Top Stories in Business & Health for August 24, 2017 

House members question 7 pharma firms about soaring MS drug prices

Reps. Elijah Cummings, D-Md., and Peter Welch, D-Vt., sent letters to seven leading drug companies requesting more information about their pricing strategies for the multiple sclerosis (MS) drugs they market. Those who received the letters were Bayer, Biogen, EMD Serono (known as Merck KGaA outside of the U.S.), Novartis, Sanofi, Teva and Roche (whose Genentech unit markets drugs in the U.S.). Based on data from the National Multiple Sclerosis Society, four drugs that have long been considered standard treatments for the disease have had dramatic price increases since they were approved: Teva’s 20 mg formulation of Copaxone (glatiramer acetate) has risen 1002 percent since it was approved in 1996; Bayer’s Betaseron (interferon beta-1b) has jumped 691 percent since 1993; Biogen’s Avonex (interferon beta-1a) is up 889 percent since 1996; and EMD Serono’s Rebif (interferon beta-1a) has increased 496 percent since 2003. According to FiercePharma, the lawmakers refer to a study in their letter that shows the timing of the price increases was similar among the companies, and that from 2008 to 2012, sales of MS drugs more than doubled, from $4 billion to almost $9 billion.

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CMS wants to cancel mandatory cardiac bundled payment models, revise joint replacement bundles

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule last Tuesday to cancel the mandatory Episode Payment Models and Cardiac Rehabilitation incentive payment model that was slated to start in January. The rule would also cut the number of mandatory geographic areas participating in the Comprehensive Care for Joint Replacement (CJR) Model in half, from 67 to 34, make participation in the other 33 CJR geographic areas voluntary, and make participation for low-volume and rural hospitals voluntary regardless of geographic area. Even though research has demonstrated that bundled payment models lower costs, CMS has delayed implementation of the cardiac bundles and expansion of the CJR bundles numerous times this year in response to concerns among stakeholders. The proposed CMS rule is open to public comment for 60 days.

Eliminating ACA’s subsidies to insurers would increase deficit by $194 billion over 10 years, CBO analysis reveals

The Congressional Budget Office (CBO) reported last Tuesday that if the Trump administration stops making cost-sharing reduction (CSR) payments to insurers, the federal deficit could increase by $194 billion through 2026. The payments were established under the Affordable Care Act (ACA) to help offset insurers’ costs for offering more affordable coverage to lower-income individuals. Ending the payments would force some insurers to exit the ACA exchanges and those who remain to significantly increase their premiums. The tax credits available to most people who buy coverage through the exchanges increase as the cost of premiums increases, which means the federal government collects less in taxes. The CBO analysis is based on the assumption that the Trump administration would announce this month—before the Sept. 6 rate filing deadline—that CSR payments would continue through the end of the year but end in January. In theory, that would give insurers a chance to adjust their rates accordingly. 

CMS launches Hospice Compare

CMS’ Hospice Compare website is up and running, as of last Monday. The site is intended to help consumers make better-informed decisions about hospice care by allowing them to compare hospice providers on metrics such as the percentage of patients screened for pain or difficult/uncomfortable breathing, or whether patients’ preferences are being met, CMS said in a news release. Currently, the site displays only data from CMS’ Hospice Item Set, but it will eventually incorporate data from the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey, as well. CMS has not yet implemented its Five-star Quality Rating System for the Hospice Compare site. 

Centene to fill in gaps in Nevada’s insurance exchange offerings

After Anthem announced last week that it would not participate at all in Nevada’s insurance exchange next year, Centene said its SilverSummit Healthplan subsidiary would offer its Ambetter product in all 17 Nevada counties. That covers the 14 “bare” counties, including Carson City, that otherwise would have had no insurers offering plans on the exchange for 2018. When Anthem announced in June that it was pulling out of 14 rural counties, the insurer’s intention was to continue offering coverage in Clark, Washoe and Nye counties. The subsequent decision to exit the Nevada exchange altogether affected more than 31,000 Nevada residents, including more than 20,000 in those three counties, according to the Las Vegas Review-Journal. Health Plan of Nevada, the only other insurer that will offer coverage on the Nevada exchange in 2018, will offer plans in Clark, Washoe and Nye counties.

Billionaire Chen raises his stake in CHS to 22.1 percent

Chinese businessman and billionaire Tianqiao Chen purchased another 9.8 million shares in Franklin, Tenn.-based Community Health Systems (CHS) last week, raising his stake in the company to 22.1 percent. The transaction was made through the Shanda Group, a privately owned investment firm the Chen family founded as an online games company in 1999. To date, Chen has been a passive investor in CHS, but the additional shares give him the leverage to become an activist investor. A statement on Shanda Group’s website says “the company maintains a good relationship with the [CHS] management team and intends to engage with [CHS] regarding business and operations, and the status of [CHS]’s ongoing turnaround strategy.” HealthcareDIVE reported that CHS has accumulated nearly $15 billion in debt since it acquired Health Management Associates in January 2014 in a deal worth $7.6 billion. The health system has been divesting hospitals in an attempt to attenuate its financial struggles and avoid bankruptcy.

 

Other News

Seventeen health care organizations have agreed to help restructure Massachusetts’ Medicaid program into accountable care organizations (ACOs). Starting on March 1 of next year, the ACOs will manage the MassHealth Medicaid program, which has more than 850,000 beneficiaries. A $50 billion federal Medicaid waiver approved last November authorizes $1.8 billion over five years to support the transition to ACOs, including more than $100 million through the end of this year. The list of approved MassHealth ACOs can be viewed here.

The Department of Health and Human Services (HHS) has further delayed a rule that would establish new drug ceiling prices in the 340B drug discount program, according to Modern Healthcare. The rule, which was supposed to go into effect in April, had already been pushed back until October and has now been delayed until next July. In addition to setting the drug ceiling prices, the rule would also give HHS the authority to fine drug manufacturers if they purposely charge a hospital more than the ceiling price for a given drug. 

Walgreens launched its Center for Health & Wellbeing Research website last week. The site features more than 50 Walgreens outcomes studies that have been completed in the last six years. The research involves collaborations with institutions such as Johns Hopkins Medicine and the Johns Hopkins Bloomberg School of Public Health, the Scripps Translational Science Institute, the School of Pharmacy at the University of California, San Francisco, and University of Chicago Medicine.

Aledade will collaborate with the New Jersey Academy of Family Physicians to form a primary care physician-led statewide ACO in New Jersey. Aledade, a value-based care network with 15 ACOs, will provide physicians with software, data and other resources to help them transition to value-based reimbursement. The company said it has already recruited local, independent primary care practices to join the ACO and will continue to add practices, with the goal of launching the ACO in January.

UnitedHealth Group CEO Stephen Helmsley will step down as of Sept. 1 and David Wichmann, who is currently president of the company, will take over the position. Wichmann will also become a director of the company at that time. Helmsley will then become the executive chairman of the board of directors, a newly created position.