Week In Washington: New Medicare Demo Announced

April 11, 2019

The big news in the past week was CMS’ announcement about bids and a risk corridor demonstration. On April 5th CMS released a notice that included two large pieces of guidance:

  1. 2020 Bids: All Medicare plans should bid as if the rebate rule is not in effect. Since the proposed rebate rule comment window closed April 8th and the rule would require 60 days after publication for implementation (i.e., be effective) there is no time for the final rule to be in effect by June 3rd.
  2. Risk Corridor Demonstration: Also announced was a voluntary demonstration of a narrow Part D risk corridor with the government assuming a greater amount of risk sharing. However, the demonstration triggers only if the Safe Harbor protection of manufacturer rebates is eliminated effective January 1, 2020. Further details will be forthcoming (when to opt-in, what the 2021 provisions will be, etc.) As the Department received over 25,000 comments, it will need to make decisions quickly if the final rule is to be published before June 3.

Summary of Final Rate Notice: Earlier this month CMS released the 2020 Medicare Advantage Final Rate Notice. You can read Wakely’s summary of the regulation here.

Hill Activity: The Hill Activity focused on PBMs. Executives of major PBMs testified before a Senate committee on their activities and their role in influencing prescription drug pricing (needless to say the hearing was tense). Senators from both parties are interested in putting forth legislation this year on ways to curb prescription drug prices.

  1. Medicaid: passed a unique Medicaid waiver this week. The waiver, if approved by CMS, is likely to face legal challenges on many fronts. The Medicaid expansion includes work requirements. It also includes referral requirements for family planning. Finally, it proposes to allow individuals 100-138% FPL to choose if they want to opt into Medicaid coverage (via off-Exchange private coverage similar to Arkansas’ model) or select coverage on the Exchange (in which case they would be eligible for APTC premium subsidies). The latter of the two provisions has not been attempted before for a waiver.

Blues Plans to Open Primary Clinics: Forbes reported this week that the venture capital arm of five BCBS plans would collaborate with Sanitas USA to open primary care medical centers in Texas. If successful the venture would likely expand to other states.

Random Research of the Week: New research found that the ACA implementation in 2014 reduced re-enlistment rates in the US Army. The research found that the reduced fear of losing benefits resulted in a decrease of re-enlistment rates by about 3% for young enlisted soldiers.