This Week in Managed Care: June 21, 2019

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This week, the top managed care news included a report finding slow progress in reducing low-value care; a study finding savings by accountable care organizations may be overstated; CMS proposing a rule to allow for electronic prior authorization in Part D drugs.


A report finds more talk than action against low-value care, a study finds the savings by accountable care organizations (ACOs) may be overstated, and CMS wants electronic prior authorization for Part D drugs.

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

Slow Progress in Reducing Spending on Low-Value Services

For all the discussion about cutting spending on unnecessary medical care, getting rid of low-value care isn’t easy, a new report has found. The Research Consortium for Health Care Value Assessment said this week that between 2014 and 2016, spending on 5 high-value services rose 17%. But spending on low-value services went up, too, by 2%.

The 5 low-value services included in the analysis, which were identified by the Value-Based Insurance Design Task Force on Low-Value Care, were:

  • Vitamin D screening tests
  • Prostate-specific antigen screening for men over age 75
  • Unneeded tests and labs prior to low-risk surgery
  • Imaging for uncomplicated low back pain within 6 weeks of diagnosis
  • Using a brand-name drug when a generic substitute is available

The use of brand-name drugs over generics accounted for $1.5 billion of $3 billion in unnecessary spending, while vitamin D testing cost $616 million.

Said Corwin Rhyan, MPP, a senior analyst at Altarum and lead author of the paper: “Our findings suggest that even though there has been significant discussion on reducing low-value care services in the system, to date, the reduction has been relatively modest. However, the increase in spending on the selected high-value services is a positive indicator and presents an opportunity for future measurement and analysis.”

Savings of Medicare Shared Savings Program ACOs May Be Overstated

A new study in the Annals of Internal Medicine challenges a major tenet of healthcare transformation: that the Medicare Shared Savings Program (MSSP) has helped ACOs save money and improve quality of care. With more than 900 contracts that cover 32 million lives in the United States, ACOs have been the chief vehicle for shifting away from fee-for service reimbursement, and CMS has used MSSP as the carrot to fuel their existence.

But the investigators in the study who examined Medicare claims, total spending, 4 quality indicators, and hospitalization for hip fractures, found results suggest the apparent success of ACOs may have been driven by pushing out high-cost physicians and their patients. The National Association of ACOs has reported that the MSSP has said the government $542 million since 2013.

The group issued a response: “This paper is not an indictment of the real savings ACOs have generated, but further evidence of how the model is unfolding. We know ACOs on the whole are saving Medicare money.”

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CMS Proposes Electronic Prior Authorization for Part D Drugs

CMS wants to update electronic prescribing standards to make it easier for Medicare beneficiaries to get prescriptions. A new rule proposed this week would allow clinicians to complete prior authorizations online through a streamlined process. CMS said clinicians who choose the electronic option can complete prior authorization in real time before a prescription is sent to the pharmacy. The hope is that seniors will no longer get to the counter and find out their prescription cannot be filled.

Said CMS Administrator Seema Verma, MPH: “Improving patients’ access to prescription drugs is a top priority for CMS. The proposed rule would reduce the time it takes for a patient to receive the needed medications and ease the prescriber burden by giving clinicians the flexibility and choice to complete prior authorization transactions electronically.”

FDA Approves Liraglutide for Youth With Type 2 Diabetes

Novo Nordisk’s liraglutide received FDA approval this week for pediatric patients as young as age 10 who have type 2 diabetes. FDA’s action marks the first approval for a new type 2 diabetes drug in youth since the approval of metformin nearly 20 years ago.

The need for new treatments is driven by rising childhood obesity, and liraglutide is known to also help patients lose weight. A study published by the National Institutes of Health found that rates of type 2 diabetes in youth up to age 19 had climbed 4.8% between 2002 and 2012.

Nutrition Program Found to Lower Obesity Rates for Young Children

However, another report this week offers hope that childhood obesity could move in the other direction. A research letter in JAMA states that obesity rates for toddlers enrolled in the Women, Infants and Children’s nutrition program (WIC) have remained lower since a decline was first reported in 2014. The drop is believed to be linked to changes that require healthier foods in the WIC package.

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Seema S. Sonnad Emerging Leader in Managed Care Research Award

Finally, do you know an emerging leader in managed care?

Each year, The American Journal of Managed Care® presents the Seema S. Sonnad Emerging Leader in Managed Care Research Award to recognize an individual whose early achievements in managed care demonstrate the potential for making a long-term contribution as a leader in the field.

We are accepting nominees now who must be:

  • Less than 5 years from the receipt of their highest degree
  • Less than 7 years from their first full-time position.

We are accepting nominations through June 30. For information on nominations, visit

For all of us at the Managed Markets News Network, I’m Laura Joszt.