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The Wall Street Journal reported last night (Cigna Nears Deal to Buy Express Scripts) that Cigna is in final talks to acquire Pharmacy Benefit Manager (PBM) Express Scripts (ESRX) for a whopping $67 billion. ESRX was the last truly independent major PBM, and the deal signals the end of an era…and ushers in a new one, further blurring the lines between insurers, providers, and their primary vendor. The combined entity will reach over 250 million people and will have a ripple effect on many of their competitors.
The draft 2019 Call Letter for Medicare Advantage (MA) included new flexibility for plans around supplemental benefits. It was codified in the recent budget resolution to keep the government open and represents the biggest news for the industry in years. It offers a whole new toolbox for plans to address social determinants of health.
On February 1, 2018, the Centers for Medicare & Medicaid Services (CMS) released its 2019 Advance Rate Notice (Part II) and Draft Call Letter. CMS estimates an expected increase of 1.84% to payments in 2019. CMS says its estimates do not reflect underlying coding trend, which it expects to increase risk scores by 3.1% in 2019.
As 2018 and Year 2 of the chaotic Trump Administration kick off, trying to predict what will happen in Medicare, Medicaid, and the Affordable Care Act is as challenging as ever. It’s a midterm election year with terrible headwinds for the GOP, so the legislative calendar is abbreviated, and partisan rancor will peak. That makes it less likely Republicans will get to do much damage but also more likely they will try to serve up red meat for their base, like a return to “repeal and replace.” Congressional leaders, fresh off their billionaire bailout tax bill, are already talking about taking up “reform” (aka cuts) of Medicare and Medicaid and other social welfare programs. The only thing that is certain is 2018 will be another battleground year for government health programs.
Every few months the industry hears news of new players getting into the Medicare Advantage (MA) game. And why not? According to the Kaiser Family Foundation, more than 19 million Medicare beneficiaries are enrolled in MA plans this year. Either someone is building from the ground up or purchasing an existing structure, such as CVS Health Corporation’s recent agreement to acquire Aetna. I don’t expect this will be the last pharmacy benefit manager to look for an insurer partner with the promise of being able to lower healthcare costs. While analysts argue over the benefits and concerns, one thing is for certain: you need experienced administrators at the helm. I borrow from the late Mitch Hedberg who summarized just because you can do something really well in one field doesn’t make you an expert in everything:
No, the Reagan administration hasn’t come back, but things are looking up in our corner of the world. The Centers for Medicare & Medicaid Services (CMS) is a big ship, and it takes awhile to turn it around after a presidential transition. It is becoming clear the direction will continue to be towards value, but the path is shifting. The government needs to reduce the spend on healthcare, and reducing benefits and restricting eligibility aren’t going to fly on the Medicare side, so we have to get more bang for the buck.
It’s the Annual Election Period (AEP) for Medicare Advantage (MA), and like many health plans, those of us in the industry are often busy. Family members on Medicare are often asking about changes or concerns about their health plan. When I checked in with my father, he indicated he needed to change his MA plan because he owed a $36,000 hospital bill he felt should be covered by his health plan. I thought he was confused until I saw his Explanation of Benefits (EOB), and it did have a $36,000 denial for a hospitalization. The denial message indicated, “You may owe this amount. You will be billed by your provider.”