Under the backdrop of a public health emergency and the White House pressuring Congress to pass drug pricing legislation, CMS on March 11 unveiled a new Innovation Center model that it expects will lower out-of-pocket (OOP) insulin costs by roughly 65% for enrollees of participating Part D plans. Nevertheless, health policy experts say the model is rather limited and likely won’t drive a fundamental shift in Part D drug pricing.
Under the five-year Part D Senior Savings Model, CMS will test a change to the Manufacturer Coverage Gap Discount Program by waiving current rules for supplemental benefits used to reduce cost sharing in the coverage gap and enabling Part D sponsors to offer enhanced alternative plan benefit packages (PBPs) that feature “standard, predictable” copayments through all phases of the Part D benefit up to catastrophic coverage. Participation from manufacturers and plans is voluntary. Innovation Center head Amy Bassano, during a March 12 webinar, said CMS recognizes that plans and other stakeholders are busy addressing the coronavirus outbreak (see story, above), but the agency is hoping for “robust participation and interest…given how critical it is to ensure that our seniors have access to insulin.”
In the week or so leading up to the U.S. declaring a national emergency, Medicare Advantage and other insurers’ early response to the new coronavirus outbreak included waiving cost sharing related to testing, allowing early prescription refills and expanding access to and encouraging the use of telehealth services. But as more cases were confirmed in the U.S. — leading to school closures, restaurants shutting down, increased telework and so on — and conflicting messages came out of the White House, insurers at press time were having to take extra steps to protect the health of their most vulnerable members.
The World Health Organization on March 11 declared the coronavirus outbreak a pandemic. (The full name of the virus, which originated in China in late 2019, is SARS-CoV-2. The virus causes COVID-19, which stands for coronavirus disease 2019.) As of March 18, there were 7,038 known cases and 97 related deaths in the U.S., according to the Centers for Disease Control and Prevention. Symptoms include fever, cough and breathing trouble; older adults and people with serious chronic medical conditions are believed to be at higher risk for complications.
✦ CMS’s 2019 Medicare Parts C and D program audits resulted in civil monetary penalties amounting to nearly $1.2 million imposed on six organizations, according to CMP notices posted at www.cms.gov. The agency in a memo dated Feb. 28 released the audit scores of the 13 organizations that underwent 2019 program audits, with scores ranging from 0 to 1.74 (the lower the score, the better the performance). Outside of the program audit process, CMS barred Medicare Advantage and Prescription Drug Plan operator Delaware Life Insurance Co. from marketing and enrollment activities and imposed a CMP on Miami-based Solis Health Plans, Inc. for failing to ensure that its agents and brokers followed Medicare marketing rules during the 2019 Annual Election Period. View all the notices at https://go.cms.gov/2x1Q7vP.
✦ After two cycles of marketing Medicare Advantage plans during the Annual Election Period, Mutual of Omaha has decided to sell its MA businesses to Essence Healthcare, sister company of Lumeris. According to a Feb. 24 press release from Essence and Lumeris, Essence will acquire the two Mutual of Omaha subsidiaries that offer MA plans in the Cincinnati, Dallas, Denver, El Paso and San Antonio markets. Lumeris has served as an operating partner to Mutual of Omaha since 2018 and operates MA plans under the Essence Healthcare brand (RMA 4/5/18, p. 1). The companies did not disclose financial terms of the deal, which is expected to close by mid-2020, and declined to provide additional details when queried by AIS Health. According to AIS’s Directory of Health Plans, Mutual of Omaha had 2,416 total enrollees in MA plans in Colorado, Kentucky, Ohio and Texas as of February, compared with 920 members this time last year, when it served just the Cincinnati and San Antonio markets. Contact Lumeris spokesperson Marcus Gordon at firstname.lastname@example.org.
In the midst of a financial turnaround, Molina Healthcare, Inc. impressed analysts with its fourth-quarter and full-year 2019 earnings reported on Feb. 10. Namely, the company reported a better-than-expected medical loss ratio (MLR) of 86.0%, which it attributed to improvements in the Medicaid business.
That fourth-quarter 2019 MLR was a slight increase from 85.1% for the fourth quarter of 2018, but Molina attributed that to a heightened MLR in its Affordable Care Act exchange business and said the company’s Medicaid MLR improved sequentially by 80 basis points to 87.3%. The overall MLR was 20 basis points below Wall Street consensus and 10 points below Evercore ISI’s expectation, pointed out securities analyst Michael Newshel on Feb. 10. For the year ending Dec. 31, 2019, the company’s Medicaid MLR was 88.0%, compared with 90.0% in 2018, “due to improvement in all programs.”
The majority of publicly traded insurers reporting fourth-quarter and full-year 2019 earnings over the last month identified government business as a significant earnings contributor, with momentum from the recent Medicare Advantage open enrollment period carrying that growth into 2020.
Reporting its first full year of earnings with Aetna Inc., CVS Health Corp. on Feb. 12 said that acquisition was the main driver of consolidated growth of 32% to nearly $256.8 billion. Total revenues in the company’s Health Care Benefits segment continued to benefit from strong membership in government products, said Eva Boratto, CVS Health chief financial officer, during a conference call to discuss recent earnings.
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