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1. Trump is SERIOUS about Price Transparency.
Pricing Power.
Back in the March 11th 1st story, we touched on a proposed HHS rule that would force hospitals to post prices for the surgeries and procedures performed – the ACTUAL ones that they negotiate with insurers (not just the chargemaster rule that’s currently in effect). At that time, the HHS simply wanted comments and feedback on what might happen if that rule were to go into effect. Well, in an interesting turn of events, the Trump administration took that HHS proposal to another level this week by announcing its plan to increase pricing transparency a step further, as the WSJ reports. A LARGE step further.
What’s Trump proposing?
For one, Trump’s admin really wants insurance companies to publish the rates that they pay for healthcare services. They might even FORCE these companies (think UnitedHealth, Cigna) to do so. Secondly, the administration wants providers to be able to give patients the entire price of care they would receive BEFORE any treatments are performed, which is QUITE different from the ‘guesstimate’ that we all receive today after a doctor visit.
How could that change healthcare today?
There’s no telling what might happen if healthcare entered a free-for-all period and prices were disclosed everywhere. Some smaller players might realize they were getting ripped off from a payment perspective and demand higher rates, which might increase costs. From a common sense perspective, these rules would more than likely equip the patient to make more educated decisions on where to receive care. I mean, hopefully.
Eventually, providers would theoretically compete on prices like other industries (I’m no economist, though). But in markets where little to no competition exists (think rural), experts think the hypothetical pricing transparency rule would have little to no effect.
2. Wal-Mart gets picky with healthcare providers.
Picky providers and a quality first approach.
As a follow up to the WSJ’s story on Wal-Mart getting more selective with which providers they allow their employees to see, KHN revealed this week that Wal-Mart is also extending this selective practice to imaging centers. Basically, the retail giant is leveraging its data to see which diagnostic imaging centers are the most cost effective and deliver the highest quality care based on error rates and other factors. Then, the company delivers an approved list to its employees. A very interesting note: Wal-Mart and Covera (the company they’re partnered with on this stuff) chose the centers based on QUALITY – meaning that price was not a factor in the development of the Quality Centers List.
The larger trend.
Given how our healthcare system is structured with employer sponsored health plans, Wal-Mart and other large firms like GM have taken it upon themselves to combat rising healthcare costs. We could see this trend continue as employers move toward more narrow network-esque strategies, where poor-quality providers are given the boot from employer health plans.
3. The State of Washington just went public.
States going rogue.
The state of Washington has taken the initiative upon itself to enter the private health market with a universally available public option. The plan will be called Cascade Care, and it works as more of a ‘hybrid’ option between the public (think Medicare, Medicaid) and private (think employer sponsored plans) health plans currently out there. The plan would cap payments at 160% of Medicare for services rendered. As an aside, keep payment caps in the back of your head moving forward, because there have been plenty of references to capping payments at certain percentages of Medicare rates from state legislatures.
Is it really ‘Public’ though?
Yes and no. Although the state of Washington is offering the plan, it’s still going to be run by a private health insurance company of the state’s choosing (a la, Medicare Advantage). Overall, though, the plan is an interesting mixture of moving toward universal health coverage while also working within the current healthcare system. The jury’s still out as to whether it will help with costs, but most state officials think it’s a step in the right direction.
4. Big Pharma wins big on Medicare Part D final rule.
CMS Backs Off
CMS released its final Medicare Part D (the part of Medicare that covers drugs – D for drugs, get it??) ruling this week. In a resounding victory for drug-makers and pharmacy benefit managers, the agency maintained that Part D would continue to cover ALL drugs that are included in the 6 “protected classes,” which are categories of drugs that are required to be covered by Medicare. Prior to the announcement, that protection was in limbo.
CMS was actually considering whether or not to continue the 100% coverage, or replace the current system with a more flexible model where the agency would be able to exclude certain drugs. Instead, the agency decided to shelf the issue for another year.
Stop Gagging Me.
In other news, the final ruling included some additional guidelines around increased drug price transparency. CMS finally outlawed so-called Gag Clauses, where pharmacists were prevented from telling patients if the cash costs of a drug or similar drug happened to be lower than the price they were playing through their insurance (honestly, what even). Pharmacy groups weren’t happy, however, with CMS’ decision to hold off on changes to drug price concessions.
5. Senate and House get after surprise billing.
Congress began work on abolishing Surprise Billing once and for all by drafting legislation this week that would get rid of the practice for good.
Proposed House Bill.
The No Surprises Act, which is the nifty name for the proposed Surprise Billing bill (that’s a bit repetitive, sorry) drafted by the House, would ban surprise medical billing for good and set a minimum payment rate for out of network providers based on median geographical in-network payment rates for those ER services. Notably, this bill does not include an arbitration clause – where a third party arbitrator would negotiate a rate between providers and insurers for the out of network bill. Insurance companies would be the big winners if this bill were to pass.
Proposed Senate Bill with a Key Difference: Arbitration.
Essentially, the STOP Surprise Medical Bills Act is the same as the House bill, except that this bill includes arbitration. Hospitals and providers are more into the arbitration idea, but the Trump Administration opposes it, citing the potential for disruption, less pricing transparency, and increased administrative burden associated with arbitration.
Both branches think that some sort of Surprise Billing legislation will be ready to sign by Trump by the end of summer. Read our timeline of Surprise Billing in 2019 to catch up what’s been going on in 2019.
Quick Hits.
Civica RX, the nonprofit drugmaker joint venture, is targeting antibiotics as its first products to combat shortages and costs.
The hottest thing on the market: healthcare real estate.
Who might Walgreens try to acquire?
Gilead Sciences is under fire for trynna make its HIV drug a monopoly and stifling generic competition.
Some disgruntled worker decided to shut down Oregon’s Medicaid systems for a bit in 2016.
You wouldn’t believe it, but the CVS-Aetna merger review is still tied up in court.
So why did Amazon actually buy Pillpack?
AccentCare is getting acquired by PE Giant Advent International.
Interestingly, JP Morgan is getting into the healthcare payments business. The banking giant purchased InstaMed for $500 million this week.
The FDA finalized interchangeable biosimilar advice, with a focus on insulin.
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