The Weekly Scan

January 25, 2019

Last Updated: 1:00 PM EST

Medicare & Medicaid

  • The Government Accountability Office released a new report this week titled “Medicare: Voluntary and Mandatory Episode-Based Payment Models and Their Participants.” In an effort to slow the growth of expenditures for health care services provided through traditional Medicare and improve the quality of care provided to beneficiaries, CMS is testing alternatives to traditional Medicare, such as episode-based payment models. Under episode based payment models, providers such as hospitals or physician group practices are held accountable for the cost and quality of the services provided to Medicare beneficiaries during a defined episode of care. GAO was asked to review the episode based payment models developed by CMS. This report describes the characteristics of the providers that participated in these models and compares the relative advantages of voluntary versus mandatory episode based payment models, as identified by stakeholders. (GAO.gov)

 

  • Democratic Gov. Janet Mills is rejecting an arrangement her Republican predecessor set up with the Trump administration in Maine that would have required certain people on Medicaid to work as a condition of staying enrolled in the program. Instead, she directed the state's health agency Tuesday to make vocational and work training programs available as an option for Mainers. To be on the Medicaid program, people in the state must make less than roughly $17,000 a year, regardless of whether they are working, are disabled, or what their savings are. (WashingtonExaminer.com)

 

  • A health care industry group on Thursday launched a digital ad campaign against "Medicare for all," as health care companies ramp up their efforts to fight the idea gaining ground on the left. “Whether it’s called Medicare for all, single-payer or a public option, a one-size-fits-all health care system will mean all Americans have less choice and control over their doctors, treatments and coverage,” states the two-and-a-half minute video, which will run as a digital ad on Facebook, Twitter and YouTube. The group behind the ad is the Partnership for America’s Health Care Future, whose members include major industry players such as America’s Health Insurance Plans and the Pharmaceutical Research and Manufacturers of America, who last year came together to form the group to fight Medicare for all. (TheHill.com)

 

  • Last Friday, CMS’s Center for Medicare and Medicaid Innovation, which tests innovative payment and service delivery models to lower costs and improve the quality of care, announced a new payment model and transformative updates to an existing model.  The models are designed to enable Medicare Advantage and Part D plans, which are private plans that provide Medicare beneficiaries with medical and prescription drug coverage, to better serve patients and help them achieve good health. The model for Medicare Advantage plans is an update to the Medicare Advantage Value-Based Insurance Design or “VBID” model that CMS first launched in 2017. The model for Part D plans is called the Part D Payment Modernization model. These are both voluntary models to advance innovation – meaning certain Medicare Advantage and Part D plans can choose to participate, and patients can choose to enroll in participating plans.  The models will be closely monitored, and if they clear certain thresholds for impact on quality, costs, and access to benefits, the models can be expanded in scope. (CMS.gov)

 

  • Also last Friday, the CMS approved Arizona’s request for an amendment to add a community engagement requirement to its section 1115 Medicaid demonstration project, entitled “Arizona Health Care Cost Containment System (AHCCCS).” Following a thorough tribal consultation at the state and federal level, the Arizona demonstration will be the first to include an exemption to this requirement for members of federally recognized tribes. “Medicaid demonstrations like this one empower states to provide health coverage to their citizens while allowing the states the flexibility to tailor their approach to their unique populations,” said CMS Administrator Seema Verma. “We have long stressed the importance of meaningful tribal consultation when states are contemplating program reforms, and I’m pleased with how this important process informed Arizona’s approach to amending its demonstration.” (CMS.gov)

Legislation

  • Senate Finance Committee Chairman Chuck Grassley of Iowa and Senate Finance Committee Ranking Member Ron Wyden of Oregon reintroduced the Right Rebate Act on Thursday, which would close a loophole in Medicaid that has allowed pharmaceutical manufacturers to misclassify their drugs and overcharge taxpayers by billions of dollars and provide HHS with additional authorities to ensure drugs are properly classified. “Every day, working families struggle to afford medicines like EpiPen while drug manufacturers work the system to profiteer off taxpayers,” Wyden said. “This bipartisan legislation will crack down on drug makers that deliberately try and rip off Medicaid and taxpayers by misclassifying their drugs. It marks an important first step in the work that lies ahead to lower prescription drug prices for families and hold drug makers accountable.” First introduced by Grassley and Wyden at the end of last Congress, the Right Rebate Act would give the secretary of Health and Human Services more authorities and tools to monitor drug manufacturers who participate in the Medicaid Drug Rebate Program (MDRP) and would allow the secretary to require drug manufacturers to reclassify their drugs and impose civil monetary penalties when drugs are knowingly misclassified. The bill was included in the IMPROVE Act last year, which cleared the House of Representatives 400-11. (Grassley.Senate.gov)

Litigation

  • The United States Attorney’s Office for the Southern District of New York announced on Tuesday that the United States filed and settled two healthcare fraud lawsuits against national pharmacy chain Walgreens Boots Alliance, Inc. (“Walgreens”), pursuant to which Walgreens must pay the United States and state governments a total of $269.2 million.  The first settlement, approved on January 16, 2019, by U.S. District Judge Paul A. Crotty and unsealed today, requires Walgreens to pay $209.2 million to resolve allegations that it improperly billed Medicare, Medicaid, and other federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to program beneficiaries who did not need them.  The second settlement, approved on January 15, 2019, by U.S. District Judge J. Paul Oetken and unsealed today, requires Walgreens to pay $60 million to resolve allegations that it overbilled Medicaid by failing to disclose to and charge Medicaid the lower drug prices that Walgreens offered the public through a discount program. In both settlements, Walgreens admitted and accepted responsibility for conduct the Government alleged in its complaints under the False Claims Act. (Justice.gov)

 

  • Last week, Optum, a unit of UnitedHealth, filed a complaint in Massachusetts District Court against former employee David William Smith, who is now employed by ABC, Amazon, JP Morgan Chase, and Berkshire Hathaway's collaborative healthcare initiative. The complaint alleges that "Smith was a senior executive at Optum who, during his employment, was repeatedly and extensively exposed to Optum’s trade secrets and played an integral role developing Optum’s critical strategies for its Corporate Strategy and Product business units." Furthermore, they allege:

    • "On the same day that he talked with ABC, and just one minute before printing his résumé, Smith printed an Optum document marked “Confidential” that contains, among other things, Optum’s highly confidential information including an in-depth market analysis of the healthcare industry, and Optum’s potential opportunities in and solutions for the changing healthcare market; 

    • He approached several Optum employees seeking Optum’s confidential information that was unrelated to his own job duties at Optum and for which he had no legitimate business need;

    • On the same day as receiving a verbal offer from ABC, he attended an all-day, cross-team strategy meeting at which he gained access to Optum’s highly confidential competitive information; and

    • After receiving a written offer from ABC, and just one day before he informed Optum that he planned to resign, he printed an Optum document marked “Confidential” that contains, among other things, Optum’s highly confidential information concerning its product portfolio performance, new product development, and product job family and assessment plan."

Private Sector

  • Aetna, Anthem, Health Care Service Corporation (HCSC), PNC Bank and IBM yesterday announced a new collaboration to design and create a network using blockchain technology to improve transparency and interoperability in the healthcare industry. The aim is to create an inclusive blockchain network that can benefit multiple members of the healthcare ecosystem in a highly secure, shared environment. The goal is to allow the blockchain network to enable healthcare companies to build, share and deploy solutions that drive digital transformation in the industry. (Newsroom.IBM.com)

 

 

 

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