Health Plan Weekly

In 2024, managed care organizations will have to manage more complex care coordination requirements and compliance with ambitious equity goals in many states — even as Medicaid programs have been forced to step up reimbursement rates across many care categories. That’s according to the 2023 edition of KFF's annual survey of state Medicaid officials, which was released on Nov. 14. 

The overwhelming majority of states are increasing Medicaid reimbursement rates across many care categories. Forty-eight states increased rates for at least one care category in 2023, and 47 will do the same in 2024. Only 21 states implemented at least one rate restriction in 2023, and 19 expect to do so in 2024. 

That means total state spending for the safety net health insurance program is likely to increase, despite the ongoing reduction in total enrollment due to the return of eligibility redeterminations. Medicaid spending per enrollee is likely to increase in 2024, KFF found, while total Medicaid spending growth in the surveyed states will likely be 8.3% in 2023, down from 9.8% in 2022. 

The U.S. Senate Finance Committee seems poised to take up legislation that would make permanent the significant, pandemic-era reforms to Medicare telehealth rules, including rules governing site of care origination and audio-only telehealth encounters, which are otherwise set to expire at the end of next year. Medicare Advantage plan and provider trade groups back the legislation and have pushed for telehealth reforms to be permanent when they were up for renewal in previous legislative cycles. 

Emergency reforms to Medicare reimbursement rules were a key reason that the telehealth industry boomed in recent years. Telehealth was the only option for many types of outpatient care during the early parts of the COVID-19 pandemic, and patients, plans and providers became accustomed to using telehealth modalities for a wide variety of low-acuity encounters. Those encounters wouldn’t have been reimbursable if it weren’t for temporary, emergency reforms of Medicare telehealth billing rules passed as parts of COVID relief bills and executive orders by Presidents Donald Trump and Joe Biden.  

Despite the program receiving continued pushback from progressive lawmakers, data from the since-renamed Global and Professional Direct Contracting (GPDC) Model suggests that it is making significant strides, with participants driving gross savings exceeding $870 million in 2022, more than seven times the $117 million in gross savings reported for performance year 2021. At least five known Medicare Advantage sponsors have subsidiaries participating in the model, which allows Accountable Care Organizations (ACOs) to share risk and receive capitated payments for serving fee-for-service (FFS) beneficiaries. 

CMS, in a fact sheet highlighting the performance year 2022 data, observed that the total financial savings increased year over year because of “growth in model participation, a longer performance period in PY2022 (12 months vs. 9 months in PY2021), and performance improvements by model participants as they gained experience.” Last year, 99 Direct Contracting Entities participated in the model, up from 53 DCEs in 2021, with 21 million beneficiary months, compared with 3 million beneficiary months in 2021.  

Merging urban and rural Affordable Care Act marketplace rating areas in Texas significantly increased carrier and plan choices and lowered overall plan premiums in rural Texas, according to a recent Health Affairs study.

When calculating premiums for customers, the ACA permits insurers to consider those customers’ area of residence — or rating area — among other factors including age, smoking status and family size. Yet the use of rating areas can lead to higher premiums for rural areas, where residents tend to have greater health care needs and where there’s a smaller risk pool due to lower population density.

The Cigna Group’s Express Scripts PBM announced on Nov. 14 that it’s launching a new “cost-plus” prescription drug pricing model for its clients. With the Express Scripts ClearNetwork, “clients pay a straight-forward estimated acquisition cost for individual medications, in addition to a small markup for pharmacy dispensing and service costs.” Express Scripts plans on launching the model in early 2024 and applying it toward generic, branded and specialty drugs. The move comes amid rising scrutiny from regulators over PBMs’ standard business practices like spread pricing, which allows PBMs to pocket the difference when pharmacies charge less for filling prescriptions than payers reimburse.  

Five health care organizations, including AHIP and the American Medical Association, have launched the Common Health Coalition: Together for Public Health, according to a Nov. 9 press release. The coalition is “focused on translating the hard-won lessons and successes of the COVID-19 pandemic response into actionable strategies that will strengthen the partnership between our health care and public health systems.” The other founding members are the Alliance of Community Health Plans, American Hospital Association and Kaiser Permanente. Dave A. Chokshi, M.D., a physician at Bellevue Hospital and former New York City Commissioner, is chair of the Common Health Coalition.