Navvis Right Now: Issue 5 – October 26, 2018

October 26, 2018

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Care Delivery Models

At Least 40% of Medicare Advantage Plans to Offer Pop Health Benefits

(Healthcare Dive) At least 40% of Medicare Advantage plans will offer new types of supplemental benefits at no additional cost to beneficiaries in 2019, according to a new Avalere report. These new supplemental benefits include transportation to physician visits, over-the-counter drug coverage, adult day care services, in-home support, personal care services, social worker phone lines and wellness programs.

Takeaway: While the topline number looks significant, the definition of supplemental benefits includes things like nicotine replacement therapy. Only 10% of plans will provide caregiver support services (counseling and training courses for caregivers) and less than three percent of plans (107) will offer in-home support and personal care services. Avalere’s analysis also finds a significant increase in the number of plans offering supplemental benefits like home modifications (+36%) and transportation (+22%).

 

Value-Based Payment

Bundled Payment Program Fails to Reduce Medicare Spending, Does Drive Home Health Use

(Home Health Care News) The Model 2 track (episode includes the hospital admission, related physician services, and all services provided up to 90 days post-discharge) — the largest in the BPCI program in terms of episodes — cost Medicare $202.1 million between the fourth quarters of 2013 and 2016, or $268 per event, according to the new report, released health care consulting firm the Lewin Group. The Model 3 (episode includes all services provided up to 90 days post-discharge) initiative, meanwhile, resulted in an $85.2 million hit during that span, or $921 per episode. While total episode payments declined, the BPCI program lost money because of reconciliation payments to providers that met certain performance benchmarks. The Lewin Group placed specific blame on the Centers for Medicare & Medicaid Services’ (CMS) decision to eliminate providers’ downside risk. Under the program, providers could only share in any potential savings, but not face any monetary penalties for failing to perform.

Takeaway: The increase in spending is counter-intuitive based on early reports that Model 2 (particularly for hip and knee replacements) saved money. The fact the program cost CMS money stems from the fact that the initial phase of BPCI was “risk-free” meaning that CMS paid savings to providers if they were successful but didn’t require unsuccessful providers to repay CMS. CMS took steps to address this in BPCI-A by increasing the discount for all episodes to 3% (as opposed to just 2% for all episodes except for hip and knee) and eliminating the risk free period. Given the success of hip and knee replacement episodes, it’s possible we could see a mandatory lower joint replacement bundled implemented in the near future.

 

Direct-Contracting Won’t Hurt Advantage Business, CMMI Director Says

(Modern Healthcare) The CMS’ innovation director reassured insurers on Tuesday that their Medicare Advantage business shouldn’t be hurt by direct provider contracting ideas that the agency is considering to rework Medicare. According to Boehler, providers should take on more risk where they can and should. Medicare Advantage “is on a good growth trajectory,” Boehler said. “We all agree that not all of the Medicare population will go into MA. At least half the population will stay in fee for service.” Boehler also said he wants to see more plans use value-based insurance design, or V-BID, which uses low co-pays to nudge patients toward clinical care that’s considered better value. He said he would consider promoting the model for prescription drug plans and praised the administration’s Medicare Part B step therapy negotiation.

Takeaway: Based on his comments we should expect more flexibility in MA plan design (beyond the supplemental benefits in this year’s call letter and in 2020). The degree of latitude CMS provides in the future will depend on the administration, results from the V-BID demonstration, and early returns from plans that include supplemental benefits in their plan design.

 

Innovative Partnerships

CareLinx Partners with Lacuna Health

(Home Health Care News) National online home care service platform CareLinx and care management powerhouse Lacuna Health are teaming up in a new model that their top executives see as a boon for both businesses. CareLinx, which AARP recently named as a preferred provider for in-home care, connects seniors across the U.S. to its network of technology-enabled and thoroughly vetted caregivers. In addition to partnering with Lacuna — a wholly-owned subsidiary of Louisville, Kentucky-based Kindred Healthcare — San Bruno, California-based CareLinx is making moves to offer access to health, dental, vision and life insurance to its growing workforce of more than 300,000 caregivers.

Takeaway: Under the new model, CareLinx will couple its non-skilled caregiving capabilities with Lacuna’s care management solutions, providing added clinical components to keep high-risk patients in the lowest-cost setting: home.This further supports Humana’s ultimate strategy of delivering more care in a member’s home and reducing unnecessary utilization of facilities.

 

DOJ Clears CVS-Aetna Union

(Healthcare Dive) The Department of Justice said on Wednesday that it will not challenge the $69 billion merger of CVS and Aetna so long as the two divest Aetna’s Medicare Part D business. Aetna has already agreed to sell the business to a subsidiary of WellCare. The deal has already secured shareholder approval and is expected to be complete later this year.The deal is aimed at simplifying the healthcare experience for consumers demanding change. Together, CVS and Aetna have promised they will “remake the consumer health care experience.” CVS executives said its pharmacists will play a critical role influencing patient behavior, especially for those Aetna members with chronic conditions such as diabetes. By leveraging CVS MinuteClinics and referring patients to less expensive modes of care, together the two will attempt to bend the cost curve.

Takeaway: During Congressional hearings related to the merger CVS’s CMO suggested that it would expand the scope of services offered at its minute clinics to address a wider range of primary care and urgent care situations. And, in tandem with the Aetna merger CVS has acquired some of the people (former CMO of Iora Health), process (artificial intelligence platform to triage patients to the appropriate site of care), and technology (piloting MinuteClinic telehealth) components to develop a platform capability of providing both chronic disease management and routing Aetna members to lower cost sites of service. As it puts the pieces together in the coming months it will be interesting to see how and where it tests its new capabilities.

 

Regulatory and Legislative Issues

Trump Considers Sweeping Changes to Medicare Drug Prices

The administration recently released a draft of a proposal that uses Medicare’s innovation center to test three ways to lower the costs of drugs administered during care provided in outpatient settings— including negotiating for some drugs that are directly administered by doctors, in hopes of keeping them in line with the lower prices paid in many other countries. The proposal applies only to drugs administered in doctors’ offices and outpatient hospital departments — medicines like cancer treatments and injectable treatments for rheumatoid arthritis or eye conditions. The Trump administration also wants to experiment with letting private sector vendors negotiate with drug makers. That strategy is modeled on how health insurers negotiate drug prices in Medicare’s Part D program, which covers outpatient drugs for older Americans. Medicare would test this approach in certain geographic areas, where participation would be mandatory for physicians and hospitals. Not all drugs would be included in this test. CMS would focus on drugs made by just one company (which tend to be expensive) and biologic medicines, which make up a large share of Medicare Part B spending. Under the third branch of the strategy, officials would try changing incentives for doctors to prescribe drugs. Under Medicare’s current system, doctors often have incentives to prescribe more expensive drugs, because they get a fee based on the price. Changing that to a flat fee — instead of a percentage — could help nudge doctors to use less expensive medications.

Takeaway: While this is being reported in the press as a “proposed rule,” it is better thought of as a draft proposal that the Administration is releasing along with specific questions seeking feedback from stakeholders on key design features. The administration is “considering” releasing a proposed rule in the spring of 2019 with the Part B drug pilot (if finalized) to begin in 2020. On the surface, this looks similar in many ways to the previous administration’s attempt to control unnecessary utilization of high cost drugs when lower cost alternatives were available. The Obama administration aborted this proposal in the face of overwhelming resistance from the pharmaceutical industry, physicians, and hospitals. Where this draft proposal differs is it primarily focuses on reducing prices for Part B covered single source drugs, biologicals, and biosimilars (that comprise 90% of Medicare Part B spending on physician administered drugs) with some incentives for utilization of lower cost drugs where appropriate. Instead of reducing the amount paid by Medicare to providers for handling Part B drugs (e.g. Average Sales Price + 4.3% after the sequester) it would increase it to the full ASP +6% and pay it as a flat payment regardless of the cost of the drug selected. This may improve the draft’s chances of actually making it to implementation (if physicians and hospitals view a some form of flat payment calculated based on ASP+6% as acceptable) as it will remove resistance from two powerful DC lobbies. As of this morning (Fri, 10/26) the American Hospital Association issued a muted statement on the proposed draft and the American Association of Clinical Oncologists has not issued a comment.

 

 

Disclaimer: This blog includes content gathered from other published sources, not authored by Navvis, and is presented as information only. As with any news story, this information may have changed since its publication date. Commentary included with the information is the opinion of its authors, and is not indented to provide legal or regulatory advice or guidance to the reader. Navvis does not represent the accuracy of or assume liability for the content presented herein.