Health Care Matters | July 19, 2024
Feds Tackle Dialysis Giants with Antitrust Probe
Politico published an article this week noting that earlier this year, the Federal Trade Commission (FTC) began investigating DaVita and Fresenius Medical Care, the two dominant dialysis companies in the country, due to allegations of preventing smaller competitors from entering the market. The primary focus of the investigation is on noncompete contracts that these organizations ask their clinic’s medical directors to sign. DaVita and Fresenius control approximately 70% of the outpatient dialysis market. As the home dialysis model expands and new companies are created, these clauses can hamper their ability to scale.
Why It Matters
The FTC has attempted to ban noncompetes nationwide and certain states (DE, RI, MA) have focused on banning them specifically for physicians as they can create monopolies that limit patient choice and drive up health care prices. The current FTC ban is held up in a Texas court, but that does not stop the agency from examining these agreements on a case-by-case basis. FTC examinations take time and noncompetes are a specific focus of Lina Khan, the Biden Administration's FTC Chair. A change of administration could affect how vigorously this particular anti-competitive practice is examined and enforced by the agency.
CMS Releases Revised MA Star Ratings
Following two federal judges’ rulings that CMS erred in calculating Medicare Advantage (MA) star ratings for 2024, CMS has recalculated the ratings and released the results. Results revealed 60 MA plans have a higher rating than what was originally released with 13 plans surpassing the four-star threshold. The jump to four stars allows plans to receive a 5% quality bonus adjustment for 2025 and a benchmark increase.
Why It Matters
This is a temporary reprieve for some MA plans that reported facing strong headwinds due to changes in star ratings calculations and a phase in of the v28 risk adjustment model. CMS will almost certainly correct their mistake in the next rulemaking cycle and properly include details of the Tukey method meant to improve the stability of quality measure cut points to calculate star ratings. While insurers have been reporting increased costs for MA beneficiaries, KFF reported that the MA market had the highest margins of any health insurance program last year. MA plans had the option to resubmit bids for the 2025 plan year based on revised star measures. Many had previously slashed benefits to account for the reduced revenue and may now rethink that strategy in the competitive MA marketplace while contemplating what the future may hold.
What We Are Digesting
More on the Recently Released Proposed 2025 Medicare Physician Fee Schedule
Following the release of the Proposed 2025 Medicare Physician Fee Schedule last week, many sources have provided useful information on the release.
Stay tuned for Coral’s insights on the PFS. Until then, look to these key sources:
WHAT WE ARE LISTENING TO
Health Affairs Podcast
Liz Fowler, Deputy Administrator and Director of CMMI discusses the future of health care payment, CMMI's specialty care strategy, mandatory models versus voluntary alternative payment models, and CMS' newly-proposed Medicare Physician Fee Schedule for 2025.
