Today's Datapoint

53 ... health plans, on average, will be available to consumers shopping for insurance tomorrow in the 36 states with federally facilitated health exchanges, according to a Sept. 25 CMS report.

Quote of the Day

“Presumably this [Sept. 13 notice issued by the Departments of Treasury and Labor] discourages employers from dropping coverage, sending employees to an exchange and offering to pay for some of the premiums through an HRA. There are some [consulting] groups out there that have been erroneously promoting this concept and telling employers that they can avoid [mandated coverage] penalties by doing this. This is just further clarification that it can’t be done.” — Roy Ramthun, president of HSA Consulting Services and a former health policy adviser to President George. W. Bush, told AIS’s Inside Health Insurance Exchanges.

New Report Gives Health Plans More Reason to Fight Copay Coupons

By Lauren Flynn Kelly - September 4, 2013 A new report published by The New England Journal of Medicine may add more fuel to the copay coupon debate, as it suggests nearly two-thirds of copay coupons currently being offered by brand-name drug manufacturers are for drugs that have lower-cost therapeutic alternatives. Conducting their own analysis of the discount programs available, the article’s authors manually abstracted information on each coupon advertised in March 2013 at www.internetdrugcoupons.com and identified 374 brand-name, prescription-only drugs for a wide range of indications. More than 75% of the coupon-associated drugs were for chronic conditions for which therapies would normally be used for six months or longer. The authors determined that “62% of coupons (231 out of 374) were for brand-name medications for which lower-cost therapeutic alternatives were available,” while 58% of the drugs had a lower-cost generic alternative within the same drug class. Moreover, few of the coupons they looked at offered savings for more than a year. Once a coupon program ends, patients with chronic diseases who need to continue on these medications will be faced with serious sticker shock when they find out the actual cost of the brand-name meds they’ve become accustomed to taking. And if consumers download the coupons from the Internet and do not obtain them from their prescribers, then their physicians won’t know to help them by writing a script for a lower-cost alternative if available. As a result, it’s up to insurance companies or PBMs to reach out to members, but how do they know the coupons are being used? They often don’t, thanks to the “shadow claims system” described in the Pharmaceutical Care Management Association’s now famous Visante study. A report recently released by Crossix Solutions and covered in Drug Benefit News suggests that even though the actual number of copay card programs out there has decreased since 2012, their use among insured consumers has increased. However, data presented by Source Healthcare Analytics in February at the 2013 Pharmacy Benefit Management Institute Drug Benefit Conference suggest that payers need not worry too much. The data firm estimates that copay coupons targeted at brand-name drugs with generic equivalents accounted for only 16.3% of total claims associated with the cards in 2012. While there are two sides to this coin, and each side can find data to support its cause, we know that at least some coupon programs are problematic for payers. But instead of hearing further evidence of why they are problematic, I’d love to hear more from health plans and PBMs on what actions they are taking to prevent the use of troublesome coupons. What new or innovative strategies can you share to combat the ongoing problem of copay coupons? Feel free to comment here or email me at lkelly@aishealth.com. http://aishealth.com/blog/pharmacy-benefit-management/new-report-gives-health-plans-more-reason-fight-copay-coupons?utm_source=MagnetMail&utm_medium=email&utm_term=john@thebrokerageinc.com&utm_content=hbd090613&utm_campaign=Feature%3A%20Consultant-Turned-Whistleblower%20Drives%20$26%20Million%20Medical%20Necessity%20Settlement

The percentage of people without health insurance coverage

...from 15.7% (48.6 million people) in 2011, to 15.4% (48 million people) in 2012, not a statistically significant difference. Source: "Income, Poverty and Health Insurance Coverage in the United States: 2012," The U.S. Census Bureau Press Release, September 17, 2013, http://www.census.gov/newsroom/releases/archives/income_wealth/cb13-165.html

Today's Datapoint

41% … of the more than 100 large, self-funded employers participating in a recent National Business Group on Health survey indicated that their COBRA plan participants are likely to choose public exchange coverage when it becomes available in 2014, followed by pre-65 retirees (26%), current part-time employees (20%), spouses of dependents (15%), seasonal/temporary workers (13%), current full-time employees (12%) and contractors/consultants (9%), with “no one currently covered by my company plan” scoring 40%.

Quote of the Day

The insurance industry “consented to [the ACA’s tax on insurers that begins in 2014] in a world where there would be 30 million uninsured people coming online. But it now looks like it will be only 15 million, so they are asking ‘why should we pay the same tax?’” — Dan Mendelson, president of the consulting firm Avalere Health, LLC, told AIS’s Health Plan Week.

Today's Datapoint

82% … of employees who are covered through their employers’ prescription drug benefit have a formulary with three or more tiers, according to the 2013 Employer Health Benefits Survey released recently by the Kaiser Family Foundation/Health Research & Educational Trust. And 23% (up from 14% in 2012) now have a formulary of at least four tiers.

Quote of the Day

“If I were on the buying side [of health insurance] I’d be very interested in any or all of [the private insurance exchanges] to see what is different about them, to see how they are going to, in the case of an employer, ensure that my costs are going to be controlled because that is going to be the biggest concern.” — Helen Darling, president of the National Business Group on health, told AIS’s Health Plan Week.

Number of Preventable Deaths from Heart Disease & Stroke

Year Under 65 65- 74 years 2001 110,299 117,662 2002 113,094 113,777 2003 114,280 107,822 2004 112,377 101,139 2005 113,714 97,110 2006 114,353 92,916 2007 112,918 89,080 2008 113,993 90,091 2009 117,139 90,996 2010 112,329 87,741 Source: National Center for Chronic Disease Prevention and Health Promotion, Division for Heart Disease and Stroke Prevention

Uninsured Americans who will be Eligible for Coverage

A report released by the Department of Health and Human Services (HHS) shows that of the 41.3 million individuals who are uninsured and eligible for coverage, 23.2 million (56 percent) may qualify for Medicaid, the Children's Health Insurance Program, or tax credits to purchase coverage for $100 or less per month through the Health Insurance Marketplace. If all 50 states took advantage of new options to expand Medicaid coverage, nearly 8 out of every 10 people (78 percent) who currently do not have insurance could be paying less than $100 a month for coverage under the Affordable Care Act. While some states are expanding their Medicaid programs in 2014, other states are not doing so. Under the health care law, states can receive 100 percent federal funding in 2014 to expand their Medicaid programs to cover people with incomes up to 133 percent of the federal poverty level. That's about $15,800 a year for an individual, or about $32,500 for a family of four. Source: U.S. Department of Health & Human Services

Amount of Eligible Uninsured Who Could Purchase Marketplace Coverage for $100 or Less after Tax Credit

-Total Marketplace Tax credit eligible - 18,586,000 -Silver plan for $100 or less - 6,425,000 -Bronze plan only for $100 or less - 4,343,000 -Percent of Marketplace eligible who could purchase coverage for $100 or less - 49.1% Source: Department of Health and Human Services Office of The Assistant Secretary for Planning and Evaluation (ASPE) Office of Health Policy

How Much Medicare Advantage Beneficiaries Could Have Saved in 2013 on Prescription Drugs

According to data released by eHealth, Inc., only fourteen percent (14%) of people who used eHealth's online Medicare plan comparison tools were in the Medicare Advantage Prescription Drug plan (MAPD) with the lowest total out-of-pocket costs on prescription drugs available to them. The research also revealed that less than six percent (6%) of people who used eHealth's comparison tools to compare prices in stand-alone Medicare Prescription Drug plans (PDPs) were in the PDP with the lowest total out-of-pocket costs available to them. Users who switched to the plan with the lowest total out-of-pocket costs on prescription drugs in 2013 could have saved an average of $649 over their existing PDP and an average of $634 over their existing MAPD, according to the study. eHealth's analysis also found that in 2013 the average Medicare beneficiary without any Part D coverage could save an average of $1,266 on prescription drug costs by enrolling in a PDP, and an average of $1,402 on prescription drug costs by enrolling in a MAPD plan. Source: eHealth

Health Care Spending Growth in 2012

For the third consecutive year, the growth rate of health care spending among privately insured people under age 65 remained low in 2012, growing 4.0 percent, slightly lower than in 2011 (4.1%), says the Health Care Cost Institute (HCCI). Health care spending averaged $4,701 per person with employer-sponsored coverage in 2012, up $181 from the year before. Forty-five percent of the additional dollars were due to more spending on outpatient care. In addition, out-of-pocket spending rose more quickly than expenditures per person in 2012, increasing 4.8 percent to $768 for each individual. After three years of slowing growth, spending per person on prescription drugs and devices reversed course, growing 3.8 percent in 2012, due mainly to increased use and rising prices for generic drugs. Inpatient spending grew slower (2.4%) than any other medical service category in 2012, while spending on outpatient services grew at the fastest rate (6.5%). Prices rose 5.4 percent for inpatient services, and 5.6 percent for outpatient services. Source: Health Care Cost Institute

Health Insurance Coverage Trends in the United States During 2012

• The number of people with health insurance increased to 263.2 million in 2012 from 260.2 million in 2011, as did the percentage of people with health insurance (84.6 percent in 2012, 84.3 percent in 2011). • The percentage of people covered by private health insurance in 2012 was not statistically different from 2011, at 63.9 percent. This was the second consecutive year that the percentage of people covered by private health insurance coverage was not statistically different from the previous year's estimate. The percentage covered by employment-based health insurance in 2012 was not statistically different from 2011, at 54.9 percent. • The percentage of people covered by government health insurance increased to 32.6 percent in 2012, from 32.2 percent. The percentage covered by Medicaid in 2012 was not statistically different from 2011, at 16.4 percent. The percentage covered by Medicare rose over the period, from 15.2 percent in 2011 to 15.7 percent in 2012. Since 2009, Medicaid has covered more people than Medicare (50.9 million compared with 48.9 million in 2012). • The percent of children younger than 18 without health insurance declined to 8.9 percent (6.6 million) in 2012 from 9.4 percent (7.0 million) in 2011. The uninsured rates did not show a statistical change for all other age groups: 19 to 25, 26 to 34, 35 to 44, 45 to 64 and people 65 and older. • The uninsured rate for children in poverty (12.9 percent) was higher than the rate for children not in poverty (7.7 percent). • In 2012, the uninsured rates decreased as household income increased from 24.9 percent for those in households with annual income less than $25,000 to 7.9 percent in households with income of $75,000 or more. Source: U.S. Census Bureau

According to a study of a 5% sample of all Medicare fee-for-service beneficiaries with continuous Part A and B coverage:

• Beneficiaries with 10 or more chronic conditions were over 6 times more likely to be readmitted to a hospital within 30 days of discharge, than beneficiaries with 1 to 4 chronic conditions • Beneficiaries with 10 or more chronic conditions comprised only 8.9% of all Medicare beneficiaries and 31.0% of all hospitalizations, but they were responsible for 50.2% of all readmissions • The 31.8% of beneficiaries with 5 to 9 chronic conditions (55.5% of all hospitalizations) had the second highest odds ratio (2.5) for readmissions, and were responsible for 45% of all readmissions Source: "Medicare beneficiaries most likely to be readmitted," Journal of Hospital Medicine, abstract only, August 28, 2013, http://onlinelibrary.wiley.com/doi/10.1002/jhm.2074/abstract

Today's Datapoint

37 million … people who now receive employer-based health insurance may be “better off” buying coverage on the insurance exchanges, according to a study published in the September issue of Health Affairs by Jay Bhattacharya, M.D., a professor at the Stanford University School of Medicine.

Quote of the Day

“To me, [criticism of the delays announced by some of the exchanges] is much ado about nothing. We all knew that implementation of exchanges was a tall order, and not an easy thing to digest in one big open enrollment.” — Fred Karutz, senior vice president of business development at ConnectedHealth, a company that works with insurers to implement private exchanges, told AIS’s Health Reform Week.

Today's Datapoint

57% … of Americans say they oppose efforts by Congress to withhold funding for the implementation of the Affordable Care Act, with just 36% approving, according to a new Kaiser Family Foundation poll.

Quote of the Day

“I’d expect most [exchanges] will be live by Oct. 1, some perhaps delayed a week or two. There are many, many moving parts and it is highly unlikely all will mesh together seamlessly the first time around. If they did, they would be the only part of our health care ‘system’ that actually works seamlessly, efficiently and correctly." — Joseph Paduda, principal at Health Strategy Associates, LLC, told AIS’s Health Plan Week.

Today's Datapoint

80 … Republican members of the U.S. House of Representatives signed an Aug. 22 letter to Speaker John Boehner (R-Ohio) asking him to trigger a government shutdown rather than fund the Affordable Care Act.

According to a recent survey of young adults ages 19 to 9

67% took health insurance benefits through an employer when offered. For those who did not enroll in an employer health plan, the main reasons given were: • They were covered by a parent, spouse, or partner (54%) • They couldn’t afford the premiums (22%). • They felt they didn’t need insurance (only 5%) Source: "New Survey of Young Adults: 7.8 Million Gained New or Better Coverage Through Affordable Care Act, But Only 27 Percent Are Aware of Health Insurance Marketplaces; Millions Will Remain Uninsured If States Don’t Expand Medicaid," The Commonwealth Fund, August 20, 2013, http://www.commonwealthfund.org/News/News-Releases/2013/Aug/New-Survey-of-Young-Adults.aspx

OIG: Medicare, RACs Botch Audits

Published: Sep 5, 2013 By David Pittman, Washington Correspondent, MedPage Today WASHINGTON -- Medicare's much criticized recovery audit contractors (RACs) may not be catching all overpaid claims and "high amounts of improper payment may continue," according to a government watchdog report. But, although RACs flagged half of all claims they reviewed as being improper in fiscal 2010 and 2011, the Centers for Medicare and Medicaid Services (CMS) didn't evaluate the effectiveness of those actions, the Health and Human Services' Office of the Inspector General (OIG) said. Therefore, it's difficult to know if the RACs' actions changed provider behavior. Furthermore, CMS hasn't taken action on referrals for potential fraud and hasn't evaluated the performance of all metrics in the RACs' contract, the report said. "CMS reported that it had not evaluated corrective actions because of lack of resources and the difficulty in determining causal relationships between corrective actions and reductions in improper payments," the OIG said in a report on Medicare's RACs issued Tuesday. "CMS also reported that some corrective actions should be in place for several years before it evaluates them." To assess the effectiveness of the oversight of RACs, the OIG collected and analyzed data on recovery activities and CMS oversight and performance evaluations. "OIG has identified vulnerabilities in CMS' oversight of its contractors," the report stated. "Given the critical role of identifying improper payments, effective oversight of RAC performance is important." Medical societies, including the American Medical Association, have been outspoken in their negative feelings toward RACs, at one point calling them "bounty hunters." Groups have called the RACs' work burdensome and intrusive to providers while referring to their incentive structure as "perverse" since their pay is dependent on the amount of money they save CMS. But the RAC program has drawn criticism outside of provider groups. The Government Accountability Office in 2010 said CMS hadn't addressed 60% of improper payment vulnerabilities spotted during an earlier demonstration project. The RACs' work has recently drawn the attention of the Senate Finance Committee, where this summer Chairman Max Baucus (D-Mont.) said CMS should expand the program but not place any more burdens on providers. In fiscal 2010 and 2011, contractors spotted improper payments totaling $1.3 billion, according to the OIG, and private payers have started to launch similar RAC programs. But CMS took action on 28 of 46 specific areas that resulted in more than $500,000 in improper payments in fiscal 2010 and 2011, the OIG found. Examples included providers billing "add-on codes" without primary codes or indicating the incorrect place of service on claims. The OIG also found CMS didn't evaluate RACs' performance on all contract requirements. "Specifically, CMS did not evaluate RACs on the extent that they identified improper payments," the report stated. "Further, four of the eight performance evaluations that we reviewed did not describe RACs' ability, accuracy, or effectiveness in identifying improper payments." Other OIG findings include: • 32% of recovered payments were from services being delivered in inappropriate facilities and 25% from incorrect billing codes • 88% of improper payments were from inpatient hospitals and 5% from physician and nonphysician practitioners • Providers appealed 6% of RAC decisions • Nearly half (44%) of appeals were overturned The OIG recommended that CMS evaluate the effectiveness of corrective actions, develop additional performance metrics to improve RAC performance, and review all referrals for fraud. In a letter to Inspector General Daniel Levinson, CMS Administrator Marilyn Tavenner agreed with most of the OIG's findings. "CMS continuously implements corrective actions on potential and known vulnerabilities and has implemented a dynamic process for addressing these vulnerabilities," Tavenner wrote. Medicare's RAC program was authorized by Congress in 2003 through the law that created the Part D prescription drug program. Contractors identify overpayments and underpayments in Medicare Parts A and B and then are paid based on the percentage of improper payments recovered by CMS. http://www.medpagetoday.com/PublicHealthPolicy/Medicare/41413?xid=nl_mpt_DHE_2013-09-06&utm_content=&utm_medium=email&utm_campaign=DailyHeadlines&utm_source=WC&eun=g350341d0r&userid=350341&email=john@thebrokerageinc.com&mu_id=5344066

According to a recent survey of large employers,

44% currently have an on-site clinic in at least one of their locations, and 9% are expecting to build a clinic next year. Source: "Large U.S. Employers Project a 7% Increase in Health Care Benefit Costs in 2014, National Business Group on Health Survey Finds," National Business Group on Health News Release, August 28, 2013, https://www.businessgrouphealth.org/pressroom/pressRelease.cfm?ID=214

Today's Datapoint

25 … states will have approved Medicaid expansion under the Affordable Care Act once the Michigan House (which has already passed an expansion bill) concurs with a measure passed by the state senate on Aug. 26.

Quote of the Day

“I kind of predicted that there’d be a crop of PBMs popping up after the consolidation of the larger PBMs because the consolidations certainly bring service challenges to clients. What consolidations have brought is very robust pricing to their clients, especially in terms of pharmacy discounts and rebates, but the downside is that the client service is not as robust when you’re a big organization.” — Helen Sherman, Pharm.D., vice president at Solid Benefit Guidance, told AIS’s Drug Benefit News.

Today's Datapoint

More than 90% … of employers who contribute to multi-employer plans are well below the 50-employee threshold, and are not subject to the ACA mandates, according to Randy DeFrehn, executive director of the National Coordinating Committee for Multiemployer Plans.

Quote of the Day

“Ideally what you would do if you were building a data hub that needs this kind of information [for public exchanges], you’d put a piece together and test that. You test it, if you will, sequentially. We have to build and test simultaneously….It’s a big operational issue, but all systems are go for the first of October.” — HHS Sec. Kathleen Sebelius told The Washington Post for an article published on Aug. 25.