Health Plan Weekly

In Push to Innovate, Large Employers Seek Heath Plan, PBM Help

August 21, 2019

Large employers are increasingly leaning on their health plan and PBM partners to devise innovative solutions to health care challenges, according to the 2020 Large Employers’ Health Care Strategy and Plan Design Survey conducted by the National Business Group on Health (NBGH).

In the 2019 survey, 32% of large employers said they would take a “defer to partners approach” to drive health system change — implementing what their health plan and PBM present as the latest developments. For 2020, that share rose to 41%.

By Leslie Small

Large employers are increasingly leaning on their health plan and PBM partners to devise innovative solutions to health care challenges, according to the 2020 Large Employers’ Health Care Strategy and Plan Design Survey conducted by the National Business Group on Health (NBGH).

In the 2019 survey, 32% of large employers said they would take a “defer to partners approach” to drive health system change — implementing what their health plan and PBM present as the latest developments. For 2020, that share rose to 41%.

NBGH attributes that trend to a number of factors, Ellen Kelsay, NBGH’s chief strategy officer, said at a press briefing. One is that employers are “frustrated with the slow pace of change” in health care and are looking to their partners to speed it up. Most employers also lack the bandwidth to drive change on their own, she said.

What’s more, “many employers are looking for a way to streamline and consolidate their offerings,” Kelsay said, noting that the ecosystem of solutions that employers have at their disposal is “far too extensive.”

Employers are also turning to their health plan and PBM partners to figure out how to finance and manage high-cost therapies, NBGH President and CEO Brian Marcotte said at the briefing. The survey revealed that such high-cost therapies — like Novartis’ $2.1 million spinal muscular atrophy drug, Zolgensma — are employers’ No. 1 concern when it comes to managing their pharmacy benefit plans.

So how can health plans and PBMs meet employers’ desire for more help driving health care change?

They “can be proactive in reaching out to their clients to engage them on emerging trends and opportunities and propose solutions, rather than waiting for their clients to approach them,” Marcotte tells AIS Health via email.

Harvard Pilgrim, Tufts Merger Would Reshape Massachusetts Insurance Market

August 20, 2019

Harvard Pilgrim Health Care, Inc. and Tufts Health Plan said Aug. 14 that they intend to merge — a move that industry experts say will give them the scale they need to compete in an ever-more-consolidated health care market.

“There’s been massive consolidation in Massachusetts’ health systems and health insurance industry, and this is the latest and largest merger — but likely not the last,” says Joseph Paduda, a principal with Health Strategy Associates, LLC.

By Leslie Small and Judy Packer-Tursman

Harvard Pilgrim Health Care, Inc. and Tufts Health Plan said Aug. 14 that they intend to merge — a move that industry experts say will give them the scale they need to compete in an ever-more-consolidated health care market.

“There’s been massive consolidation in Massachusetts’ health systems and health insurance industry, and this is the latest and largest merger — but likely not the last,” says Joseph Paduda, a principal with Health Strategy Associates, LLC.

“The Harvard Pilgrim-Tufts deal is just what we should expect in a highly mature industry; scale matters most,” Paduda says. “Providers and payers are all moving to build market power in anticipation of the next round of negotiations around reimbursement and related issues.”

The desire to compete with Blue Cross Blue Shield of Massachusetts, which dominates the commercial insurance market in the Bay State, is another major factor driving the Harvard Pilgrim-Tufts deal, says Dan Mendelson, founder of the consulting firm Avalere Health.

As for other plans competing in Massachusetts, Rosemarie Day, founder and president of Day Health Strategies LLC, says, “I think it makes things tougher for Fallon [Health] probably.” Fallon, though, has “niche” with its a strong regional presence in the central part of the state, “and they have their own clinics [and are] trying to manage costs of care in-house,” Day adds.

Both insurers’ boards have already unanimously approved the merger, but their press release notes that it is still “subject to multiple local and federal regulatory approvals.”

Mendelson says he expects Harvard Pilgrim and Tufs will “have a high hurdle to overcome in getting approval for the transaction.”

The approval process will also probably be complicated by the fact that Massachusetts Gov. Charlie Baker (R) once served as CEO of Harvard Pilgrim, he points out.

Insurers Strive to Help Members Kick Smoking Habit

August 14, 2019

Recent research from the Centers for Disease Control and Prevention indicates that the percentage of Americans trying to quit smoking has leveled off in recent years, with most states experiencing no change in quit-attempt prevalence from 2011 to 2017.

The Affordable Care Act, Medicare and Medicaid programs, and other federal regulations already require health plans to cover a range of smoking-cessation treatments and support. But some insurers are opting to offer more robust tobacco-cessation programs to members.

By Leslie Small

Recent research from the Centers for Disease Control and Prevention indicates that the percentage of Americans trying to quit smoking has leveled off in recent years, with most states experiencing no change in quit-attempt prevalence from 2011 to 2017.

The Affordable Care Act, Medicare and Medicaid programs, and other federal regulations already require health plans to cover a range of smoking-cessation treatments and support. But some insurers are opting to offer more robust tobacco-cessation programs to members.

One example is Blue Shield of California, which in June launched a new “digitally based lifestyle medicine and health platform” called Wellvolution. Consumer choice is a key component of Wellvolution, so members who indicate they’re interested in quitting smoking are given the option of three programs: one that’s more heavily focused on telephonic support, and two that are “more app- and digital-coaching based,” says Angie Kalousek, director of markets and lifestyle medicine for Blue Shield of California.

“The one thing that we don’t really believe in and have not integrated [in the Wellvolution platform] is financial incentives,” she adds. That tactic, Kalousek says, is a “false motivator that doesn’t create sustained change.”

Like Blue Shield of California, Cigna Corp. offers members more than one option for tobacco cessation support.

“We focus on helping customers improve their whole person health — both body and mind — through the Lifestyle Management Program for Tobacco Cessation,” Tracy Awe, Cigna’s product director for consumer health engagement, says via email.

“We also incorporate tobacco cessation services into other health and well-being programs like our chronic condition coaching program,” she says.

Humana Reports Rapid Growth in Medicare Advantage

August 7, 2019

Touting “the highest individual Medicare Advantage growth we’ve seen in the last decade,” Humana Inc. CEO Bruce Broussard said during a second-quarter earnings call on July 31 that he is confident of long-term growth for his company’s MA HMO, PPO and Special Needs Plan for Medicare/Medicare dual eligibles (D-SNP) offerings.

The Louisville, Ky.-based company raised its full-year 2019 guidance, yet underscored, as it did in its first-quarter earnings call, that the expected return of the Affordable Care Act’s health insurer fee (HIF) for 2020 is looming large.

By Judy Packer-Tursman

Touting “the highest individual Medicare Advantage growth we’ve seen in the last decade,” Humana Inc. CEO Bruce Broussard said during a second-quarter earnings call on July 31 that he is confident of long-term growth for his company’s MA HMO, PPO and Special Needs Plan for Medicare/Medicare dual eligibles (D-SNP) offerings.

The Louisville, Ky.-based company raised its full-year 2019 guidance, yet underscored, as it did in its first-quarter earnings call, that the expected return of the Affordable Care Act’s health insurer fee (HIF) for 2020 is looming large.

Citi’s Ralph Giacobbe took up the issue of medical loss ratios (MLRs). He told investors that Humana’s “core retail MA segment posted an impressive quarter highlighted by better-than-expected MLR (85.2% vs consensus of 86.8%), an encouraging sign given softer MLR performance across most peers thus far and in light of the strong enrollment growth this year.”

Indeed, Humana raised its full-year 2019 individual MA membership growth guidance to a range of 480,000 to 500,000. Enrollment in its D-SNP increased by about 46,000 members.

Importantly, Humana’s “outsized member growth [of about 16%, double the market rate] doesn’t appear to be a mispricing stumble,” Jefferies analyst David Windley advised investors. And Oppenheimer & Co.’s Michael Wiederhorn said Humana’s “rapid growth continues to overshadow the looming HIF headwind for 2020.”

With Medicare Part D, Humana now expects a decline of 700,000 members this year in its stand-alone Prescription Drug Plan business, at the low end of the expected range, due to “slightly less disenrollment,” Humana Chief Financial Officer Brian Kane said.

Will CMS Price Transparency Proposal Create a ‘Floor’ for Pricing?

August 6, 2019

The Trump administration on July 29 issued a proposed rule that would require hospitals to publicly disclose payer-specific negotiated rates for all “items and services” they offer, such as procedures, supplies and facilities fees.

One expert tells AIS Health that a legal challenge from industry groups is all but certain if the rule is finalized.

By Leslie Small

The Trump administration on July 29 issued a proposed rule that would require hospitals to publicly disclose payer-specific negotiated rates for all “items and services” they offer, such as procedures, supplies and facilities fees.

One expert tells AIS Health that a legal challenge from industry groups is all but certain if the rule is finalized.

“They will undoubtedly get sued, and probably sooner rather than later,” says Dan Mendelson, founder of the consulting firm Avalere Health, says of the administration. The statute that CMS drawing upon with its proposal allows HHS to require that hospitals disclose their “usual rates,” he says, but doesn’t allow the agency to compel the disclosure of rates negotiated with insurers.

America’s Health Insurance Plans (AHIP), meanwhile, argued that revealing negotiated rates would cause providers to push prices higher.

Citing a 2015 blog post from Federal Trade Commission officials that makes a similar point, AHIP President and CEO Matt Eyles said in a statement that “multiple experts…agree that disclosing privately negotiated rates will make it harder to bargain for lower rates, creating a floor — not a ceiling — for the prices that hospitals would be willing to accept.”

In general, though, “the administration’s instinct, I think, is absolutely right — that consumers want this kind of information; they want cost information, and they want quality information,” Mendelson says.

Ben Isgur, the leader of PwC’s Health Research Institute, points out that “there’s another group out there that’s very interested in prices — and those are the employers.” If they had access to negotiated rates for hospital services, employers would have an easier time choosing lower-cost providers when setting up their health plans’ networks, he says.