Health Care Matters | June 28, 2024
Federal Court Ruling Preserves ACA Preventive Care Mandate…For Now
The 5th U.S. Circuit Court of Appeals issued a decision last week reversing portions of a lower court decision that, if upheld, would have prevented the federal government from enforcing ACA requirements for coverage of preventive services at no cost to patients. The case (Braidwood Management v. Becerra) involves a Texas company suing HHS over the requirement to cover preexposure prophylaxis (PrEP) for HIV prevention. The lower court decision from March 2023 took a broad stance that recommendations from the U.S. Preventive Services Task Force (USPSTF) made after 2010 do not need to be complied with and blocked the federal government from enforcing USPSTF recommendations. According to analysis from Bloomberg Law, the lower court decision would have barred HHS from enforcing the mandates throughout the country. Instead, the appeals court limited the ruling only to plaintiffs like Braidwood Management, agreeing that they do not have to keep paying for the services. However, the appeals court also directed the lower court to reassess whether proper administrative process was followed in implementing the mandates.
Why It Matters
There are three entities that approve services for inclusion on the list of preventive services that must be covered without patient cost sharing under most private plans: USPSTF, the Health Services and Resource Administration (HRSA), and the Advisory Committee on Immunization Practices (ACIP). The court ruling focuses on the USPSTF recommendations but there is a possibility that the lawsuit may be amended to assess the legality of all the recommendations, which could put the entirety of the preventive service mandate at risk. For now, the requirements to cover preventive services remain in place but we have likely not heard the end of this legal and political battle and many predict this case will ultimately be heard by the US Supreme Court.
CMS Recalculating Star Ratings for all MA Plans
Both SCAN Health Plan and Elevance won lawsuits against CMS regarding the way in which MA 2024 Star Ratings were calculated using the Tukey outlier method. Based on the court's ruling, CMS told plans that it would recalculate 2024 Star Ratings for all plans, using the published 2023 Star Rating cut points, in which the Tukey outliers were not excluded. CMS will hold plans harmless if there is a decline in rating upon recalculation, using whichever score is more favorable to the plan. CMS is also allowing plans to submit updated 2025 bids by today, Friday, June 28.
Why It Matters
Updated Star Ratings can mean higher bonus payments for many MA plans at a time when insurers report facing headwinds from increased competitive pressures, rising costs, and disadvantageous changes to the program around policies like risk adjustment. As a greater share of the Medicare population chooses MA, CMS has increased focus on costs as well as ensuring program compliance and quality of care for seniors. While shares of major insurers rose after these court rulings, CMS has not yet indicated whether changes will be made for 2025 and will likely be redoubling efforts to reign in program spending and ensure that next year's rule can withstand any court challenges.
CMS Releases Quarterly List of Coinsurance Reductions for Part B Drugs
This week, CMS released the quarterly list of 64 drugs for which patients will pay a reduced coinsurance rate covered by Medicare Part B. The reduction in coinsurance for these drugs applies from July 1 through September 30, 2024. These reductions are due to the Medicare Rebate Program authorized under the Inflation Reduction Act (IRA), which adjusts patient coinsurance when a drug company increases prices for Part B covered drugs at a rate faster than inflation.
Why It Matters
For Medicare patients who use the drugs in question and don't have additional coverage that would cover their financial responsibility, these adjustments will reduce their coinsurance by anywhere from $1-$4,593 per day. In addition to the Medicare inflation rebate program, the IRA instituted a number of policies targeting the cost of prescription drugs. The law expanded eligibility for full benefits under the Low-Income Subsidy (LIS) program in Medicare Part D, capped insulin costs at $35 per month for Medicare patients as of January 2023, capped annual out-of-pocket spending for Medicare Part D enrollees at $2000 beginning in 2025 and has begun negotiating the price of certain high cost drugs with manufacturers. The first cycle of negotiated prices is set to go into effect in 2026. Prescription drug costs is a key focus of the Biden administration. Due to limited leverage, most policy efforts have focused solely on the Medicare program. As these new regulations go into effect, it will be important to watch how manufacturers adjust pricing in other lines of business.
WHAT WE ARE READING
Transforming Maternal Health (TMaH) Model NOFO
CMS released the Notice of Funding Opportunity (NOFO) for its new TMaH Model. Interested state Medicaid agencies have until September 20, 2024 to apply.
WHAT WE ARE Listening To
Tradeoffs Podcast
This week’s episode discusses the potential support for caregivers offered by CMS’ GUIDE Model
