Datapoint: Regence Partners With MultiCare Health System on New ACO

January 6, 2021

Regence, one of the largest Blues affiliates in the U.S., on Dec. 23 said it has formed a new value-based partnership with MultiCare Health System. The partnership will make use of innovative data-sharing platforms to improve interoperability and patient outcomes. MultiCare’s ACO unit, MultiCare Connected Care, serves 120,000 lives in its 16 value-based partnerships, according to a press release. Regence’s four regional subsidiaries currently serve 1,856,867 members throughout the Pacific Northwest and Rocky Mountain states.

Regence, one of the largest Blues affiliates in the U.S., on Dec. 23 said it has formed a new value-based partnership with MultiCare Health System. The partnership will make use of innovative data-sharing platforms to improve interoperability and patient outcomes. MultiCare’s ACO unit, MultiCare Connected Care, serves 120,000 lives in its 16 value-based partnerships, according to a press release. Regence’s four regional subsidiaries currently serve 1,856,867 members throughout the Pacific Northwest and Rocky Mountain states.

Source: AIS’s Directory of Health Plans

Supreme Court’s ACA Ruling May Upend Biosimilars Market

January 6, 2021

As the Supreme Court decides on the fate of the Affordable Care Act (ACA), much of the focus has been on the people who would lose health insurance coverage and protections for pre-existing conditions if the law is overturned. Another ramification of such a ruling is that the biosimilars market could be completely upended.

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) created the 351(k) biosimilar pathway. After more than one attempt to get a stand-alone bill to pass, lawmakers made it part of the ACA, and it became law on March 23, 2010.

By Angela Maas

As the Supreme Court decides on the fate of the Affordable Care Act (ACA), much of the focus has been on the people who would lose health insurance coverage and protections for pre-existing conditions if the law is overturned. Another ramification of such a ruling is that the biosimilars market could be completely upended.

The Biologics Price Competition and Innovation Act of 2009 (BPCIA) created the 351(k) biosimilar pathway. After more than one attempt to get a stand-alone bill to pass, lawmakers made it part of the ACA, and it became law on March 23, 2010.

Industry observers expect a decision on the case California v. Texas by June 2021, according to various sources. And opinions among industry experts vary on what the court will decide.

“I do think it is severable, but I am optimistic that that won’t be needed,” says one industry expert who declines to be identified.

A second industry expert who declines to be identified points out that “there have been a fair amount of amicus briefings,” which will make the court “think twice” about doing away with the BPCIA.

“I think the outcome of the Affordable Care Act case before the Supreme Court will be similarly mixed as a ruling like last time,” says F. Randy Vogenberg, Ph.D., principal at the Institute for Integrated Healthcare. “I doubt they will rule the ACA is severable but will keep that door open….If the court strikes down the ACA entirely, biosimilars on the U.S. market or in the FDA approval pipeline would have to either be grandfathered in or face a regulatory wind-down.”

If the ACA and thus the BPCIA are struck down, “personally, I think it’s unlikely that medicines would be pulled off the market,” says source No. 2. However, if the ACA is invalidated, the Supreme Court likely would include “guidance to regulators for carrying out their order.”

“I would not expect FDA to de-approve anything already approved, but the pipeline might get more muddled,” says the first source.

All that said, “[g]ood business practices would recommend that biosimilar manufacturers should be preparing for the possibility of the ACA, and thus the BPCIA, being struck down,” recommends Vogenberg. “What should they be doing is scenario planning and being prepared for the best or worst and everything in between. If biosimilars are not available, this could impact payers that have them on formulary should a disruption occur in their marketing.”

Datapoint: Oscar Plots Initial Public Offering

January 5, 2021

Insurance startup Oscar on Dec. 21 announced it is preparing an initial public offering of its common stock, “expected to commence after the completion of the SEC review process, subject to market and other conditions,” according to a press release. The insurer is undertaking a hefty expansion in 2021, bringing its individual commercial product offerings to 19 new markets. Oscar currently enrolls 416,998 members, with 95.5% enrolled in individual plans.

Insurance startup Oscar on Dec. 21 announced it is preparing an initial public offering of its common stock, “expected to commence after the completion of the SEC review process, subject to market and other conditions,” according to a press release. The insurer is undertaking a hefty expansion in 2021, bringing its individual commercial product offerings to 19 new markets. Oscar currently enrolls 416,998 members, with 95.5% enrolled in individual plans.

Source: AIS’s Directory of Health Plans

Wall Street Is Optimistic About Health Insurance Industry, Expects More M&A in 2021

January 5, 2021

Equities analysts are bullish on the health insurance industry in 2021, despite the challenges caused by the COVID-19 pandemic. Wall Street also expects more mergers and acquisitions will take place in 2021 than the previous year.

“Prior to 2020, the industry had already posted several years of record earnings, leading to higher absolute and risk-adjusted capitalization levels, trends that full-year results are likely to further support,” wrote AM Best analyst Doniella Pliss in the firm’s 2021 outlook for health insurers. “In addition, amid a severe level of economic uncertainty, the industry accumulated substantial cash balances, leading to stronger liquidity metrics. These factors make the industry well prepared to withstand the anticipated challenges and further uncertainties of 2021.”

By Peter Johnson

Equities analysts are bullish on the health insurance industry in 2021, despite the challenges caused by the COVID-19 pandemic. Wall Street also expects more mergers and acquisitions will take place in 2021 than the previous year.

“Prior to 2020, the industry had already posted several years of record earnings, leading to higher absolute and risk-adjusted capitalization levels, trends that full-year results are likely to further support,” wrote AM Best analyst Doniella Pliss in the firm’s 2021 outlook for health insurers. “In addition, amid a severe level of economic uncertainty, the industry accumulated substantial cash balances, leading to stronger liquidity metrics. These factors make the industry well prepared to withstand the anticipated challenges and further uncertainties of 2021.”

“Many of our rated issuers have grown their scale significantly over recent years, taken market share and added capabilities. The evolution of business profiles is credit positive,” wrote Moody’s Investors Service analyst Marc Pinto.

“We expect insurers to continue to acquire non-regulated health service businesses to deepen vertical integration, but large transformative deals are unlikely,” Pinto explained. “Smaller, tuck-in insurance acquisitions to improve geographic diversification or under-scaled businesses are more likely. We expect leverage to improve in the absence of outsized M&A.”

Analysts also projected a more stable political and regulatory environment with the departure of the Trump administration, and they observed that a split Congress is unlikely to pass major health care reform legislation. Further, they expect that the Supreme Court will not strike down the Affordable Care Act in its pending decision on California v. Texas.

However, analysts emphasized that the pandemic is far from over, and no one can say for certain what level of care utilization to expect. When utilization dropped in the second quarter of 2020, carriers’ earnings spiked dramatically. A similar, if smaller, phenomenon could take place early in 2021.

“We expect the COVID pandemic to linger into 2021 with more sluggish utilization in [the first half of the year],” wrote Citi analyst Ralph Giacobbe in his 2021 health care outlook. However, he predicted that the second half of the year was “more likely to show accelerating utilization/spending as individuals gain comfort as we get broader administration of the vaccine.”

Datapoint: UnitedHealthcare, Intermountain Launch ACO

January 4, 2021

Intermountain Healthcare and UnitedHealth Group on Dec. 16 unveiled a new partnership — a Medicare Advantage accountable care organization (ACO) in Utah. United’s Medicare Advantage members who receive care from Intermountain physicians throughout Utah are eligible for the ACO. Intermountain’s physicians will receive outcomes-based payments from United, and United will also provide patient-level data on members’ previous hospital visits and chronic health needs to Intermountain’s value-based care subsidiary, Castell. United currently serves 92,111 MA lives in Utah.

Intermountain Healthcare and UnitedHealth Group on Dec. 16 unveiled a new partnership — a Medicare Advantage accountable care organization (ACO) in Utah. United’s Medicare Advantage members who receive care from Intermountain physicians throughout Utah are eligible for the ACO. Intermountain’s physicians will receive outcomes-based payments from United, and United will also provide patient-level data on members’ previous hospital visits and chronic health needs to Intermountain’s value-based care subsidiary, Castell. United currently serves 92,111 MA lives in Utah.

Source: AIS’s Directory of Health Plans

Despite New Approvals, Plans Still Favor Generics for Epilepsy

January 4, 2021

Pharmaceutical treatment for different types of epilepsy generally still relies on tried-and-true generics, despite recent efforts by drug manufacturers to introduce new branded medications into the mix, PBM insiders say.

Xcopri (cenobamate tablets), manufactured by SK Biopharmaceuticals Co., Ltd.’s subsidiary SK Life Science, Inc., launched in May for the treatment of partial-onset seizures. However, many plans haven’t jumped to add Xcopri to their formularies, says Mesfin Tegenu, R.Ph., president of PerformRx.

By Jane Anderson

Pharmaceutical treatment for different types of epilepsy generally still relies on tried-and-true generics, despite recent efforts by drug manufacturers to introduce new branded medications into the mix, PBM insiders say.

Xcopri (cenobamate tablets), manufactured by SK Biopharmaceuticals Co., Ltd.’s subsidiary SK Life Science, Inc., launched in May for the treatment of partial-onset seizures. However, many plans haven’t jumped to add Xcopri to their formularies, says Mesfin Tegenu, R.Ph., president of PerformRx.

“Some plans have opted to take a cautious approach and leave the medication as non-formulary to start,” Tegenu says. “It is difficult to tell the impact of this new drug launch on the treatment of epilepsy. However, Xcopri trials demonstrated high efficacy in partial onset seizures and refractory epilepsy, lending it a strong clinical profile. One could reasonably suspect a high impact on the epilepsy treatment paradigm.”

In most cases, though, generics are the first-line treatments for many forms of the disorder, according to Tegenu. Many of the drugs used to treat epilepsy are covered without restriction by plans.

Prime Therapeutics LLC treats Xcopri as a non-preferred brand, says April Kunze, senior director of clinical formulary development and trend management strategy for the PBM. Premera Blue Cross’ Medicare Advantage formularies, Cigna Corp.’s national preferred formulary and HealthPartners’ commercial formularies impose quantity limits on Xcopri, according to their plan documents.

“Treatment is based on the type of epilepsy diagnosed, and labeled and off-label indications of the individual products. There is a fair amount of overlap as many drugs share multiple indications. However, many newer agents are narrowly indicated,” Tegenu says.

In November 2018, GW Pharmaceuticals launched its product Epidiolex (cannabidiol), a much-anticipated new drug for two rare forms of childhood epilepsy. In August, the FDA expanded indications for Epidiolex to include seizures associated with tuberous sclerosis complex in patients age 1 or older.

“Based on previous positive trial results in TSC patients, Epidiolex may become an important treatment option for patients,” Elizabeth Thiele, M.D., Ph.D., director of the Herscot Center for Tuberous Sclerosis Complex at Massachusetts General Hospital, said in a statement when the FDA widened Epidiolex indications.

For his part, Tegenu expresses some skepticism about the drug. “Epidiolex represents another option for treatment of Lennox-Gastaut and Dravet syndrome,” Tegenu says. “However, its efficacy hasn’t shown significant improvement relative to existing treatments.”

Datapoint: FDA Approves Shortened Infusion Time for Ocrevus

December 30, 2020

The FDA on Dec. 14 approved a two-hour infusion time for Roche’s blockbuster multiple sclerosis drug Ocrevus. The news comes as Novartis launches its MS challenger, Kesimpta, which is self-administered. For the treatment of multiple sclerosis, Ocrevus is covered under the pharmacy benefit for 39% of covered lives, the medical benefit for 26% of covered lives, and both the medical and pharmacy benefit for 24% of covered lives. In the pharmacy benefit, Ocrevus holds preferred status for 6% of covered lives, growing to 17% with utilization management restrictions applied.

The FDA on Dec. 14 approved a two-hour infusion time for Roche’s blockbuster multiple sclerosis drug Ocrevus. The news comes as Novartis launches its MS challenger, Kesimpta, which is self-administered. For the treatment of multiple sclerosis, Ocrevus is covered under the pharmacy benefit for 39% of covered lives, the medical benefit for 26% of covered lives, and both the medical and pharmacy benefit for 24% of covered lives. In the pharmacy benefit, Ocrevus holds preferred status for 6% of covered lives, growing to 17% with utilization management restrictions applied.

SOURCE: MMIT Analytics, as of 12/17/20

Surprise Medical Billing Comes to An End, Insurers Oppose Arbitration Mechanism

December 30, 2020

After years of failed attempts, Congress has finally come to an agreement on a measure to end the practice of surprise medical billing.

Surprise billing, also known as balance billing, is the practice of charging patients for out-of-network procedures that insurers refuse to pay for in whole or in part. Often, patients incur these balance bills without their knowledge. The new legislation would ban providers from sending such a bill to patients, and would instead require providers to negotiate reimbursement with the patient’s insurer or submit the dispute to a binding arbitration process.

By Peter Johnson

After years of failed attempts, Congress has finally come to an agreement on a measure to end the practice of surprise medical billing.

Surprise billing, also known as balance billing, is the practice of charging patients for out-of-network procedures that insurers refuse to pay for in whole or in part. Often, patients incur these balance bills without their knowledge. The new legislation would ban providers from sending such a bill to patients, and would instead require providers to negotiate reimbursement with the patient’s insurer or submit the dispute to a binding arbitration process.

Providers will have 30 days from the day of the procedure to negotiate a compromise reimbursement amount with payers. If the parties can’t agree, they must submit their preferred reimbursement amounts to an HHS-approved arbitrator, who will pick one of the two amounts.

Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy, praised the legislation as “closer to the ideal, consumer-friendly solution” than previous attempts to address the issue.

“It’s very likely that this bill reduces premiums,” says Adler, who has contributed to research that found surprise billing increases health care costs.

Insurance stakeholders are displeased that surprise bills will be resolved through arbitration. Instead of arbitration, America’s Health Insurance Plans had lobbied for out-of-network reimbursement to be tied to a benchmark rate.

Adler thinks that insurers’ objections to arbitration are overblown, and he argues carriers will gain leverage in balance billing negotiations because of the legislation.

“It seems pretty easy for an insurer or a [plan sponsor] company to call a provider’s bluff,” Adler says, citing rules in the bill that he thinks will prevent providers from abusing the arbitration system.

Dan Mendelson, founder of Avalere Health, is more skeptical about the bill’s potential to reduce costs and slow premium inflation, since it will require new administrative costs.

“There is no question that whenever you force more cost into the system, it’s going to be reflected in consumer cost,” Mendelson explains. “So there will be a premium effect. Will people actually be able to differentiate it from the typical rise in costs? No….I do expect that it will have an effect, just from an economics standpoint.”

Datapoint: Blue Cross Blue Shield of Michigan Partners With Senior-Focused Clinics

December 29, 2020

Blue Cross Blue Shield of Michigan on Dec. 14 unveiled a new value-based partnership with Dedicated Senior Medical Centers, a provider-led group of six primary care centers arriving in Michigan’s Wayne County throughout 2021. Dedicated is a subsidiary of ChenMed. BCBSMI’s Medicare Advantage members will be able to access services at Dedicated’s medical centers, which focus on whole-person health, interdisciplinary care coordination and addressing social needs. BCBSMI is currently the seventh-largest Medicare Advantage insurer in the U.S., with 585,540 members.

Blue Cross Blue Shield of Michigan on Dec. 14 unveiled a new value-based partnership with Dedicated Senior Medical Centers, a provider-led group of six primary care centers arriving in Michigan’s Wayne County throughout 2021. Dedicated is a subsidiary of ChenMed. BCBSMI’s Medicare Advantage members will be able to access services at Dedicated’s medical centers, which focus on whole-person health, interdisciplinary care coordination and addressing social needs. BCBSMI is currently the seventh-largest Medicare Advantage insurer in the U.S., with 585,540 members.

Source: AIS’s Directory of Health Plans

Payer Execs Say Diversity Programs Must Start at Top

December 29, 2020

Internal equity and diversity programs could be a powerful business strategy for plans that serve under-resourced populations, two experts say. But to make these programs truly effective, organizations must start at the top and embed equity and diversity principles in everything they do, moving beyond a mere “box-checking” mentality, said Sachin Jain, M.D., president and CEO of SCAN Group and SCAN Health Plan.

“We have to lead with new leadership. We have to evolve our cultural dialogue around these topics,” Jain said during a Dec. 8 virtual panel at America’s Health Insurance Plans’ Consumer Experience & Digital Health Forum 2020. “But we also have to recognize that you can’t be a good business in 2020 and not actually be excellent at serving diverse populations. I see that, from the seat that I’m in, as opportunity.”

By Jane Anderson

Internal equity and diversity programs could be a powerful business strategy for plans that serve under-resourced populations, two experts say. But to make these programs truly effective, organizations must start at the top and embed equity and diversity principles in everything they do, moving beyond a mere “box-checking” mentality, said Sachin Jain, M.D., president and CEO of SCAN Group and SCAN Health Plan.

“We have to lead with new leadership. We have to evolve our cultural dialogue around these topics,” Jain said during a Dec. 8 virtual panel at America’s Health Insurance Plans’ Consumer Experience & Digital Health Forum 2020. “But we also have to recognize that you can’t be a good business in 2020 and not actually be excellent at serving diverse populations. I see that, from the seat that I’m in, as opportunity.”

When Jain came on board in June as CEO of SCAN Health Plan, he directed the organization to look at data on racial equity and diversity. “Our African-American employees trust [company] leadership less than our non-African-American employees by about 0.5 on a five-point scale. That’s a big problem,” he said. “On Medicare Advantage star measures, our African-American patients do way worse on pharmacy measures than our white patients. That’s an opportunity for us to get better.”

SCAN’s leaders recognized that they were not “thinking diversely across all of our processes across the organization,” Jain said. To begin remedying that, the health plan recently announced that it hired three new executives and promoted another to support diversity.

Aletha Maybank, M.D., chief health equity officer and group vice president at the American Medical Association Center for Health Equity, said that the AMA is performing many of the same tasks as SCAN Health Plan: “looking at our performance metrics, our policies, our culture of the organization to make sure that we’re embedding equity in this way.”

Most health care leaders understand that they need to promote diversity and equity among their leadership and workforce, Maybank said. But to make significant progress, “every single sector within our institution has to be looked at.”

Organizations first need to educate teams “so that folks actually get this.” Then, those teams can change policies, practices, culture and research, she said.