Radar on Medicare Advantage

More Than 80% of Medicare Advantage Enrollees Are in High Star Plans, CMS Reports

October 21, 2019

According to CMS’s recent release of the 2020 star quality ratings, many Medicare Advantage beneficiaries continue to enroll in plans with 4 or more stars. There was also a notable shift of membership into highly rated Prescription Drug Plans, some of which made meaningful improvements on an individual basis even though PDP performance on average was stagnant.

More than half of Medicare Advantage Prescription Drug plans (210 contracts) that will be offered in 2020 earned overall star ratings of 4 or higher, compared with 46% of MA-PDs (172 contracts) offered in 2019, CMS reported on Oct. 11. Weighted by enrollment, approximately 81% of MA-PD enrollees are currently in contracts that will have 4 or more stars in 2020, up from about 75% in 2019.

By Lauren Flynn Kelly

According to CMS’s recent release of the 2020 star quality ratings, many Medicare Advantage beneficiaries continue to enroll in plans with 4 or more stars. There was also a notable shift of membership into highly rated Prescription Drug Plans, some of which made meaningful improvements on an individual basis even though PDP performance on average was stagnant.

More than half of Medicare Advantage Prescription Drug plans (210 contracts) that will be offered in 2020 earned overall star ratings of 4 or higher, compared with 46% of MA-PDs (172 contracts) offered in 2019, CMS reported on Oct. 11. Weighted by enrollment, approximately 81% of MA-PD enrollees are currently in contracts that will have 4 or more stars in 2020, up from about 75% in 2019.

Given that there were no substantial changes to the star measures in terms of weights or calculations this year, MA-PDs’ performance on average is “good evidence that the industry did a great job teaching to the test,” observes Melissa Smith, senior vice president of strategy and stars with Gorman Health Group.

Meanwhile, the percentage of enrollees in a PDP rated 4 or higher increased from a meager 3.5% in 2019 to approximately 28% for 2020 based on current enrollment, and the average star rating for PDPs rose from 3.34 in 2019 to 3.5 in 2020.

Individually, PDPs showed some significant performance increases, which Smith says may be attributable to pharmacy benefit managers “having really aligned services and offerings around their customers’ Part D star measure needs.”

On a measure level, MA-PDs showed improvements on 13 out of 33 Part C measures. And on the Part D measures, MA-PDs improved on eight measures, including on the three medication adherence measures. PDPs, meanwhile, performed better on average on 11 out of 14 measures.

PhRMA, Conservatives Criticize Pelosi Drug Pricing Legislation

October 9, 2019

Although there is bipartisan support for drug pricing reform and recent bills introduced in the House and the Senate share some concepts, conservatives and pharmaceutical manufacturers have found plenty to dislike about the drug pricing legislation unveiled in September by House Speaker Nancy Pelosi (D-Calif.).

In addition to restructuring the Part D benefit to include an out-of-pocket cap, the Lower Drug Costs Now Act (H.R. 3) would allow the HHS secretary to negotiate drug prices for at least 250 drugs where there is no effective competition. Manufacturers would be subject to certain transparency requirements and a “noncompliance fee.” Moreover, the bill would require that the negotiated price should be no more than 1.2 times the weighted average of the price in six other countries.

By Lauren Flynn Kelly

Although there is bipartisan support for drug pricing reform and recent bills introduced in the House and the Senate share some concepts, conservatives and pharmaceutical manufacturers have found plenty to dislike about the drug pricing legislation unveiled in September by House Speaker Nancy Pelosi (D-Calif.).

In addition to restructuring the Part D benefit to include an out-of-pocket cap, the Lower Drug Costs Now Act (H.R. 3) would allow the HHS secretary to negotiate drug prices for at least 250 drugs where there is no effective competition. Manufacturers would be subject to certain transparency requirements and a “noncompliance fee.” Moreover, the bill would require that the negotiated price should be no more than 1.2 times the weighted average of the price in six other countries.

Speaking at AHIP’s 2019 National Conference on Medicare, held Sept. 23-24 in Washington, D.C., American Action Forum President Douglas Holtz-Eakin called H.R. 3 a “terrible bill” and said the structure of an upper limit and a noncompliance penalty is not negotiation but is “price fixing and extortion.” He also argued that its proposed inflation rebate would only incentivize manufacturers to create high launch prices.

Also speaking at the conference, PhRMA Senior Vice President for Policy and Research Jennifer Bryant said that while Pelosi’s bill is being presented as a “benign and fairly incremental approach,” the proposed structure is “not actually one of negotiation at all and is about tying prices in the U.S. to prices internationally.” Moreover, she challenged AHIP, which released a statement in support of the Pelosi bill, to make a case for an “alternative that reduces costs through competition.”

Meanwhile, Pelosi advisor Wendell Primus made a last-minute appearance at the conference to outline the bill and express the speaker’s confidence that it could come to a Senate vote by the end of October.

CMS Projects Record-High Medicare Advantage Enrollment in 2020

October 7, 2019

2020 is shaping up to be another competitive year for the Medicare Advantage program, which will feature an additional 600 plan choices and a continued decline in the average monthly premium. With its annual release of the so-called landscape files for the MA and Part D programs, CMS on Sept. 24 said it expects MA enrollment to reach an all-time high of 24.4 million in 2020, up 10% from the current enrollment of 22.2 million.

By Lauren Flynn Kelly

2020 is shaping up to be another competitive year for the Medicare Advantage program, which will feature an additional 600 plan choices and a continued decline in the average monthly premium. With its annual release of the so-called landscape files for the MA and Part D programs, CMS on Sept. 24 said it expects MA enrollment to reach an all-time high of 24.4 million in 2020, up 10% from the current enrollment of 22.2 million.

For 2020, the average monthly MA plan premium will drop by 14% to an estimated $23, the lowest average monthly premium since 2007. As the Affordable Care Act health insurer fee (HIF) returns in 2020, CMS’s bullish enrollment outlook “indicates most plans are prioritizing stability of benefits and enrollment,” observed securities analyst Michael Newshel in a Sept. 24 research note from Evercore ISI.

According to data released alongside the 2020 MA and Part D landscape files, beneficiaries will have an average number of 39 plan choices per county, CMS estimated. Moreover, CMS said there are about 1,200 more MA plans operating in 2020 than in 2018.

According to estimates from Citi Research, there will also be a substantial rise in the number of plans with a $0 monthly premium, with Centene Corp. showing the greatest increase (56%) in $0 premium offerings.

Meanwhile, the Special Needs Plan (SNP) market will continue to expand. According to estimates from Chicago-based consulting firm Clear View Solutions, LLC, there are 171 net new SNP plan IDs, up from 60 net new plans in 2019. In addition, the number of stand-alone Prescription Drug Plan offerings will rise from 1,369 in 2019 to 1,433 next year.

Medicare beneficiaries may begin perusing their 2020 coverage options on Oct. 1. Open enrollment begins on Oct. 15 and ends on Dec. 7.

Industry Groups Praise OIG Report on Medicare Part D Rebates

September 26, 2019

Industry trade groups that would like rebates preserved in the Medicare Part D purchasing system were thrilled to see a Sept. 13 report from the HHS Office of Inspector General that they viewed as dispelling the oft-purported “myth” that rebates are responsible for high drug prices.

The report examining the more than 1,510 brand-name drugs with Part D reimbursement and rebates between 2011 and 2015 found that rebates did not always go up when unit reimbursement grew.

By Lauren Flynn Kelly

Industry trade groups that would like rebates preserved in the Medicare Part D purchasing system were thrilled to see a Sept. 13 report from the HHS Office of Inspector General that they viewed as dispelling the oft-purported “myth” that rebates are responsible for high drug prices.

The report examining the more than 1,510 brand-name drugs with Part D reimbursement and rebates between 2011 and 2015 found that rebates did not always go up when unit reimbursement grew.

The report also observed that total rebates for brand-name drugs reviewed in Part D rose from $9 billion in 2011 to $17 billion in 2015, but the majority (60%) of that rebate growth was driven by only 10% of drugs. Furthermore, OIG said that while rebates substantially reduced overall Part D spending growth, “they did not prevent increased overall Part D spending…as Medicare still spent $2 billion more for brand-name drugs with rebates in 2015 than in 2011.”

America’s Health Insurance Plans issued a statement from President and CEO Matt Eyles: “This new HHS-OIG report…clearly demonstrates our effectiveness as a negotiator — and the rebates we secure for seniors in Part D lead to lower costs.”

The Pharmaceutical Care Management Association also praised the report for putting to rest “the false narrative about PBM-negotiated rebates” and confirming that rebates lead to lower prescription drug costs in Part D.

But one industry expert says he doesn’t think this will alter any possible government action on drug pricing and Part D.

“The OIG’s analysis is unfortunately a historical document — in that it only reports on changes in drug prices through 2015,” observes Avalere Health Founder Dan Mendelson. And while rebates are “an important market mechanism” for negotiating drug prices, rebates “alone won’t solve the consumer crisis of drug affordability,” he says.

New Medicare Advantage Codes, Supplemental Benefits May Improve Dementia Treatment

September 23, 2019

With the addition of two new codes to the Medicare Advantage risk adjustment payment system and expanding flexibility in MA benefit design, Alzheimer’s disease advocates are hopeful that such changes will lead to increased diagnoses, improved treatment and greater awareness of clinical trials for disease-modifying therapies.

Starting Jan. 1, 2020, CMS will incorporate into its risk score calculation for MA plans an alternative payment condition count model that includes additional Hierarchical Condition Category (HCC) codes for dementia: HCC51 — Dementia With Complications and HCC52 — Dementia Without Complications.

By Lauren Flynn Kelly

With the addition of two new codes to the Medicare Advantage risk adjustment payment system and expanding flexibility in MA benefit design, Alzheimer’s disease advocates are hopeful that such changes will lead to increased diagnoses, improved treatment and greater awareness of clinical trials for disease-modifying therapies.

Starting Jan. 1, 2020, CMS will incorporate into its risk score calculation for MA plans an alternative payment condition count model that includes additional Hierarchical Condition Category (HCC) codes for dementia: HCC51 — Dementia With Complications and HCC52 — Dementia Without Complications. Plans will therefore have a financial incentive to capture the appropriate diagnosis codes, and by assigning equal weights to the two codes, CMS has minimized the chance of upcoding, observes Catherine Murphy-Barron, a principal and consulting actuary with Milliman.

“I think anytime you add conditions to the HCC, obviously it gets a higher priority. From an MA-PD plan perspective, coding is crucially important to its success, and part of the challenge with dementia is that it’s not always coded,” Murphy-Barron points out.

John Dwyer, president and founding board member of the Global Alzheimer’s Platform, says his organization is hopeful that the availability of new MA supplemental benefits and the new risk adjustment codes will do more to raise awareness of dementia treatment options, including enrolling in clinical trials, since one of the biggest challenges with drug research and development is recruitment.

At the same time, MA organizations may be able to use newly expanded supplemental benefits to address brain health.

“Memory fitness programs are a largely undefined nonspecific clinical benefit that plans are starting to slowly roll out,” explains Dwyer. These could range from discounts to online “brain training” exercises that are incorporated into a fitness or overall wellness benefit to something more substantial that is dedicated to brain health.