Health Plan Weekly

✦ HHS’s formula for calculating payments associated with the Affordable Care Act’s risk adjustment program is not “arbitrary and capricious,” a three-judge panel of the Tenth Circuit Court of Appeals ruled on Dec. 31. So states a new post from attorney Katie Keith’s “Following the ACA” blog on Health Affairs’ website, which explains the decision reverses a district court ruling in New Mexico that led the Trump administration to temporarily suspend about $10.4 billion in risk adjustment payments in 2018 (HPW 7/16/18, p. 1). The Consumer Operated and Oriented Plan (CO-OP) that challenged the risk adjustment methodology, New Mexico Health Connections, objected to HHS’s use of a statewide average premium to calculate risk adjustment payments, saying that disadvantages smaller, newer and lower-priced health plans. The CO-OP could appeal directly to the Supreme Court or ask for the case to be reheard by the entirety of the Tenth Circuit, Keith writes. But it’s possible that the ruling will be the final word on risk adjustment litigation. Read more at https://bit.ly/35kA1sE.

✦ When they return to work during the second week of January, Democrats will focus on passing a sweeping drug-pricing reform bill and passing legislation that addresses surprise medical billing, House Speaker Nancy Pelosi (D-Calif.) wrote to members of her caucus recently, The Hill reports. Pelosi is specifically focused on H.R. 3, legislation that cleared the House in December and would allow Medicare to negotiate the prices of some prescription drugs — plus make those prices available to private insurance plans. Republicans in the Senate have indicated the bill will never make it to the president’s desk, however. Meanwhile, a bipartisan, bicameral agreement to address surprise medical billing hit a roadblock shortly before the holidays when a competing measure surfaced in the House (HPW 12/23/19, p. 1). Read The Hill’s article at https://bit.ly/37waoXA.

Despite Medicare Advantage insurers’ enthusiasm for increased flexibility in allowable supplemental benefits and a slew of recent plan releases touting goodies such as pest control and “Papa Pals” for the 2020 plan year, uptake of more “resource intensive” benefits geared toward seriously ill seniors remains relatively modest, according to a new report from the Duke Margolis Center for Health Policy. That research adds to a growing body of evidence highlighting the challenges plans face in adopting new supplemental benefits.

Focusing on five categories of benefits that are applicable to seriously ill beneficiaries — adult day care, caregiver support, in-home support services, non-opioid pain management and palliative care — researchers analyzed plan benefit package (PBP) data available from CMS for 2015 through the first quarter of the 2020 contract year (the most recent data available).

Now that the open enrollment period has ended for the 38 states that use HealthCare.gov to enroll people in Affordable Care Act (ACA) marketplace plans, the preliminary sign-up numbers offer relatively reassuring news for the insurers that operate in the individual market.

From Nov. 1 to Dec. 17 — an open enrollment period that included a two-day extension — 8.3 million people chose or were automatically re-enrolled in health plans on the federal exchange, CMS said on Dec. 20. That’s down just slightly compared with 2019, when total HealthCare.gov enrollment was 8.5 million.

Conservative states are likely to push hard in 2020 for CMS approval of Medicaid waivers that will allow them to implement policies such as work requirements, while voters in some of the 14 states that have not yet expanded Medicaid could tee up referendums that would require expansion, Medicaid observers say.

Jerry Vitti, founder and CEO of Healthcare Financial, Inc., a company that connects low-income elderly and disabled populations with public benefit programs, says he anticipates additional Medicaid waiver applications from red states.

The pace of health care mergers and acquisitions — which ran at a fever pitch in 2018 and 2019 with multiple high-profile and high-value transactions — likely will cool slightly in 2020, given lofty asset prices, diminishing prospects for horizontal deals and the imminent presidential election, industry experts report.

Insurers are likely to seek out companies with assets such as care management or information technology solutions, while provider consolidation will continue in certain markets.