By DEVON HERRICK PhD

Many states have been looking for alternatives to reimbursing Medicaid providers piecemeal on a fee-for-service (FFS) basis. Increasingly they have been moving beneficiaries into Medicaid managed care plans. Today 39 states contract with managed care organizations to care for at least some Medicaid beneficiaries. States have been slower to integrate drug benefits with managed care, however. The Medicaid Drug Rebate Program requires drug manufacturers to rebate a portion of the drug costs to states and the federal government. Prior to the Affordable Care Act states did not qualify for drug maker rebates unless states managed their own Medicaid drug program on a FFS basis. States can now receive rebates for drugs purchased by Medicaid managed-care plans as well.

Medicaid is a partnership between the federal government and the states. Regardless of whether states manage Medicaid drug benefits, enrollees fill their prescriptions at local pharmacies. Pharmacies are reimbursed for the cost of each prescription, plus a dispensing fee. If the state manages Medicaid drug benefits, the state agency sets fees and reimburses pharmacies.

Today 26 states have transitioned at least some Medicaid beneficiaries away from FFS drug programs into drug plans integrated with managed care. Yet, recent legislative initiatives are bucking this trend for political reasons. Senate Bill 5 in the Kentucky legislature (and similar proposals in Ohio and Arkansas) would require the state to manage Medicaid drug benefits on a FSS basis. Indeed, nearly half of states still hang on to outdated FFS drug programs for political reasons.

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Today’s episode (we’re going 2 a week for a while here!) in which Jessica DaMassa asks me about Salesforce & Mulesoft, the VA & its API, implication of Cambridge Analytica & Facebook’s scandal, & the Trump Administration’s response in the opiate crisis, all in 2 minutes Matthew Holt

By ANISH KOKA, MD

The study that changed everything was published last week.  An alien visiting the national cardiology meeting in Orlando may have thought that the trial of note was the one that featured the culmination of one hundred years of lipid research to develop an inhibitor of the enzyme PCSK9 (Proprotein convertase subtilisin/kexin type 9) that lowers lipids and reduces the risk of future heart attacks.

The Martian would be wrong.

The trial that has cardiologists across the land choking back tears is a hypertension study done in black barbershops.  The idea is fairly simple.  Black men have the highest rates of disability related to uncontrolled hypertension, in large part related to a difficulty in engaging black men with the health care system.  The end result of poorly controlled hypertension in this community was on full display where I did much of my medical training as a student and resident in the heart of North Philadelphia.  Ensconced in the walls of Temple we learned to manage the end organs ravaged by hypertension.  I have to say I never stopped to think what we could have done to interrupt this process even though we were located in the heart of an underserved black community.

Luckily, Ronald Victor has been thinking about this problem for some time.  A Cedars Sinai physician, his research focuses on community interventions to rectify health care disparities.  His first study in 2007 sought to examine the feasibility of blood pressure screenings in black barbershops because this was where black men congregated and may be susceptible to influence by important peer influencers: barbers.

The 2007 study by Victor proved that it was feasible to enlist barbers to measure blood pressures, correctly stage hypertension, and make a referral to a clinician for treatment.  This opened up funding for the next step in the process- actually affect blood pressure control in barbershops.  The trial was wildly positive.  In stark contrast to the multibillion dollars of research that lead to a $1000/month PCSK9 inhibitor that gives us a 15% relative risk reduction of a composite outcome of stroke/death/heart attack, the Victor barbershop protocol resulted in a staggering average 27mmHg blood pressure drop in 6 months.  The potential ramifications are large for a 20mmHg drop – a 30% reduction in risk of a heart attack or a 40% reduction in risk of a stroke.

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By STEVEN FINDLAY

A critical test in Congress comes this week in year 2 of the ACA wars. Will lawmakers do the right thing?

It’s up in the air—again. Congress has until this Friday at midnight to pass a budget bill to fund the government through Sept. 30.   That bill is widely considered to be the last “must-pass” legislation before the mid-term elections.

As such, it’s probably the last chance lawmakers will have to enact measures aimed at stabilizing the ACA marketplaces for 2019.   Health plans start pulling their bids together in May and June and the deadline for final submissions is in September.

As of this writing, it’s unclear whether House Republican leaders will even include an ACA stabilization provision in their version of the budget bill. In the Senate Lamar Alexander (R-TN) and Susan Collins (R-ME) have submitted a proposal and are pressing hard for inclusion and a vote. (See details of the bill below.)

According to media reports, President Trump told the two Republicans on Saturday he would support their effort.   And Senate leader McConnell is also said to be supportive. But as drafted, the measure contains a poison pill: a provision that would forbid the use of federal dollars to help pay for insurance policies that provide abortions. Democrats say that’s a deal-breaker.

The renewed push now for ACA marketplace stabilization comes primarily because the repeal of the individual mandate penalty takes affect on Jan. 1, 2019.   That’s projected to trigger premium increases of between 7 and 15 percent, varying by state.   But, on top of that, the Trump administration has proposed policy changes that experts predict will spur additional premium increases—that, in turn will lead to coverage losses. Continue reading…

By KIP SULLIVAN, JD

This is the last installment in a three-part series that asks why we need both an insurance industry and an ACO industry. We are now stuck with the worst of all possible worlds – an inefficient insurance industry layered on top of an inefficient ACO industry.

I noted in Part I of this series that ACOs’ inability to cut costs explains why 90 percent of Medicare ACOs refuse to accept anything resembling insurance risk. In Part II I discussed ACO proponents’ expectation that many ACOs would accept full insurance risk, and I described the Medicare Payment Advisory Commission’s (MedPAC’s) reaction to ACOs’ inability to cut costs and their unwillingness to accept insurance risk. We saw that MedPAC attempted to design a plan called “premium support” that would generate competition between Medicare ACOs, Medicare Advantage plans, and the traditional Medicare fee-for-service program, and, after four years of trying (and even after dropping the FFS program from the project), gave up.

In this last installment I review a nearly identical attempt by Minnesota’s Medicaid program to set Medicaid ACOs and HMOs on a level playing field. I will close with a prediction of where the ACO industry is headed.

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By ROBERT MCNUTT MD & NORTIN HADLER MD

Take the example of a middle-aged woman undergoing chemotherapy for breast cancer. Month after month she receives a bill for $16,000. This purchases a monthly infusion of one chemotherapeutic agent.  Much of the bill is paid by her insurance, but her personal checking account will cough up about $1000 per month until she pays down her deductible.

The invoice, however, is an illusion. The amount is not the actual number of dollars required to pay for services and materials rendered. Most of the money is diverted in accordance with contractual agreements between the hospital and various agents, brokers, and insurers. The total transfer of those dollars is known but not readily accessible to any who was not privy to the negotiations. The $1000 co-pay is a tithe with totally obscure added value to be paid no matter how painfully.

Few of us know the direct cost of any medical intervention. The term “cost” is the money needed to produce a service. For example, the cost of a single chest-x-ray is amazingly cheap, just a few dollars. The materials are inexpensive, the x-ray machine can spit out exam after exam, and one person can service a multitude of patients, making the unit cost a bargain. The cost of many a test is so low that it could be given away without wobbling a hospital’s budget.

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