Health Plan Weekly

The new landscape for telehealth is revealing itself as the COVID-19 pandemic gradually winds down. Existing players are striving to differentiate themselves in an increasingly crowded market, and Amazon.com, Inc. is rolling out a big bet on telehealth and in-home care.

In the latest of a flurry of telehealth transactions, Doctor on Demand Inc. and Grand Rounds Inc. agreed to merge in an all-stock deal announced March 16, which is projected to close in the first half of this year. Meanwhile, on March 17, Amazon unveiled plans to scale its Amazon Health subsidiary nationally after a successful pilot for workers in its Seattle headquarters.

✦ The U.S. Senate on March 18 narrowly confirmed Xavier Becerra, the current California attorney general, as the new secretary of HHS, prompting a slew of statements from health care industry trade and interest groups congratulating Becerra. For example, Matt Eyles, president and CEO of America’s Health Insurance Plans, said in a statement that AHIP looks forward to working with Becerra “to protect and build upon the Affordable Care Act to expand health coverage for all Americans, address the underlying cost of health care, and eliminate racial and ethnic disparities in medical care.” Becerra himself tweeted that “I’m honored and humbled by today’s vote in the Senate. Thank you. I’m ready to get to work at @HHSgov.” Visit https://bit.ly/3lzZyYD.

✦ Letters sent to Arkansas and New Hampshire officials this week confirmed that the Biden administration is formally revoking their “community engagement” waivers, which condition Medicaid eligibility for a subset of beneficiaries upon employment status. The Supreme Court on March 29 was planning to hear oral arguments related to the Trump administration’s approval of Medicaid work requirements in both states, but earlier this month removed the hearing from its docket, suggesting that previous rulings striking down work requirements could stand. View the Arkansas letter at https://bit.ly/30XShsh.

A health insurer trade group is calling on the federal government to change Medicare Advantage (MA) risk adjustment calculations to include telephone visits, saying the issue has become urgent due to the pandemic, which has seen in-person visits drop and telehealth visits increase dramatically.

CMS determines MA enrollee risk scores based on diagnoses submitted by MA organizations through the Encounter Data System, which are then used to determine a plan’s risk-adjusted payments. When CMS expanded reimbursement eligibility for telehealth visits as part of its pandemic response, the agency allowed video telehealth visits to be included in risk-adjustment calculations. However, CMS currently does not allow telephone encounters to be included in risk score calculations.

CMS has significantly boosted the amount that Medicare will pay for administering COVID-19 vaccines, a move that appears to be a positive development for health care providers and retail pharmacies but a potential headwind for commercial health insurers.

Previously, the national average Medicare payment rate for administering single-dose vaccines was $28, but CMS on March 15 increased that to $40. For two-dose vaccines, the rate rose from $45 to $80. CMS also noted that “the exact payment rate for administration of each dose of a COVID-19 vaccine will depend on the type of entity that furnishes the service and will be geographically adjusted based on where the service is furnished.”

Millions of people in the United States have lost their employer-sponsored health insurance as a result of the pandemic and have had to find new sources of coverage — if they have been able to get insurance at all. While experts are still working to assess the scale of the fallout, they say it’s very likely that the enrollment mix in the U.S. has changed permanently.

As the number of people on job-based insurance has dropped, the number of people on Medicaid has increased. Special enrollment periods held by state-based Affordable Care Act (ACA) exchanges have led to higher numbers of people on individual market plans. The number of people on Medicaid and individual market plans is also likely to increase due to changes to health insurance funding in the American Rescue Plan (ARP), the $1.9 trillion coronavirus recovery package recently passed by Congress, and various administrative actions by the Biden administration.