Health Plan Weekly

The Trump administration on May 22 revealed multiple initiatives to improve health care price transparency, including updating guidance for health plans to publish data and seeking public input via requests for information (RFIs). Kolton Gustafson, an Avalere Health principal, tells AIS Health the announcements are “very significant for both plans and pharmaceutical manufacturers,” although he notes it is still to be determined whether they will lead to lower prices for health care services and prescription medications.  

The administration said the moves by HHS, along with the Labor and Treasury departments, will strengthen the Transparency in Coverage (TiC) rule, which was finalized in November 2020 and required health insurance companies to publicly post in-network rates, out-of-network allowed amounts and other data, as well as the Hospital Price Transparency rule, which was finalized in November 2019 and required hospitals to publicly disclose gross charges, cash prices, negotiated rates and other information.  

Amid a flurry of CMS announcements about health care price transparency and Medicaid issues, the agency on May 21 unveiled a bold plan to collect Medicare Advantage overpayments through the expansion of Risk Adjustment Data Validation (RADV) audits. Industry analysts say the news could be especially bad for Humana Inc. and UnitedHealth Group, although it remains to be seen whether CMS will be able to meet its lofty goals for the pace and scope of the planned audits. 

In a process initiated more than a decade ago, CMS conducts RADV audits of a select group of MA contracts to verify that diagnoses submitted by MAOs for risk adjustment purposes are accurate and supported by medical records. The agency this year selected 60 MA organizations for RADV audits of payments issued in 2018. That is also the first payment year for which CMS will apply an extrapolation methodology, which has been challenged in a lawsuit filed by Humana and is expected to significantly boost the recoveries sought by CMS.  

For supporters of Individual Coverage Health Reimbursement Arrangements (ICHRAs), the budget bill recently passed by House Republicans contains a lot to be excited about. However, some industry and health policy experts say there’s also reason to be skeptical that the legislative package — if passed — could massively increase ICHRA uptake. 

“It’s not a giant switch that when it’s flipped, suddenly ICHRA is going to explode or be the best deal,” says Sam Melamed, CEO at supplemental benefits company NCD.  

The Cigna Group could deliver its employer clients at least 10% in net cost savings on their GLP-1 medication spending thanks to two recent initiatives, according to a May 23 research note from Guggenheim Securities analysts. Meanwhile, Deutsche Bank analysts in a May 23 note wrote that Cigna expects to reduce the net cost of GLP-1 prescriptions by up to 20%. Both Guggenheim and Deutsche Bank analysts met this month with Cigna executives and discussed their approaches to managing GLP-1s and other topics. 

Cigna’s Evernorth Health Services subsidiary on May 22 announced that it had struck deals with Eli Lilly and Co. and Novo Nordisk to cap Zepbound (tirzepatide) and Wegovy (semaglutide) copays at $200 per month for plan members, which could save members up to $3,600 per year compared to buying the weight loss medications directly from manufacturers. 

In a win for PBMs, the Dept. of Justice’s Office of the Solicitor General filed a brief on May 28 recommending that the Supreme Court should not review a case challenging an Oklahoma law. In Pharmaceutical Care Management Association v. Mulready, the PBM trade group PCMA challenged the Patient’s Right to Pharmacy Choice Act, which sets geography-based access standards for pharmacy networks and bans PBMs from using discounts or cost-sharing differences to push plan members to certain in-network pharmacies. An appeals court in August 2023 agreed with PCMA that Oklahoma’s law violated both the Employee Retirement Income Security Act (ERISA) and the statutes governing Medicare Part D, but that ruling contradicts the Supreme Court’s 2020 ruling in PCMA v. Rutledge, which challenged a PBM-regulating law in Arkansas. Thus, the Supreme Court was asked to weigh in. But in its new amicus brief, the Solicitor General suggested that a review from the high court wasn’t necessary. “SCOTUS frequently follows the suggestion of the Solicitor General, but is not required to,” advised two analysts from the research firm Washington Analysis. “We believe it is unlikely that the Court reviews the case.”