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The James Group Newsletter Vol. 5, Num. 11: Paring Down Drug Prices, Medicare Overhaul ACOs, Urgent HC Need, RA Merger Cancellation, Opioid Prescribing Reduced, HHS & Drug Companies, AMA Opposes CVS/Aetna Merger, Genetic Testing, ACA Plan Premium Increases, Future Risk Corridor Payments, ACA Subsidies, Cigna Overpaying Express Scripts

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August 13, 2018 

Volume 5, Number 11

In This Issue

Paring Down Drug Prices

Medicare To Overhaul ACOs

Urgent HC Need= Transportation

Cancellation of Rite Aid Merger

Opioid Prescribing Reduced by Letters

HHS Takes Aim At Drug Companies

AMA Opposes CVS/Aetna Merger

Genetic Tests Affecting LTD Policies

Premium Increases for ACA Plans

Future Risk Corridor Payments

ACA Subsidies Surpass Medicaid Spending

Cigna Overpaying Express Scripts

TJG On Facebook

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Kaiser Health News: Trump Administration Sinks Teeth Into Paring Down Drug Prices, On 5 Key Points
Three months after President Donald Trump announced his blueprint to bring down drug prices, administration officials have begun putting some teeth behind the rhetoric. Many details have yet to be announced. But experts who pay close attention to federal drug policy and Medicare rules say the administration is preparing to incrementally roll out a multipronged plan that tasks the Centers for Medicare & Medicaid Services (CMS) and the Food and Drug Administration with promoting competition, attacking the complicated drug rebate system and introducing tactics to lower what the government pays for drugs. (Tribble, 8/10)

Source: Kaiser Health News

Kaiser Health News: Medicare To Overhaul ACOs But Critics Fear Less Participation
Accountable care organizations were among the key initiatives of the Affordable Care Act, designed to help control soaring Medicare costs. ACOs were expected to save the government nearly $5 billion by 2019, according to the Congressional Budget Office. It hasn’t come anywhere close. (Galewitz, 8/9)

Source: Kaiser Health News

The New York Times: Companies Respond To An Urgent Health Care Need: Transportation
As America’s baby boomers are hitting 65 at a rate of 10,000 a day, and healthier lifestyles are keeping them in their homes longer, demand is escalating for a little talked-about — yet critical — health care-related job: Transporting people to and from nonemergency medical appointments. “It’s going to become a massive phenomena,” said Ken Dychtwald, founder and chief executive of Age Wave, a consulting firm specializing in age-related issues. “This is an unmet need that’s going to be in the tens of millions of people.” (Morrissey, 8/9)

Source: The NY Times

The Associated Press: Merger Cancellation Pushes Rite Aid Into Uncertain Future
Rite Aid shares plunged Thursday as the company headed into an uncertain future after calling off its merger with the grocer Albertsons. Analysts and retail insiders questioned the drugstore chain's prospects after it ended a planned takeover by Albertsons before Rite Aid shareholders could vote on it. That vote also faced shaky prospects due to opposition from shareholders and influential proxy advisory firms. (8/9)

Source: The Associated Press

NPR: 'Dear Doctor' Letters Reduce Opioid Prescribing
"What's important about what we've found is that you can do very simple things to change prescribing and make prescribing safer," says coauthor Jason Doctor, an associate professor of health policy and management at the University of Southern California. (Watson, 8/9)

Source: NPR

Stat: HHS Takes Aim At Drug Companies For 'Abusive Behavior' In Medicaid 
Top federal health officials are heralding new guidance they say will keep drug makers from taking advantage of a loophole in the Medicaid program’s complex payment structure for certain medicines. The new policy, first laid out in a February law, will help states and the federal government save money when drug makers increase the price of their drugs faster than inflation. The Department of Health and Human Services detailed the complicated algebra related to the change in new letters to states and drug companies. (Swetlitz, 8/9)

Source: Stat

Reuters: American Medical Association Opposes Merger Of CVS And Aetna
The American Medical Association, which represents U.S. physicians, urged the U.S. Justice Department on Wednesday to stop CVS Health Corp's plan to buy insurance provider Aetna Inc, saying the deal could result in higher prices for prescription medicines. The AMA said that the $69 billion deal, announced in December, would lead to a "substantial reduction" of competition in pharmacy benefit (PBM) services market and the Medicare Part D prescription drug plan for seniors. (Bartz, 8/8)

Source: Reuters

Kaiser Health News: How Genetic Tests Muddy Your Odds Of Getting A Long-Term-Care Policy 
In general, long-term-care insurers can indeed use genetic test results when they decide whether to offer you coverage. The federal Genetic Information Nondiscrimination Act prohibits health insurers from asking for or using your genetic information to make decisions about whether to sell you health insurance or how much to charge. But those rules don’t apply to long-term-care, life or disability insurance. (Andrews, 8/7)

Source: Kaiser Health News

Washington Examiner: Premium Increases For ACA Plans Likely Due To Low Competition Among Insurers, Study Concludes

The Washington Examiner reports that according to a study published in Health Affairs, recent increases in ACA premiums “are likely due to fewer insurers competing for customers.” The study examined 2017 and 2018 price increases on ACA exchanges, “which serve the individual insurance market for people who don’t have insurance through a job or the government.” The authors concluded, “Some experts have speculated that these increases are due to greater enrollment among sicker patients, the expiration of market stabilization policies, or the federal government’s discontinuation of funding for cost-sharing subsidies,” but “these factors do not explain why some rating areas have experienced rapid premium growth, while others have experienced more modest increases.” (8/7, King)

Source: Washington Examiner

Washington Examiner: Trump Administration Seeks Public Comment On Future Risk Corridor Payments

The Washington Examiner reports that the Trump Administration is seeking public “input on an Obamacare program that collects and pays out billions of dollars to health insurance companies.” The Administration has said it intends to make the payments “for 2017, after initially saying it was putting payments on hold.” CMS is requesting “comment about how to move forward in 2018 for the payments that will go out in 2019.” The article adds that when the Administration decided to proceed with risk corridor payments for last year, CMS Administrator Seema Verma stated, “Today’s proposed rule continues our effort to help stabilize the individual and small group markets. ... Our goal has been, and will continue to be, to stabilize the market and provide American consumers with more affordable health coverage options.” (8/8, Leonard)

Source: Washington Examiner

Modern Healthcare: ACA Subsidies Surpass Medicaid Spending, Prompting Concerns About Sustainability

Modern Healthcare reports that the federal government’s spending on ACA “premiums has raced past its per-person spending on Medicaid expansion, and the gap is poised to increase – a trend that has some policy experts shaking their heads over the long-term economic picture and at least one major insurer questioning the sustainability of the individual market.” According to the Congressional Budget Office, federal spending on ACA premiums for this year “more than doubled from 2014.” The CBO estimates that amount “will nearly double again over the next decade.” Data indicate the government is paying “an average of $6,300 annually for every subsidized enrollee in fiscal 2018.” That figure is expected to reach about $12,500 in 2028. By comparison, “Medicaid spends $4,230 per non-disabled adult, set to inflate at 5.2% annually to just over $7,000 per person in 2028.” (8/8, Luthi, Subscription Publication)

Source: Modern Healthcare

Bloomberg News: Cigna ‘Dramatically Overpaying’ For Express Scripts

Bloomberg News reports Icahn added, “Cigna management is offering to pay an all-time high price for a company that, as a result of secular changes, is currently standing on very dangerous ground.” (8/7, Deveau)

Source: Bloomberg News

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