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This Week in Managed Care: April 5, 2019

This week, the top managed care news included courts rejecting multiple health initiatives from the Trump administration; Congress heard more about rising insulin prices; a new agreement seeks standards for reporting social determinants of health.


Courts reject Trump’s steps on healthcare, Congress hears more about rising insulin prices, and a new agreement seeks standards for reporting social determinants of health.

Welcome to This Week in Managed Care, I’m Laura Joszt.

Judges Weigh In on Trump Administration Initiatives

Federal judges overturned key healthcare initiatives from the Trump administration last week, adding more uncertainty to the marketplace.

First, a judge in the District of Columbia circuit said Medicaid work requirements for Arkansas and Kentucky violate the 1965 law that created the healthcare program for the poor.

Judge James Boasberg said CMS must rework the rules for Arkansas, where 16,000 people have lost coverage. He wrote: “The disruption of Arkansas's administration of its Medicaid program must be balanced against the harms that plaintiffs and persons like them will experience if the program remains in effect.”

Kentucky’s rules have yet to take effect but are projected to remove 95,000 people from Medicaid. Boasberg wrote that federal officials showed no proof that the program would save the state money, even though Kentucky’s governor cited budget constraints in calling for beneficiaries to work or volunteer for 80 hours per month.

Another ruling this week struck down Trump administration rules that expanded association health plans, with a federal judge ruling that they were “clearly an end-run” around the Affordable Care Act. The rule enacted last year let small businesses and self-employed people band together to create plans that do not fully comply with the law.

US District Judge John D. Bates agreed the administration violated decades of precedent under the Employee Retirement Income Security Act of 1974, known as ERISA, saying the new rules unlawfully expanded the term “employer.”

New York State Attorney General Letitia James, who led the challenge by 10 states, called the ruling an “historic win,” saying, “We are pleased that the District Court saw past the Trump Administration’s transparent effort to sabotage our healthcare system and gut these critical consumer protections in the service of its own partisan agenda. This victory will help ensure better healthcare for millions nationwide.” 

The rulings on Medicaid and association health plans come as a new Gallup poll finds that 55% of Americans worry a great deal about their healthcare. It is the fifth year that healthcare has topped Gallup’s list of issues that worry Americans.

Vials of insulin

A patient brought vials of insulin to a House subcommittee this week to illustrate how the price of this essential medication for people with type 1 diabetes has skyrocketed in recent years.

Members of the Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce heard that 4 vials of insulin that cost $5 in the 1970s now cost $1400.

William Cefalu, MD, of the American Diabetes Association told the committee the system of rebates drives up insulin prices and works against patients. He said, “It is unclear precisely how the dollars flow and how much each intermediary profits. Those profits stem from rising list prices, which are set by drug manufacturers; rebates negotiated by pharmacy benefit managers rise, as well, but they are not passed on to the patient.”

The day of the hearing, FDA announced a May 13 hearing to discuss its transition of follow-on insulins to a regulatory pathway for biosimilars.

Insulin prices have received attention from both parties in hearings in Congress this spring.

Collaboration on Social Determinants of Health

The American Medical Association and United Healthcare this week announced an agreement to leverage data to address social determinants of health.

The physicians’ group and the insurer will work together to standardize how data on these factors are collected, processed, and integrated to make it easier for providers to collect information and to help them use it to improve patients’ lives.

The 2 groups will support adding 24 new codes related to social determinants of health to the International Classification of Diseases, Tenth Revision, known as ICD-10.

Said Bill Hagan of United Healthcare, “By working together to leverage data, technology, and the incredible expertise of our network physicians, we can more effectively address the social factors that limit access to healthcare.”

Louisiana's HCV Netflix-Style Treatment

Louisiana’s health commissioner has reached a deal to use a “Netflix” subscription model to provide treatment for the hepatitis C virus to patients in the state’s Medicaid program and corrections system.  Rebekah Gee, MD, MPH, FACOG, announced the selection of a Asegua Therapeutics, a generics subsidiary of Gilead Sciences, as the state’s partner in the program, which is scheduled to begin July 1.

Under this model, Louisiana will pay a subscription fee for unlimited access to the drug to treat as many patients as it can for 5 years. The state hopes to treat 10,000 patients, up from the 1000 it treated in 2018.

Said Gee, “The next step is to complete the contract between Asegua and our agency. We were extremely pleased that 3 manufacturers offered proposals, with the plan submitted by Asegua offering us a clear path forward to offer a hepatitis C cure to our most vulnerable patients.”

Diabetes Test Strip Program

The revolution in continuous glucose monitoring and the near collapse of CMS’ competitive bidding program for glucose test strips are featured in the current issue of Evidence-Based Diabetes Management™ (EBDM).

The cover story and an accompanying editorial from Robert Gabbay, MD, PhD, FACP, discuss how a bidding program to promote competition in Medicare supplies has gone awry, leaving many beneficiaries with no testing supplies.

The report in EBDM found:
  • CMS has allowed test strip contracts to expire
  • Contractors have left the market because prices are below cost
  • About 10 suppliers who are left control 98% of the market
Read the full article.

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