State reinsurance cuts premiums nearly 17% in first year of operation: Avalere

As more states explore federal waivers for reinsurance programs, a new report found such programs can reduce individual market premiums by nearly 17% in their first year of operation.

The premium reductions in the first year ranged from as low as 6% to 43%, according to an analysis from consulting firm Avalere Health.

“If they are able to secure a source of funding, state-based reinsurance programs can reduce premiums significantly in their first year, particularly in states with higher individual market enrollment,” said Chris Sloan, an associate principal at Avalere.

So far, 12 states have created their own reinsurance programs via federal waivers under the Section 1332 program of the Affordable Care Act (ACA).

States will get federal funding for the reinsurance program based on what they would have spent on advanced premium tax credits if the program weren’t in place, Avalere said.

Avalere’s analysis, which is based on individual market rate filings in states from 2017 to 2019, found that the annual cost of running a reinsurance program was $53.7 million.

Maryland saw the highest decline in individual market premiums by 43% in 2019, and Alaska had the second highest with 34% when its reinsurance program started in 2017.

Reinsurance has become an increasingly popular option for states looking to rein in costs on and off the ACA’s exchanges.

Premiums on the exchanges for benchmark plans are predicted to decline by 4% on the federally run HealthCare.gov for the 2020 coverage year compared to 2019.

Open enrollment started Friday and runs through Dec. 15.

https://www.fiercehealthcare.com/payer/state-reinsurance-programs-reduce-premiums-nearly-17-first-year-operation-avalere

CMS finalizes physician fee schedule with cuts to physical therapists, psychologists

The Trump administration finalized a new payment rule for physicians that will cut payments to physical therapists and psychologists in 2021 and also clarifies changes for evaluation and management coding.

The Centers for Medicare & Medicaid Services released the final rule on Friday for the physician fee schedule for 2020. The rule didn’t have any major changes from the proposal released back in July.

The agency decided to go forward with a proposal to align the evaluation and management coding with changes proposed by a panel. Several changes include revising the times and medical decision-making process for all of the E/M codes and require performance of history and exam only when medically appropriate.

A physician would also be able to choose the E/M visit level based on either medical decision making or time, according to a fact sheet CMS released on the proposed rule.

CMS Administrator Seema Verma told reporters during a call on Friday that the agency collaborated with the American Medical Association on the E/M changes.

CMS had proposed back in 2018 to collapse the five levels of coding for established patients and for the change to go into effect in 2021. But CMS will reduce the number of levels to four for office/outpatient visits for new patients and revise several code definitions.

The rule keeps intact controversial proposed cuts to physical therapists, psychologists and social workers.

The final rule cuts payments to physical therapists by 8% starting in 2021. The cut drew ire from several commenters who said that profit margins are already low and the cuts will force providers to close.

The rule also cuts payments for psychologists and social workers by 7% in 2021.

Verma told reporters that the cuts are preliminary and not based on the latest data.

She added that CMS is revising supervision requirements for physician assistants to defer to state law for determining the supervision level.

In 2020, the physician fee schedule conversion factor will increase to $36.09, a $0.05 increase from the 2019 fee schedule conversion factor.

https://www.fiercehealthcare.com/practices/cms-finalizes-physician-fee-schedule-rule-cuts-to-physical-therapists-psychologists

CMS retains 340B, site neutral payment cuts in final hospital payment rule

The Trump administration finalized a hospital payment rule on Friday that retains proposed cuts to off-campus clinics and the 340B drug discount program.

The changes outlined in the Hospital Outpatient Prospective Payment System (OPPS) rule come despite both cuts being struck down in legal challenges and amid major pushback from providers.

Site neutral payments

The agency decided to move ahead with the two-year phase-in of the cuts to outpatient services for clinic visits furnished in an off-campus hospital outpatient setting. The goal is to bring payments to off-campus clinics in line with standalone physician offices.

“With the completion of the two-year phase-in, the cost sharing will be reduced to $9, saving beneficiaries an average of $14 each time they visit an off-campus department for a clinic visit in [calendar year] 2020,” CMS said in a fact sheet.

However, the two-year project that was supposed to start in 2019 has been halted because of a federal court ruling.

CMS decided to move forward with the cuts for off-campus clinics.

“The government has appeal rights, and is still evaluating the rulings and considering, at the time of this writing, whether to appeal the final judgment,” the agency said.

The American Hospital Association said that the site-neutral payment rule was misguided and that CMS ignored the recent court ruling.

“There are many real and crucial differences between hospital outpatient departments and the patient populations they serve and other sites of care,” said Tom Nickels, executive vice president of the AHA, in a statement.

340B cuts

CMS also finalized a proposed cut for the 340B program that cuts payments by 22.5% in 2020.

CMS has installed prior cuts in 2018 and 2019 to the program that requires drug companies to provide discounts to safety-net hospitals in exchange for getting their products covered on Medicaid.

However, a court ruling has struck down the cuts and CMS is currently appealing the decision.

CMS said that it hopes to conduct a 340B hospital survey to collect drug acquisition cost data for 2018 and 2019 and the survey will craft a remedy if the appeal doesn’t go their way.

“In the event the 340B hospital survey data are not used to devise a remedy, we intend to consider the public input to inform the steps we would take to propose a remedy for CYs 2018 and 2019 in the CY 2021 rulemaking,” the agency said.

Hospital groups commented that CMS should drop both the 340B and site neutral cuts because of the legal challenges.

Several groups weren’t happy that the cuts were still there.

“The agency also prolongs confusion and uncertainty for hospitals by maintaining unlawful policies it has been told to abandon in clear judicial directives,” said Beth Feldpush, senior vice president of policy and advocacy for America’s Essential Hospitals, in a statement Friday.

The hospital-backed group 340B Health added that CMS needs to stop this “unfunny version of ‘Groundhog Day’ and restore Medicare payments for 340B hospitals to their legal, statutory level.”

https://www.fiercehealthcare.com/hospitals-health-systems/cms-retains-340b-site-neutral-payment-cuts-final-hospital-payment-rule

When is a tax ‘not a tax’? When Warren says so

For months, Sen. Elizabeth Warren (D—Mass.) has hedged on the question of whether she would raise middle class taxes to pay for Medicare for All, the single-payer health care plan she says she supports. Warren has stuck with a talking point about total costs, saying that the middle class would pay less, while critics, political rivals, and even liberal economists friendly to single payer have argued that the enormous additional government spending required by such a plan would inevitably hit the middle class.

Today, Warren released a plan to finance Medicare for All at a total price tag of nearly $52 trillion, including about $20 trillion of new government spending (an estimate that is probably low). Although her plan declares that no middle-class taxes will be necessary to finance the system, it includes what is effectively a new tax on employers that would undoubtedly hit middle-class Americans.

Today, American health care is financed by a mix of public and private payers. Under a single-payer system—what Warren and rival presidential hopeful Sen. Bernie Sanders (I–Vt.) call Medicare for All—virtually all health care spending would instead run through the federal government.

Right now, Warren’s plan says, employers spend about $9 trillion a decade on health insurance coverage. Her plan aims to move the private spending onto the federal budget. Under her proposal, large employers who currently pay for health coverage would be required to pay a comparable amount (equivalent to 98 percent of what they pay now, adjusted for the number of workers they employ) in order to help finance Medicare for All.

Warren shies away from calling this a tax, and she even claims “we don’t need to raise taxes on the middle class by one penny to finance Medicare for All.” Instead, she refers to it as an employer Medicare contribution, under which companies “would send payments to the federal government for Medicare.”

But there is a commonly accepted term for a plan that requires companies to send payments to the federal government in order to finance government programs. That word is tax. And that is essentially what this is—a nearly $9 trillion payroll tax (or, perhaps, a head tax with some small-business carve outs). It is thus hard to see this as anything other than a massive middle-class tax hike.

That is the argument that former Vice President Joe Biden, another Democratic presidential hopeful, is already making, with a campaign staffer responding to the release of her plan by saying, “For months, Elizabeth Warren has refused to say if her health care plan would raise taxes on the middle class, and now we know why: because it does. Senator Warren would place a new tax of nearly $9 trillion that will fall on American workers.”

Warren and her defenders will likely try to shift the discussion back to total costs, but that’s just a way of repeating the dodge that has dogged her campaign for much of the year. Warren will no doubt claim that costs would go down under her plan, but there are reasons to doubt this, including an analysis from health care economist Kenneth Thorpe finding that under a Sanders-style plan, more than 70 percent of people who currently have private insurance would see costs increase, as well as an Urban Institute analysis projecting that single-payer plans would raise national health care spending by $7 trillion over a decade.

Nor is this the only problem with her plan. As The Washington Post reports, “some analysts have warned that companies would have strong incentives, in the years before such a law’s enactment, to make it appear their health-care costs are low. Businesses may be encouraged to split off into two entities, one of which might be able to avoid the required health-care contributions because it had none the year before the program kicked off.” At minimum, the incentives and feedback effects of Warren’s plan would be complex and difficult to predict.

Warren’s plan includes other new taxes as well: a six percent tax on billionaires beyond the wealth tax she has already proposed, an increased tax on capital gains, and a 35 percent tax on corporate earnings earned overseas. She also proposes raising trillions in tax revenue through increased enforcement—far exceeding what mainstream experts have suggested is possible.

Richard Rubin

@RichardRubinDC

For comparison, CBO says that increasing IRS enforcement by 35% would generate…. $55 billion in revenue over a decade.

Warren is counting on getting 40 times that. https://www.cbo.gov/system/files/2019-06/54667-budgetoptions-2.pdf … https://twitter.com/JHWeissmann/status/1190278610051092481 …

Jordan Weissmann

@JHWeissmann

This is actually the best thing in Warren’s pay-for scheme. Our crappy tax collection system really does leave a ton of money on the table! Buttigieg and Biden could pay for their ENTIRE health care plans and more with this kind of money.

355

10:53 AM – Nov 1, 2019

Indeed, much of Warren’s plan is based on unlikely, and at times outright fantastical, assumptions about what sort of additional revenue could be raised, what health care costs could be contained, and what might be politically feasible. Among other things, she proposes raising $400 billion by passing comprehensive immigration reform, which, given the politics of immigration policy, is only a little more realistic than planning to pay off your mortgage by winning the lottery. The Washington Examiner‘s Philip Klein has published a useful roundup of Warren’s less plausible ideas; the takeaway is that even if Warren somehow managed to raise the enormous amounts of tax she proposes, it probably would still not be anywhere close to enough to finance her plan. (More on this in a future post.)

In some ways, Warren’s plan amounts to a list of technically sophisticated magic asterisks. It is as much an attempt to obscure the economic and political feasibility of passing and implementing a single-payer health care plan as a good-faith attempt to describe what it would practically require.

Yet in another way, it reveals something about both Warren and the economic reality of single-payer: Despite running a campaign based on wonky academic credentials and detail-oriented policy chops, Warren has, until now, repeatedly refused to directly answer questions about precisely how she would finance Medicare for All and whether she would foist new taxes on the middle class. Turns out she didn’t dodge the question because the answer was complex or hard to explain. She dodged it because the answer was so simple it could be expressed in a single word: yes.

Elizabeth Warren Wants To Pay for Medicare for All With a $9 Trillion Tax That Will Hit the Middle Class

New way to slow and reverse fibrosis identified

In cell and mouse models, Mayo Clinic researchers and collaborators have identified a way to slow and reverse the process of uncontrolled internal scarring, called fibrosis.

This disease process has few effective therapies, no cure and can be fatal when it occurs in organs such as the liver (cirrhosis) or lungs (pulmonary fibrosis). The findings appear Wednesday, Oct. 30, in Science Translational Medicine.

In the past, researchers identified two proteins that regulate gene action and provide “instructions” for fibrosis, called yes-associated protein (YAP) and transcriptional co-activator with PDZ-binding motif (TAZ). However, YAP and TAZ are involved in too many other beneficial actions and can’t be universally blocked. So the scientists, led by Daniel Tschumperlin, Ph.D., a Mayo Clinic researcher, focused on cells that form the scar tissue, called fibroblasts. After an injury, these cells migrate to the damaged area and produce collagen to re-form the scaffolding around cells and repair tissue. In fibrosis, fibroblasts release collagen in amounts that interfere with an organ’s function.

We started this work almost five years ago with seed funding from Mayo’s Center for Biomedical Discovery because fibrosis is an important and poorly understood disease process. We had identified the transcriptional regulatory proteins YAP and TAZ as important to the progression of fibrosis, but there were no viable approaches to target this pathway for therapy.

Daniel Tschumperlin, Ph.D., a Mayo Clinic researcher

The publication reports on a new target: a dopamine receptor. The authors found that the receptor is unique to lung and liver fibroblasts. Stimulating it blocks YAP and TAZ, reducing and reversing the growth and scar-forming abilities of fibroblasts. Stimulating the dopamine receptor in fibroblasts appeared to switch them from a matrix-depositing state that supports fibrosis to a matrix-degrading state that supports resolution or reversal of fibrosis. In lung and liver fibrosis models, the approach reversed the fibrotic process in these organs.

“Dopamine is mostly studied in disorders of the central nervous system, and we were surprised to find dopamine receptors expressed in fibroblasts,” says Dr. Tschumperlin. “We also found that the lung may be able to produce dopamine locally, and this function appears to be compromised in individuals with pulmonary fibrosis. Thus, the pathway we are targeting might be part of a normal response that would limit fibrosis, but is somehow missing in patients.”

This result, the researchers say, opens up a new treatment concept for fibrotic disease conditions. They hope to build on the decades of work that already has gone into developing dopamine receptor-targeting drugs in the brain to develop new dopamine-related therapies for fibrosis. “In addition to following up on regulation of dopamine signaling in the lung, we are actively developing novel molecules to target the dopamine receptor, as we think there is substantial promise in trying to translate this approach to human diseases,” says Dr. Tschumperlin.

Source:

Mayo Clinic

Journal reference:

Haak, A. J. et al. (2019) Selective YAP/TAZ inhibition in fibroblasts via dopamine receptor D1 agonism reverses fibrosis. Science Translational Medicine. doi.org/10.1126/scitranslmed.aau6296

https://www.news-medical.net/news/20191030/New-way-to-slow-and-reverse-fibrosis-identified.aspx

JPMorgan Tests Its Amazon-Berkshire Health Venture on Bank Employees

JPMorgan Chase & Co. and Amazon.com Inc. have begun testing the new health-care venture they’re developing with Warren Buffett’s Berkshire Hathaway Inc., rolling out some of the new offerings to employees in a handful of states.

Under the program, called Haven Healthcare, JPMorgan is offering its 30,000 workers in Ohio and Arizona two plans for 2020 run by Cigna Corp. and Aetna Inc., according to people familiar with the matter, who asked not to be identified discussing non-public information. The group comprises just under 20% of the bank’s U.S. workforce.

Amazon is offering health plans for employees in Connecticut, North Carolina, Utah and Wisconsin that were created by Amazon in consultation with Haven and insurance providers, said a representative for the tech and online retail giant.

The efforts at both companies appear to be early steps in the venture’s goal of overhauling health-care benefits to make them more transparent, better at keeping people healthy and lowering costs. JPMorgan, Amazon and Berkshire founded Boston-based Haven in 2018, but details about the effort have been scant. Headed by physician and writer Atul Gawande, the venture has been run in secrecy with almost no sign of what it might do.

At JPMorgan, Haven is planning to monitor employees’ receptiveness to the new offering and whether they find it more transparent, one of the people said. At Amazon, where some employees are already enrolled, the goal is to help employees better understand their health costs and to work better with primary-care doctors.

Joe Evangelisti, a JPMorgan spokesman, confirmed plans to roll out the program to bank employees in the two states. A representative for Berkshire didn’t respond to a request for comment.

Company Discontent

Unlike the existing insurance plan for JPMorgan’s U.S. employees, the new Haven programs don’t require employees to pay deductibles. They offer perks like earning money each month by fulfilling certain wellness activities such as keeping blood pressure below a certain target, said one of the people. That money can be used to offset doctor visits or the cost of prescriptions. Such benefits and incentives aren’t unusual in the corporate world.

JPMorgan Chief Executive Officer Jamie Dimon has long railed against the U.S. health-care system, saying shortcomings like soaring costs, bureaucracy, fraud and a lack of transparency around the price of medical procedures are impeding the U.S. economy.

In May, he said a team of about 40 people was analyzing the three companies’ insurance plans, wellness offerings and pharmacy benefit management deals to identify ways to improve health-care outcomes for its employees. He has said better aligning incentives and empowering employees to make better choices could help.

Cost Transparency

Under Haven plans for the JPMorgan employees, co-pays range from $15 to $110 for most services, according to one of the people. Some more expensive care, such as a hospitalization, comes with higher charges.

Gawande became well known for a series of articles in the New Yorker magazine exploring why health-care costs varied significantly from place to place in the U.S. On Haven’s website, he says their work will take time and the organization will “be relentless.” The mission is to “deliver simplified, high-quality, and transparent health care at a reasonable cost.”

High health-care expenses are a major focus for workers and employers. Work-based family health-insurance premiums topped a record $20,000 in a 2019 survey of employers conducted by the Kaiser Family Foundation. On average, workers’ average annual contribution was $6,000 for a family plan.

The Haven venture has also raised fears among health insurers, drug makers and other parts of the industry that JPMorgan, Amazon and Berkshire would use their collective power to disrupt established players.

“This is not meant to be a profit-seeking thing,” Dimon said at a conference in May. “It was meant to be a improved health-care thing, stronger employees. We hope we’ll have something we can share with the world.”

https://finance.yahoo.com/news/jpmorgan-tests-amazon-berkshire-health-154348038.html

Wright Medical up on report of sale exploration

Wright Medical Group (NASDAQ:WMGI) has risen 11.3% postmarket after a Bloomberg report that it’s exploring a sale.

The maker of shoulder and ankle joint implants is worth about $2.64B, and shares rose 5.8% during the regular session.

The shares had declined 27% over the past six months.

https://seekingalpha.com/news/3513334-wright-medical-plus-11-percent-report-sale-exploration