More in Part D reaching catastrophic phase, likely setting up calls for reform

Medicare Part D beneficiaries are more easily reaching their catastrophic phase, increasing government spending on the program, and possibly setting up calls for reform.

According to a new analysis from Avalere Health, the number of Medicare Part D enrollees without low-income subsidies reaching their catastrophic coverage phase has jumped from 515,000 to about 800,000, a more than 50% increase from 2013 to 2016.

Beneficiaries enter the catastrophic phase when their out-of-pocket costs exceed $5,000 during their coverage year. After that, beneficiaries pay no more than 5% of total costs, with the government paying 80% and the plan playing 15%.

And Avalere told FierceHealthcare that the number of enrollees reaching this phase will only go up.

“Drug prices are continuing to go up, and the Affordable Care Act and other legislation is helping enrollees reach this phase more quickly,” Kelly Brantley, a vice president at Avalere and one of the authors of the analysis, told FierceHealthcare.

Under the ACA, drugmakers are responsible for 50% of Part D drug costs during a beneficiary’s coverage gap, which has tamed out-of-pocket spending. The Bipartisan Budget Act of 2018 expanded that to 70%, making it easier to reach the catastrophic phase and leading to more government spending on Part D drugs.

The ACA temporarily slowed the growth rate of the catastrophic threshold until 2020, after which it is scheduled to spike back up under the pre-ACA rate formula. The combination of the temporary rate fix and ever-increasing government spending on the program is likely to lead to calls for a reform of the system.

“The more people hitting this phase the more attention it brings to the issue of how to make the Part D program more sustainable,” Brantley said. “We’re getting closer to the inevitability that the federal government will address this.”

https://bit.ly/2jSuZP5

Report suggests standardizing Medicare Advantage bidding process

• A new report from the USC-Brookings Schaeffer Initiative for Health Policy and the Center for Health Policy at Brookings proposes two changes to the Medicare Advantage (MA) bidding process, which the researchers said would lower prices and offers more choices for consumers.
• The authors propose changing the process to improve price competition and standardize MA benefits that would improve comparison shopping for Medicare beneficiaries.
• The report estimates the changes would save the federal government $10 billion annually. The researchers also said the plan would reduce Part B premiums for both traditional and MA beneficiaries by about 2% per year.

Despite payer and beneficiary interest and reported successes in MA, the report said the current MA bidding process is problematic. The issue leads to “inefficiently high plan bids, a complex choice environment for consumers and uneven subsidization of MA enrollees based on location.”

The authors suggested an improved process by “incentivizing (Medicare Advantage organizations) to compete on price for a standardized product, rather than competing primarily on benefit generosity, as is largely the case today.”

MA now makes up about one-third of Medicare enrollment. There were nearly 21 million members at the end of 2017, an 8% increase over the previous year.

It’s not just beneficiaries who are increasingly interested in MA. Payers have also found success, with multiple companies expanding MA membership. UnitedHealthcare and Humana dominate the market, but Aetna has increased its MA reach this year, adding nearly 250,000 members in the first quarter. That’s better than Humana’s 157,700 MA-member gain, but less than the 330,000 beneficiaries that the No. 1 MA payer, UnitedHealthcare, picked up in the quarter.

MA membership is expected to keep rising in the coming years. UnitedHealthcare predicts eventually half of all Medicare beneficiaries will have an MA plan.

CMS also views MA as a success, and is increasingly looking for ways to make the program even more beneficial for payers. In fact, payers will get a 3.4% payment increase in MA next year. This is higher than the proposed 1.84% increase.

CMS wants to give MA plans more flexibility in devising supplemental benefits that go beyond direct medical coverage. A recent CMS final rule gives plans the ability to offer non-medical benefits like meal delivery and transportation to specific beneficiaries. The move, which goes into effect June 15, could also help ride-hailing companies like Uber and Lyft, which have increasingly viewed patient transportation to doctor visits as a potential growth area.

Another major company is interested in MA. Walmart is reportedly discussing a possible deal for Humana, which would give it access to the second-largest MA beneficiary population.

https://bit.ly/2jPlsYN

Evidence lacking on benefits of diabetes self-management apps: AHRQ

• Of the hundreds of diabetes self-management apps currently in the market, just 11 have been subjected to clinical studies — none of which were particularly rigorous, according to a recent technical brief by the Agency for Healthcare Research and Quality.
• And of those 11 apps, just five were associated with meaningful improvements in HbA1c.
• Not a single study demonstrated improvements in quality of life, blood pressure, weight or body mass index, the agency says.

For all the hype about digital health apps, providers still need solid data and evidence to back up treatment. And if this review is reflective of medical apps more generally, that’s not happening to the degree it should be.

According to AHRQ, all of the studies had methodological shortcomings, from brevity (two to 12 months) to inconsistent reporting and use of co-interventions that made it difficult to understand the results.

“Our results highlight that relatively few apps available through app stores have evidence of efficacy, which is consistent with findings of other systemic reviews,” the brief says. “For example, we did not find evidence for many of the apps that appear first when searching Google and Apple app stores, such as Diabetes: M, Diabetic Diet, MySugr, Blood Glucose Tracker, Sugar Sense, Diabetes and Blood Glucose Tracker, Carb Manager, or Diabetes In Check.”

To improve the quality of future studies, AHRQ recommends they be longer than one year. Diabetes is a chronic disease, and the risk of serious complications grows over time, the paper says. Studies should also report the app version, timing of any updates and notable changes to features or content as well as include complications such as hypoglycemic episodes,

In addition, randomized trials should control for interactions between patients and providers, and there should be wider dissemination of research results, AHRQ says.

Diabetes management has been a popular area for mobile health developers. Last year, CNBC reported Apple had hired a team of biomedical engineers to develop noninvasive blood sugar monitors. Around the same time, Merck and Amazon Web Services announced a contest for developers to create products for people recently diagnosed with Type 2 diabetes using Alexa voice-enabled technology. Proper use of such apps could save billions in health spending every year, but the lack of reliable research is a setback. The industry is discussing mobile health guidelines, including suggestions for basing content on evidence-based practices.

Providers are looking to digital apps to help with social determinants and population health, remote patient monitoring and other clinical benefits. But many are rightfully skeptical of the impact digital tools have on health outcomes. “In order for me to confidently use the product and put my own reputation on the line when recommending use to colleagues and patients, I need to have validation evidence that shows its safety and efficacy,” Alex Ding, a private practice diagnostic and interventional radiologist in the San Francisco Bay area, told Healthcare Dive in an interview last year.

Of the five apps that underwent health outcomes testing, two — Glucose Buddy and Sanofi and Voluntis’ Diabeo Telesage — are for Type 1 diabetes and three — WellDoc’s Blue Star, Chinese-made WellTang and India-based Gather Health — are for Type 2 diabetes.

https://bit.ly/2IcZLfS

Amazon reportedly forms Alexa health team

• Amazon’s foray into the healthcare space is expanding, as the commerce giant has reportedly launched a health & wellness team within its Alexa voice-assistant department, CNBC reports.
• The team is tasked with boosting Alexa’s healthcare-related items, such as chronic disease management. In addition, they are reportedly being asked to help navigate HIPAA regulations.
• Cigna recently launched an Amazon Alexa “skill” aimed at increasing consumer health literacy, and Mayo Clinic last year developed an Alexa program to give basic first aid advice.

The team’s establishment shows Amazon continues to be interested in the healthcare field. Despite recent news that it is dropping its plan to distribute pharmaceuticals to hospitals, Amazon is exploring expansion of medical supply delivery. Earlier this year, the company hired a physicianwho had run Iora Health clinics in Seattle, though his role with Amazon was not disclosed.

Smart speakers are set to have explosive growth in the coming years. Currently the U.S. spends $2 billion per year on the devices, but that number is set to grow to $40 billion in four years, CNN reports.

Smart speakers hold promise in the health field. They are increasingly being used to help specific populations like seniors and people with disabilities. Amazon’s move to form a healthcare team within its voice assistant division shows it is trying to boost the role Alexa may play in the future of healthcare. It’s not the first attempt. Last year, Amazon teamed with Merck to spur development of mobile apps that use Alexa to help patients manage Type 2 diabetes.

Amazon, J.P. Morgan and Berkshire Hathaway are in planning mode for their effort to form a new company aimed at bringing down healthcare costs. Berkshire CEO Warren Buffett said at a recent shareholder meeting that a CEO would be appointed in the coming months.

https://bit.ly/2Kc3LOn

Adamis target doubled by Maxim

Maxim doubles Adamis price target to $10, sees partnership coming for Symjepi. As previously reported, Maxim analyst Jason McCarthy raised his price target on Adamis Pharmaceuticals to $10 from $5, stating that he sees growing revenue in the compounding business continuing to partially offset cash burn and expects that a partnership for Symjepi will come with an upfront payment that could extend the company’s cash runway. While the billion-dollar anaphylaxis market is “ready for a lower-cost, high-quality alternative like Symjepi,” there is also additional upside in the pipeline not yet factored into the stock, said McCarthy, who keeps a Buy rating on Adamis.

https://bit.ly/2rEzXSG

CVS: ‘Commends’ Trump on drug cost cut effort

In response to President Trump’s special address on the high cost of prescription drugs, CVS Health issued the following statement: “At CVS Health we see every day the impact rising drug costs have on our patients. That’s why we have developed and supported innovative solutions to lower health care costs and we look forward to partnering with leaders to continue to do so. We commend the Trump Administration’s focus on reducing the cost of prescription drugs, and we agree more can and needs to be done. CVS Health is already well positioned to implement many of the key proposals outlined by the Administration. Today, CVS Health provides universal availability of rebates at the point of sale as an option for all clients to help their members save on out of pocket costs. We believe this approach leads to greater transparency in drug prices, and unquestionably demonstrates the true cause of rising drug costs for consumers: high list prices set by pharmaceutical manufacturers. CVS Health also provides patients with information on what they will pay out-of-pocket under their insurance plan for their prescription drugs and can also provide therapeutic alternatives that may be less expensive. This information reaches prescribers through an innovative e-prescribing system that can be utilized at the point of prescribing and at the pharmacy counter to quickly and seamlessly evaluate individual prescription savings opportunities in real time, saving patients up to $75 per prescription. CVS Health also supports several new initiatives that will help patients save money on their prescriptions, including reforms to Medicare Part D rebates that provide savings for seniors, not a windfall for drug manufacturers, and establishing an out-of-pocket cap for beneficiaries in Medicare Part D, which would meaningfully benefit seniors with extremely high drug costs. And as we have previously said, CVS Health does not engage in gag clauses and we support efforts to ban them. We believe that, working together with the Administration and Congress, we can advance effective solutions that meet our shared goals.”

https://bit.ly/2KTxjlb

Express Scripts: Trump ‘rightly recognizes’ drug firms charge too much

Express Scripts released a statement in response to the Administration’s announcement today on prescription drug costs: “President Trump rightly recognizes drug companies charge way too much, and their prices need to come down. Express Scripts leads the way in reining in costs and improving care. By taking on tough challenges, we helped employers save $32 billion on their prescription drug bill in 2017 alone. We take decisive action to improve affordability and access for the 83 million Americans we serve. For more than 30 years, Express Scripts has been a champion in the fight to lower drug costs. Express Scripts stands up to drug companies and drug stores to make sure that everyone – patients, employers, health plans, unions and public programs – get a fair deal for the money they spend. It is clear, based on today’s comments, that our role has never been more important to improving healthcare. In particular we were pleased that the Administration recognized and endorsed policies that we have advocated for over the years, including increasing access to biosimilars, increasing the number of generic drugs available, and eliminating gag clauses and clawbacks — anti-patient practices that we do not engage in. We look forward to working with the Administration to enact pro-patient, pro-payer policies.”

https://bit.ly/2KUxCMk