are both key tenets of Medicare Advantage insurers’ approach to addressing this costly condition that impacts one in three Medicare enrollees. But one tech-savvy startup aims to popularize a third category — diabetes reversal — and early adopter Blue Shield of California says the program has achieved very desirable results in less than two years.

Utilizing a nutrition protocol combined with high frequency interaction with health coaches to achieve significant reductions in blood glucose levels — all done virtually — Virta Health has a mission of reversing type 2 diabetes in 100 million people by 2025.

NOTE: The abstract below is a shortened version of the RADAR on Medicare Advantage article “Calif. Blues Plan Sees Promise in Diabetes Reversal Platform.”

By Lauren Flynn Kelly

Diabetes prevention and diabetes management are both key tenets of Medicare Advantage insurers’ approach to addressing this costly condition that impacts one in three Medicare enrollees. But one tech-savvy startup aims to popularize a third category — diabetes reversal — and early adopter Blue Shield of California says the program has achieved very desirable results in less than two years.

Utilizing a nutrition protocol combined with high frequency interaction with health coaches to achieve significant reductions in blood glucose levels — all done virtually — Virta Health has a mission of reversing type 2 diabetes in 100 million people by 2025.

“It is a highly individualized virtual care team that’s working with the member,” says Steve Hastings, health plan sales leader with Virta. As part of the nutrition protocol, coaches work with patients to figure out what they can eat in their own “food environment,” and interact with members based on their preference.

Blue Shield of California includes Virta as an optional benefit enhancement in its Wellvolution platform, which offers online and in-person programs for general wellbeing and disease reversal.

Blue Shield Senior Director of Lifestyle Medicine Angie Kalousek says Virta is one of Wellvolution’s highest-performing providers, and in the short time members have been engaging with the program, they have demonstrated improved outcomes and reported multiple positive side effects.

In aiming to get members “off the medications they’re sort of shackled to as diabetics, they’re not only tackling the cost of health care but they’re really improving the life of the member,” says Kalousek of Virta. For the members who have engaged with Virta, nearly 65% have achieved statistically significant clinical outcomes.

In a small study looking at prescription drug claims for 60 members using the Virta treatment platform, Blue Shield of California observed that 85% of members lost weight. In addition, more than half of members narrowed their diabetes medications down to one agent, and 30% discontinued their medications altogether.

Meanwhile, the insurer is starting to look at ways to measure the cost effectiveness of using such a program. Considering the estimated lifetime expense of treating a diabetic patient is $100,000, and Blue Shield can pay up to $3,900 per member to Virta — although most members achieve maintenance levels at a lower cost — “there’s an argument that there’s a lot of cost savings on the table,” says Kalousek.

Study Highlights Promise of Bundled Payments in Employer Plans

April 1, 2021

A bundled payment program run by San Francisco-based digital health company Carrum Health resulted in an average per-episode savings of more than $16,000 per orthopedic or surgical procedure, a recent RAND Corp. analysis found.

Counting both procedures reimbursed under the bundled payment program and procedures reimbursed outside the program, per-episode costs for the three procedures studied — spinal fusion, major joint replacement and bariatric surgery — were 10.7% lower overall, on average, than costs for comparable procedures prior to implementation of the program. That added up to a total savings of $4,229 per episode, the study found.

NOTE: The abstract below is a shortened version of the Health Plan Weekly article “Bundled Payment Program for Employer Plans Reduces Costs.”

By Jane Anderson

A bundled payment program run by San Francisco-based digital health company Carrum Health resulted in an average per-episode savings of more than $16,000 per orthopedic or surgical procedure, a recent RAND Corp. analysis found.

Counting both procedures reimbursed under the bundled payment program and procedures reimbursed outside the program, per-episode costs for the three procedures studied — spinal fusion, major joint replacement and bariatric surgery — were 10.7% lower overall, on average, than costs for comparable procedures prior to implementation of the program. That added up to a total savings of $4,229 per episode, the study found.

The analysis, published in the March issue of Health Affairs, determined that employer-sponsored health plans captured approximately 85% of the total savings, or $3,582 per episode. Patient cost-sharing payments decreased by $498 per episode, a 27.7% relative decrease.

“What we studied is a program that uses provider-focused financial incentives to give providers plans to operate more efficiently, and then also pairs it with incentives to patients to use high-value providers,” says study author Christopher Whaley, a policy researcher in health care at the RAND Corp. in Santa Monica, Calif. “What we found is that, following the introduction of this program, overall episode costs fell by quite a bit, and patient cost-sharing actually went to zero for patients who went through the program.”

“[The] bundled prices tend to be quite a bit lower than if we just go through the normal insurance system,” Whaley says, noting that the providers give up higher prices for a guaranteed payment with no insurance road blocks or red tape. Implementation of the direct payments program also was associated with reductions in price variation, the study found.

Although researchers didn’t look at outcomes as thoroughly as they did costs, they did find that some outcomes appeared to be better in patients participating in the bundled payment program, Whaley says: “For example, for bariatric surgery, the national commercial patient readmission rate is, I think, around 4%, and for the patients who went through the program, it was 0.5%. So it looks like readmissions are about 75% lower, which is a huge quality difference.”

PBM Regulation, Rebate Rule Are High on Legislative Agenda

March 31, 2021

As a new bill introduced by Sen. Bernie Sanders (I-VT) indicates, Congress is once again looking seriously at tackling drug pricing reform. D.C. insiders say that Democrats could pursue big changes to PBM regulation and Medicare’s ability to negotiate drug prices.

Also, Congress could repeal the Trump administration’s so-called “rebate rule,” which would have removed safe-harbor protections under the federal anti-kickback statute for rebates paid by drug manufacturers to PBMs and Medicare Part D plans.

NOTE: The abstract below is a shortened version of the RADAR on Drug Benefits article “PBM and Part D Reform Could Be on Legislative Agenda.”

By Peter Johnson

As a new bill introduced by Sen. Bernie Sanders (I-VT) indicates, Congress is once again looking seriously at tackling drug pricing reform. D.C. insiders say that Democrats could pursue big changes to PBM regulation and Medicare’s ability to negotiate drug prices.

Also, Congress could repeal the Trump administration’s so-called “rebate rule,” which would have removed safe-harbor protections under the federal anti-kickback statute for rebates paid by drug manufacturers to PBMs and Medicare Part D plans.

Each of H.R. 3 , the new bill from Sanders, and a Senate bill sponsored by Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) would implement out-of-pocket spending caps for Part D beneficiaries and considerably change how costs are divided up in the catastrophic phase of coverage. In each bill, Medicare would pay less, enrollees would pay nothing, and manufacturers and plan sponsors would pay more in the catastrophic coverage phase. H.R. 3 also would mandate more drug price transparency from manufacturers, allow HHS to negotiate prices for covered drugs, and set the maximum price for a drug at 120% of the average of prices in Australia, Canada, France, Germany, Japan and the United Kingdom.

Dan Mendelson, founder of Avalere Health, says that lowering drug prices is a popular policy.

“They need to pass something if they do it at all, because next year it’s going to be the run-up to the [2022 midterm] election,” Mendelson observes. “What sits on the other side of that is that these laws are exceedingly difficult to pass. I think there’s…an intensified support for the pharmaceutical industry given their incredible performance in getting these COVID vaccines to market so quickly. And they are a force of nature when it comes to lobbying, so…it’s likely that this stuff will get tempered a lot.”

Further complicating matters is Democrats’ narrow majority in the Senate. A standalone drug reform bill is unlikely to garner support from enough members of the upper chamber.

As the American Rescue Plan was passed through the budget reconciliation process, eliminating the rebate rule is likely to be part of the next package. The rebate rule would be costly but hasn’t actually been implemented, so eliminating it would create a massive savings on paper without the political cost that would come from cutting a real program of similar scale.

Health Plans on ACA Exchanges May Be Underpaying MLR Rebates

March 30, 2021

Health insurers on the Affordable Care Act (ACA) exchanges are consistently overestimating the amount they spend on enrollee benefits as part of their medical loss ratio (MLR) reporting, resulting in “hundreds of millions of dollars in underpaid policyholder rebates,” according to new research.

The ACA requires health insurers in the individual/small-group markets and large-group markets to spend at least 80% and 85%, respectively, of their premium income on medical care and quality improvement initiatives. If the percentage falls below those thresholds, insurers in those markets must pay a rebate to customers, and rebates have been rising considerably in the last three years, according to the Kaiser Family Foundation.

NOTE: The abstract below is a shortened version of the Health Plan Weekly article “ACA Exchange Insurers Could Be Gaming MLR Rebate System.”

By Leslie Small

Health insurers on the Affordable Care Act (ACA) exchanges are consistently overestimating the amount they spend on enrollee benefits as part of their medical loss ratio (MLR) reporting, resulting in “hundreds of millions of dollars in underpaid policyholder rebates,” according to new research.

The ACA requires health insurers in the individual/small-group markets and large-group markets to spend at least 80% and 85%, respectively, of their premium income on medical care and quality improvement initiatives. If the percentage falls below those thresholds, insurers in those markets must pay a rebate to customers, and rebates have been rising considerably in the last three years, according to the Kaiser Family Foundation.

But according to research that is slated to be published in The Accounting Review, insurers could have been paying far more in rebates. Looking at MLR filings from 2003 through 2014, researchers found that in cases where firms had the incentive to manipulate their reports — such as when they would have to pay out rebates — 63% of firms overestimated claims, compared to 49% of firms with no such incentives. “Thus, we infer that approximately 14 percent of firms with the incentive to manipulate do so,” wrote study authors Evan Eastman of Florida State University, David Eckles of University of Georgia, and Andrew Van Buskirk of Ohio State University.

Katie Keith, an attorney and research professor at Georgetown University’s Center on Health Insurance Reforms, says she is “not really surprised” by the study’s findings. “[With] any of these programs where it pretty much relies on insurer reporting, there’s an incentive for many to game the system,” says Keith, who was not involved in the study. “I’m not saying all of them game the system, but you don’t even just see it in the commercial market, you see it in Medicare Advantage and all these other systems, too.”

Krutika Amin, an associate director for the KFF’s Program on the ACA, says the COVID-19 pandemic’s generally positive impact on insurer finances has already heightened the likelihood that the sector will face increased regulatory scrutiny. “So I think there is definitely a conversation coming up around updating MLR requirements,” she tells AIS Health.

New Administration’s Stance on Copay Accumulators Remains Unclear

March 29, 2021

Thanks to recent regulatory moves and the increasing prevalence of copay accumulator/maximizer programs, the tactics that payers use to counter drug manufacturer copay assistance continue to be a controversial topic in the health care sector.

Copay accumulators work by preventing any monetary assistance that pharmaceutical companies offer commercially insured patients from counting toward their deductible or out-of-pocket maximum. Their close cousin, copay maximizers, take the total amount of a manufacturer’s copay offset program and divide it by 12, and that amount becomes the new monthly copayment for all patients on any given drug over the course of a year.

NOTE: The abstract below is a shortened version of the RADAR on Drug Benefits article “How Will Biden Administration Handle Copay Accumulators?

By Leslie Small

Thanks to recent regulatory moves and the increasing prevalence of copay accumulator/maximizer programs, the tactics that payers use to counter drug manufacturer copay assistance continue to be a controversial topic in the health care sector.

Copay accumulators work by preventing any monetary assistance that pharmaceutical companies offer commercially insured patients from counting toward their deductible or out-of-pocket maximum. Their close cousin, copay maximizers, take the total amount of a manufacturer’s copay offset program and divide it by 12, and that amount becomes the new monthly copayment for all patients on any given drug over the course of a year.

From insurers’ perspective, the goal of copay accumulators/maximizers is to help steer patients toward lower-cost drugs. However, copay accumulator programs have been fiercely criticized by the pharmaceutical industry and patient advocates, who argue that they lead to higher costs for consumers and thus limit access to life-saving medications.

Data collected by AIS Health’s parent company, MMIT, show that copay accumulators and maximizers are gaining steam across the commercial insurance space. Of insurers covering a collective 127.5 million lives, 41% had implemented a copay accumulator program and 32% had implemented a copay maximizer program prior to 2020, and another 26% and 24%, respectively, implemented such programs in 2020.

Recent revisions to federal regulations may be contributing to the increasing prevalence of copay accumulators. In its Notice of Benefit and Payment Parameters (NBPP) for 2021, CMS allowed non-grandfathered group and individual market plans to use copay accumulator policies even when a generic equivalent to a drug isn’t available.

A Feb. 23 analysis from Avalere Health also pointed to a December 2020 rule aimed at facilitating value-based contracts for prescription drugs in Medicaid managed care, which “created new risks for manufacturers when copay accumulator or maximizers are applied to their products.”

“They’ve definitely introduced new uncertainties and complexities into the market,” Mark Gooding, a principal at Avalere and co-author of the report, says of the regulatory developments related to copay accumulators.

Both regulations were finalized under the Trump administration, and therefore could be revised by the Biden administration. According to Gooding, it’s not yet obvious what stance the administration will take. “It’ll be interesting to see; we are still getting a sense of how new leadership at HHS and CMS view the role of accumulators and the risk that they pose to patient access and affordability,” he says.