Trends in Hospital Prices Paid by Private Health Plans Varied Substantially Across the US
Health Affairs recently published an article in the Health Affairs Journal. The article dives into trends in hospital prices paid by private health plans. The article finds that commercial health plans pay higher prices than public payers for hospital care. The authors use data from the Healthcare Provider Cost Reporting Information System, to describe how commercial hospital payment rates changed relative to Medicare rates from 2012-2019 and how trends differed by hospital referral region. The authors found that average commercial-to-Medicare price rations were relatively stable, but varied substantially across hospital referral region. Among the higher hospital referral region with high price rations in 2012, ratios increased by 38 percentage points in regions in the bottom quartile. These findings suggest that restraining the growth rate of hospital referral region commercial hospital price ratios to the national average during the sample period would have reduced aggregate spending by $39 billion in 2019. Please click here to read the article (subscription required)
- Close gaps in health care access, quality, and outcomes for underserved populations.
- Promote culturally and linguistically appropriate services to ensure understandable and respectful care and services that are responsive to preferred languages, health literacy, and other diverse communication needs.
- Build on outreach efforts to enroll eligible people across Medicare, Medicaid/CHIP and the Marketplace.
- Expand and standardize the collection and use of data, including on race, ethnicity, preferred language, sexual orientation, gender identity, disability, income, geography, and other factors across CMS programs.
- Evaluate policies to determine how CMS can support safety net providers caring for underserved communities, and ensure care is accessible to those who need it.
- Ensure engagement with and accountability to the communities served by CMS in policy development and the implementation of CMS programs.
- Incorporate screening for and promote broader access to health-related social needs, including greater adoption of related quality measures, coordination with community-based organizations, and collection of social needs data in standardized formats across CMS programs and activities.
- Ensure CMS programs serve as a model and catalyst to advance health equity through our nation’s health care system, including with states, providers, plans, and other stakeholders.
- Promote the highest quality outcomes and safest care for all people through use of the framework under the CMS National Quality Strategy.
Recently, HHS, through the Health Resources and Services Administration (HRSA), announced the availability of nearly $90 million in American Rescue Planning funding to support new data-driven efforts for HRSA Health Center Program-supported health centers and look-alikes (HRSA-designated health centers) to identify and reduce health disparities. HRSA’s new data collection and reporting initiative, called Uniform Data System Patient-Level Submission (UDS+), aims to collect more and better data on social determinants of health, while also streamlining and improving data quality reporting for health centers. Funding can be used for various COVID-19 activities and for modifying, enhancing, and expanding health care services and infrastructure by improving health information technology, enhancing data collection, and supporting related staff training. Applications are due in HRSA’s Electronic Handbooks by 5:00 p.m. ET on Monday, May 23, 2022. Visit the American Rescue Plan UDS+ Supplemental Funding technical assistance webpage for the notice of funding opportunity, technical assistance information, and other resources.
Recently, the Department of Health and Human Services gave public notice of their intention to move the Advanced Research Projects Agency for Health (ARPA-H) to the National Institutes of Health. In the FY 2022 Appropriations Act, Congress funded the agency but was silent on where to house the agency. Over the last few months, HHS has debated whether to place ARPA-H as a sub-agency within NIH or as an independent agency. Many members of Congress including, Senate HELP Committee Chairman Patty Murray (D-WA) and Ranking Member Sen. Richard Burr (R-NC) have argued for ARPA-H to stand alone as independent of NIH. Currently, before Congress there is legislation that would reverse this move by HHS and place ARPA-H as an independent agency. This legislation is currently being debated and may pass later this year with the various FDA User Fee Amendment bills.
The Congressional Tri-Caucus (made up of the Congressional Black Caucus, the Congressional Hispanic Caucus, and the Congressional Asian Pacific American Caucus) released a letter to the White House and Congress. Congressional Tri-Caucus leaders urged for provisions from Build Back Better to be included in the future economic reconciliation package to protect Medicaid beneficiaries – especially Black, Latino, and Asian people enrolled in the program. This letter comes days after the public health emergency (PHE) was extended for another 90 days, through July 2022. Tri-Caucus leaders highlighted four policies from Build Back Better to help expand and protect health care coverage:
- Require states to provide 12 months of continuous Medicaid and Children’s Health Insurance Program (CHIP) eligibility to children
- Require states to provide 12 months of Medicaid and CHIP postpartum coverage
- Permanently fund CHIP including policies that make it easier for kids to enroll in coverage
- Permanently close the Medicaid coverage gap in states that have not elected to expand coverage
The Better Medicare Alliance released a report that compares Medicare Advantage (MA) plans to fee-for-service (FFS) Medicare on cost protections across income, disability, race, and ethnicity. The data brief found that on average, MA beneficiaries report spending nearly $2,000 less on out-of-pocket costs and premiums compared to Medicare FFS. Furthermore, MA beneficiaries were found to spend less across all racial and ethnic groups. The brief also found that Medicare FFS beneficiaries were nearly twice as likely to be cost burdened compared to MA beneficiaries, even when only looking at low-income beneficiaries. The brief notes that populations enrolled in MA and Medicare FFS are clinically similar, with comparable functional impairments and support needs. Beneficiaries in both programs also report similar levels of satisfaction in their care.
The Medicaid and CHIP Payment and Access Commission (MACPAC) released its response to a request for information (RFI) from CMS on access and coverage in Medicaid and CHIP programs. The letter covers a wide range of access-related topics, including enrolling and maintaining coverage, accessing services, and ensuring adequate payment rates. At the beginning of the letter, MACPAC underscores the need for CMS to maintain an equity focus in all aspects of its work to examine and improve access to care. CMS efforts should include a focus on beneficiaries who are especially vulnerable to poor health outcomes when experiencing barriers to care, such as children with special health care needs, people with disabilities, sexual and gender minorities, and people of color. MACPAC also encourages CMS to be transparent in its actions by releasing data and actively engaging stakeholders. The letter also includes discussion of the following topics:
- Encourages CMS to draw from MACPAC’s prior research showing that simplification, including use of electronic data sources and automating certain processes, can lead to administrative savings and streamlined procedures.
- Recommends CMS encourage states to use available options to promote coverage, such as 12-month continuous eligibility and modes of evidence-based communication that meet the needs of beneficiaries.
- Highlights the need for state and federal officials to have timely and consistent information on beneficiary access and encourages CMS to consider feasibility and appropriateness of minimum payment standards for certain services, such as vaccines.
- Recommends CMS consider ways to streamline provider enrollment processes to ease administrative burden and promote participation
The Journal of American Medicine recently published a study finding that private insurers agree to pay hospitals for cancer drugs that are often at least double what the hospital paid to acquire the drugs. Last year, researchers designed a cross-sectional analysis of private payer-specific negotiated prices for the top 25 parenteral (injectable or infusible) cancer therapies by Medicare Part B spending in 2019 using publicly available hospital price transparency files. Of the 61 National Cancer Institute-designated cancer centers providing clinical care to adults with cancer, 27 (44.3%) disclosed private payer-specific prices for at least 1 top-selling cancer therapy as required by federal regulations. The median drug price markup across all NCI centers and payers ranged between 118.4% (sipuleucel-T) and 633.6% (leuprolide). The study further adds to the public discourse surrounding the cost of prescription drugs, particularly Medicare Part B-covered drugs. Recently, MedPac continued their discussion over ways to reform the way in which Medicare Part B pays and reimburses for Part B drugs. Further, Congress is continuing to debate measures to reform drug pricing.
The Commonwealth Fund recently released a paper analyzing a number of pharmacy benefit manager (PBM) reforms Congress is considering to address the high cost of prescription drugs. PBMs, the third-party administrators that handle prescription drug benefit programs for health plans and employers have garnered significant scrutiny over the years for the role they play in the drug pricing supply chain. The Commonwealth Fund outline a variety of policy proposals to reform the PBM industry, including:
- The Elijah Cummings Lower Drug Costs Now Act
- The Bipartisan 2019 Senate Finance Committee Package
- Sen. Chuck Grassley (R-IA) and Sen. Maria Cantwell’s (D-WA) 2021 Legislation
- 2021 Bipartisan-Bicameral Proposal on Insulin
The Commonwealth Fund also highlights the role of the private sector disrupters in changing the PBM landscape. Specifically, they discuss new entrants to the field, Mark Cuban as well as Amazon Pharmacy.