Phia GroupPhia Group Mediahttps://phiagroup.com/Media/PostsIDR Entities Still Struggling with Volume – Highlights from the Q4 2022 Reporthttps://phiagroup.com/Media/Posts/PostId/1260/idr-entities-still-struggling-with-volume-highlights-from-the-q4-2022-reportBlog,Cost Containment,Plan,Supreme CourtMon, 17 Jul 2023 16:57:15 GMT<p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><b></b>By: Andrew Silverio<b></b></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><b>IDR Entities Still Struggling with Volume – Highlights from the Q4 2022 Report</b></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">Under the No Surprises Act (NSA), the Departments of Health and Human Services, Labor, and Treasury are required to post quarterly data on the Federal Independent Dispute Resolution (IDR) process.  In response to the federal court decision in <i>Texas Medical Association, et al. v. United States Department of Health and Human Services</i>, portions of the governing regulations were vacated, resulting in a February 10, 2023 order for IDR entities to cease issuing new payment determinations (see <a href="https://www.cms.gov/nosurprises/help-resolve-payment-disputes/payment-disputes-between-providers-and-health-plans" style="color:#0563c1; text-decoration:underline">https://www.cms.gov/nosurprises/help-resolve-payment-disputes/payment-disputes-between-providers-and-health-plans</a>).  This was lifted as of February 24, 2023 for services furnished before October 25, 2022, and as of March 17, 2023 for services furnished on or after October 25, 2022.   Because there was essentially a freeze on IDR proceedings for a good portion of Quarter 1 of 2023, the report issued for Quarter 4 of 2022, available at <a href="https://www.cms.gov/files/document/partial-report-idr-process-octoberdecember-2022.pdf" style="color:#0563c1; text-decoration:underline">https://www.cms.gov/files/document/partial-report-idr-process-octoberdecember-2022.pdf</a>, is the most recent and complete picture we have of how the process is performing.  The full report is certainly worth reviewing, but here are some noteworthy data points:</span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><b>110,034 disputes were initiated in Q4 2022</b></span></span></span></p> <ul> <li style="margin: 0in 0in 0in 0.5in; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">This is a 53% increase from Q3 2022<b></b></span></span></span></li> <li style="margin: 0in 0in 8pt 0.5in; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">The vast majority were for OON Emergency or non-Emergency items or services, with just around 6% (6,864 in total) being for OON air ambulance services<b></b></span></span></span></li> </ul> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><b>IDR entities closed our 31,714 disputes in Q4 2022</b></span></span></span></p> <ul> <li style="margin: 0in 0in 0in 0.5in; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">Over three times more payment determinations were made (12,662) than in the prior quarter</span></span></span></li> <li style="margin: 0in 0in 0in 0.5in; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">However, the total number of closed disputes is still just around 29% of the number of new disputes submitted in this same time period</span></span></span></li> <li style="margin: 0in 0in 8pt 0.5in; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">Of the 31,714 closed disputes, 12,662 (40%) reached a payment determination, while 9,525 (30%) were found ineligible for IDR proceedings</span></span></span></li> </ul> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><b>The overwhelming majority of proceedings (>99%), not surprisingly, were initiated by providers</b></span></span></span></p> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif"><b>A few entities are dominating the IDR Submission process, both as complainant and respondent </b></span></span></span></p> <ul> <li style="margin: 0in 0in 0in 0.5in; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">One entity, SCP Health, initiated 30% of all disputes for OON emergency and non-emergency items or services<b></b></span></span></span> <ul style="list-style-type:circle"> <li style="margin:0in 0in 0in 0.5in"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">United Healthcare was the most frequent non-initiating party, at 25% of disputes<b></b></span></span></span></li> </ul> </li> <li style="margin: 0in 0in 0in 0.5in; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">One entity, Global Medical Response, initiated 42% of all air ambulance disputes<b></b></span></span></span> <ul style="list-style-type:circle"> <li style="margin:0in 0in 8pt 0.5in"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">Zelis was the most frequent non-initiating party, at 12% of disputes<b></b></span></span></span></li> </ul> </li> </ul> <p style="margin: 0in 0in 8pt; text-align: justify;"><span style="font-size:11pt"><span style="line-height:107%"><span style="font-family:"Calibri",sans-serif">It will be important to keep an eye on how these data trends develop, and how the backlog caused by the work stoppage in quarter one of this year will impact new numbers. </span></span></span></p> 1260One Year Post-Dobbs Decisionhttps://phiagroup.com/Media/Posts/PostId/1256/one-year-post-dobbs-decisionBlog,Health Insurance,Plan,Supreme CourtWed, 05 Jul 2023 13:36:05 GMT<p style="margin:0in"><span style="font-size:11pt"><span calibri="" style="font-family:">By: Kelly Dempsey</span></span></p> <p> </p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span calibri="" style="font-family:">June 27, 2023 marked one year since the Supreme Court of the United States (SCOTUS) overturned the constitutional right to abortion in the case of Dobbs v. Jackson Women’s Health Organization. Over the last 12 months, half of the states have passed some type of abortion restriction or complete ban and many more are in the process of creating legislation. Some of these laws include the possibility for civil or criminal penalties against women who obtain abortions, doctors who perform abortions, or even individuals who, broadly, facilitate abortions. </span></span></p> <p> </p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span calibri="" style="font-family:">It may be a year old now, but the Dobbs case seems as controversial now as it did the week it came out. While the landscape has continued to evolve state-by-state, with different states reacting in different ways, the various areas of concern for health plans remain the same as they have been since the Dobbs decision. </span></span></p> <p> </p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span calibri="" style="font-family:">From a federal law perspective, aside from the preventive care requirement imposed on health plans to cover FDA-approved birth control methods, the Affordable Care Act does not require health plans to cover an abortion procedure. To contrast, the Pregnancy Discrimination Act of 1978 does require health plans to cover abortion where the life of the mother would be endangered if the fetus is carried to term and where there are medical complications. In the post-Dobbs landscape, self-funded plans that want to cover abortion (including related travel) face significant challenges, and ERISA preemption does not apply as clearly as many expect it to (or hope it does, anyway). ERISA preemption does not, for instance, extend to state criminal laws such as those banning the facilitation of abortion.</span></span></p> <p> </p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span calibri="" style="font-family:">Compliance with state abortion law isn't the only compliance consideration, though. For instance, some plans have explored increasing their abortion benefits, in particular by adding travel benefits; it is important to keep in mind that the requirement to perform an NQTL analysis (to uncover mental health parity issues) may highlight that abortion travel benefit as a way that mental health and substance abuse claims are perhaps not afforded the same benefits as medical and surgical benefits, since most plans do not offer travel benefits for MH/SUD claims. Additional considerations include the impact to HSA qualified HDHPs, telemedicine, and stop-loss. </span></span></p> <p> </p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span calibri="" style="font-family:">It would be absurd to suggest that the self-funded industry has had an easy time navigating all the changing laws, but the Dobbs decision – especially coming out at the same time as other complex laws like the No Surprises Act (which presents yet another, albeit very different type of, landmark change to the self-funded universe) – requires a great deal of extra caution and consideration related to benefit offerings. As we see it, it stresses the importance of making informed decisions by working with claims administrators, brokers, and consultants (like The Phia Group) prior to making decisions about controversial or legally-complex plan provisions.</span></span></p> <p> </p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span style="font-family:"Calibri",sans-serif"></span></span></p> <p style="margin:0in"><span style="font-size:11pt"><span calibri="" style="font-family:">Phia has always recommended that plan documents be reviewed on an annual basis, and every year we seem to be proven right all over again. Our goal is to help ensure that yours or your clients’ plans provide robust benefits without running afoul of applicable laws, but that gets harder and harder all the time! Luckily, we’re up to the challenge, and we know you are too.</span></span></p> 1256Merck vs. Bidenhttps://phiagroup.com/Media/Posts/PostId/1252/merck-vs-bidenBlog,Health Insurance,Healthcare Costs,Supreme CourtFri, 23 Jun 2023 13:33:08 GMT<p style="margin-bottom:0in; text-align:justify; margin:0in 0in 8pt; margin-right:0in; margin-left:0in"><span style="font-size:11pt"><span style="line-height:normal"><span calibri="" style="font-family:">By: David Ostrowsky and Jessie Boyle</span></span></span></p> <p style="margin-bottom:0in; text-align:justify; margin:0in 0in 8pt; margin-right:0in; margin-left:0in"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"></span></span></span></p> <p style="margin-bottom:0in; text-align:justify; margin:0in 0in 8pt; margin-right:0in; margin-left:0in"><span style="font-size:11pt"><span style="line-height:normal"><span calibri="" style="font-family:">The globally recognized, multi-billion-dollar pharmaceutical company Merck & Co. sued the U.S. government on June 6th in an effort to halt the Medicare drug price negotiation program contained in the Inflation Reduction Act. The drug negotiation program aims to form agreements with drugmakers to lower costs on their most expensive drugs, which will save billions of dollars for Americans, particularly those on Medicare, while sapping Big Pharma of billions in potential revenue. In the first attempt by a drugmaker to challenge the law, Merck is pushing to be declared exempt from the drug price negotiation program, which they claim would lower their drug prices by 25 to 60 percent below market value. </span></span></span></p> <p style="margin-bottom:0in; text-align:justify; margin:0in 0in 8pt; margin-right:0in; margin-left:0in"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"></span></span></span></p> <p style="margin-bottom:0in; text-align:justify; margin:0in 0in 8pt; margin-right:0in; margin-left:0in"><span style="font-size:11pt"><span style="line-height:normal"><span calibri="" style="font-family:">The lawsuit by Merck & Co. was filed against the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS), as well as HHS Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure. The lawsuit argues that under the new law, drugmakers would be forced to negotiate prices for drugs below market rates – a violation of the Fifth Amendment, which requires the government to pay just compensation for private property that is acquired for public use. Not only does Merck feel that it was forced to the negotiation table under the guise of voluntary participation, but the global pharmaceutical behemoth also believes that the First Amendment’s protection of free speech was breached by it being compelled to sign an agreement conceding the prices are equitable.</span></span></span></p> <p style="margin-bottom:0in; text-align:justify; margin:0in 0in 8pt; margin-right:0in; margin-left:0in"><span style="font-size:11pt"><span style="line-height:normal"><span calibri="" style="font-family:">Indeed, Merck is bracing for a storm this September when the first-ever Medicare drug price reduction process, accounting for CMS’s 10 most costly drugs, ensues. Following negotiations on said drugs, new prices will go into effect in 2026, potentially slashing industry sales by $4.8 billion in the first year. For Merck, however, 2028 looms as an even more troubling year as its highest-selling drug, cancer immunotherapy Keytruda (last year, Keytruda sales eclipsed $20 billion – more than a third of Merck's aggregate sales), could be subject to negotiations … and a subsequent drastic price reduction. Alas, it’s not just a long-term problem: later this year, Merck’s Type 2 diabetes drug, Januvia, which accounted for $2.8 billion in revenue in 2022, will also be subject to negotiations. </span></span></span></p> <p style="margin-bottom:0in; text-align:justify; margin:0in 0in 8pt; margin-right:0in; margin-left:0in"><span style="font-size:11pt"><span style="line-height:normal"><span style="font-family:"Calibri",sans-serif"></span></span></span></p> <p style="margin:0in; text-align:justify; margin-right:0in; margin-left:0in"><span style="font-size:12pt"><span new="" roman="" style="font-family:" times=""><span style="font-size:11.0pt"><span calibri="" style="font-family:">Is Merck’s legal battle – which could find its way to the Supreme Court – an example of proverbial corporate greed? Or is it a good faith effort to not stifle innovation while defending its balance sheet and the best interests of its employees and shareholders? While such questions are debatable, it is readily apparent that HHS will defend Biden’s drug price negotiation law in the name of reduced health care costs for seniors and people with disabilities. After all, this provision in last summer’s landmark Inflation Reduction Act was designed to provide life-altering financial relief for Americans who are already paying much more for prescription drugs than citizens of other countries, many of which have similar price caps in place. As David Mitchell, founder of the advocacy group “Patients For Affordable Drugs Now,” explained in a recent CBS News report: “The reality is, drug corporations that are subject to Medicare’s new authority – and who already negotiate with every other high income country in the world – will engage in a negotiation process after setting their own launch prices and enjoying nine years or more of monopoly profits … Medicare negotiation is a desperately needed, long-awaited rebalancing of our drug price system that will help millions of patients obtain the medications they need at prices they can afford while ensuring continued innovation.” </span></span></span></span></p> <p> </p> <p style="margin:0in; text-align:justify; margin-right:0in; margin-left:0in"><span style="font-size:12pt"><span new="" roman="" style="font-family:" times=""><span style="font-size:11.0pt"><span style="font-family:"Calibri",sans-serif"></span></span></span></span></p> <p style="margin:0in; text-align:justify; margin-right:0in; margin-left:0in"><span style="font-size:12pt"><span new="" roman="" style="font-family:" times=""><span style="font-size:11.0pt"><span style="font-family:"Calibri",sans-serif"></span></span></span></span></p> <p><span style="font-size:12pt"><span new="" roman="" style="font-family:" times=""><span style="font-size:11.0pt"><span calibri="" style="font-family:">To Mitchell’s point, of the nearly 60 million Americans currently enrolled in Medicare, an overwhelming majority struggle to balance ever-rising costs of prescription drugs with those of basic necessities (i.e., food, shelter, clothing) -- a situation only exacerbated by recent inflationary pressures. As such, the imminent Medicare drug price negotiation program is a welcome development for the masses: billions of dollars in savings for seniors reliant on prescription drugs will not only improve their lives, but also prolong them. </span></span></span></span></p> <p><span style="font-size:11.0pt"><span style="line-height:107%"><span calibri="" style="font-family:">That said, it appears that Merck will not be stopped from having its day in court.</span></span></span></p> 1252