News Briefs

News Briefs

January 6, 2020

✦ HHS’s formula for calculating payments associated with the Affordable Care Act’s risk adjustment program is not “arbitrary and capricious,” a three-judge panel of the Tenth Circuit Court of Appeals ruled on Dec. 31. So states a new post from attorney Katie Keith’s “Following the ACA” blog on Health Affairs’ website, which explains the decision reverses a district court ruling in New Mexico that led the Trump administration to temporarily suspend about $10.4 billion in risk adjustment payments in 2018 (HPW 7/16/18, p. 1). The Consumer Operated and Oriented Plan (CO-OP) that challenged the risk adjustment methodology, New Mexico Health Connections, objected to HHS’s use of a statewide average premium to calculate risk adjustment payments, saying that disadvantages smaller, newer and lower-priced health plans. The CO-OP could appeal directly to the Supreme Court or ask for the case to be reheard by the entirety of the Tenth Circuit, Keith writes. But it’s possible that the ruling will be the final word on risk adjustment litigation.

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News Briefs

January 3, 2020

CareFirst BlueCross BlueShield plans to acquire two Medicaid managed care organizations in the Baltimore and Washington, D.C., areas, respectively. CareFirst on Dec. 20 said it reached separate definitive agreements with Trusted Health Plan, a Medicaid MCO operating exclusively in Washington, D.C., and University of Maryland Health Partners, which serves 47,000 Medicaid enrollees in 20 Maryland counties and Baltimore. The latter is owned by the University of Maryland Medical System, which also offers a Medicare Advantage plan that was not part of the transaction. Trusted began operations in 2013 and covers more than 34,000 enrollees; the company sold its Michigan managed Medicaid business to Health Alliance Plan in June 2019 (RMA 6/20/19, p. 8). View the announcement at https://bit.ly/2uar20l.

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News Briefs

January 1, 2020

✦ Express Scripts and Prime Therapeutics LLC unveiled a partnership by which the former will offer the latter services related to retail pharmacy network and drug manufacturer contracts. Through the three-year deal, Express Scripts, a Cigna Corp. subsidiary, will provide pharmacy network development and negotiate with drugmakers for pharmacy benefit drugs on behalf of Prime’s 28 million members, as well as its own 75 million customers. Each company will work independently on managing medical benefit therapies and value-based contracting. In a Jan. 7 Drug Channels blog, Adam Fein, Ph.D., CEO of Drug Channels Institute, a subsidiary of Pembroke Consulting, Inc., maintains that the transaction “has potentially major implications,” as “manufacturers and pharmacies will face the biggest PBM ever.” Contact Prime’s Karen Lyons at klyons@primetherapeutics.com and Cigna’s Will McDowell at William.mcdowell2@cigna.com. Read Fein’s blog at https://bit.ly/36xvnJb.

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News Briefs

December 26, 2019

✦ While Congress’ recently passed $1.4 trillion spending package didn’t usher in any sweeping drug-price reforms, it did include a measure aimed at increasing generic-drug competition. The CREATES Act is intended to prevent manufacturers of branded drugs from engaging in tactics to delay the entry of biosimilar or generic versions of their products to the market, including refusing to send samples of their branded drugs and gaming an FDA safety protocol. Meanwhile, the drug-pricing reform bill championed by House Speaker Nancy Pelosi (D-Calif.) cleared the House on Dec. 12, but was widely reported to be unlikely to go anywhere in the Senate, where Republican leaders are opposed to its more radical provisions — such as allowing the federal government to negotiate the price of certain prescription drugs. View the part of the spending package that includes the CREATES Act at https://bit.ly/2MhMJ4Z and a CNBC article about Pelosi’s bill at https://cnb.cx/2Mb3SgD.

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News Briefs

December 23, 2019

✦ Humana Inc. on Dec. 16 said it plans to acquire Enclara Healthcare, a major provider of pharmacy benefit management services for hospice patients. Humana will purchase privately held Enclara — which serves more than 450 hospice providers and 97,000 hospice patients per day — from the Philadelphia-based company’s management and Consonance Capital Partners, a private equity firm. Financial terms of the transaction were not disclosed.

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News Briefs

December 19, 2019

✦ In his first week as Kentucky’s governor, Andy Beshear (D) on Dec. 16 informed CMS that the state would no longer be pursuing its controversial work requirement program that could have led to nearly 100,000 Kentuckians losing their Medicaid coverage. Beshear also signed an executive order preserving the state’s expansion of Medicaid, which was established by his father and former governor, Steve Beshear (D), but dismantled by Republican governor Matt Bevin. This effectively ended the state’s ongoing litigation over its Kentucky HEALTH demonstration, which was approved by the Trump administration in 2018 and twice struck down by a federal judge.

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