Payer Roundup—PBM reform gathering sparks new hope; Centene talks ACA subsidies

Below is a roundup of payer-centric news for the week of March 11, 2024.

UPDATED: March 15 at 5:45 p.m.

Republicans want Medicare audit

More Republicans, this time in the Senate, want answers for the recently uncovered catheter billing scheme as revealed by the National Association of ACOs.

Sen. Mike Braun, Rick Scott and J.D. Vance are calling on the Government Accountability Office (GAO) to audit Medicare, citing the urinary catheter as a primary reason.

"I’m calling for a full audit of Medicare so we can get to the bottom of the rampant fraud, waste, and abuse," said Braun in a statement (PDF). "It’s beyond alarming that this recent case of alleged Medicare fraud involving overbilling for urinary catheters went undetected for over a year and accounted for an additional $2.7 billion in taxpayer spending."

Prominent House lawmakers sent a letter to the Department of Health & Human Services (HHS) earlier this month, demanding to learn why the failure was not stopped sooner, and whether health systems and states should be concerned it is happening with other products.

The scheme, totaling nearly $3 billion, has significant implications on the long-term health of accountable care organizations.

Law Watch

  • Two telemedicine companies pled guilty March 8 for their role to defraud Medicare of $136 million, the Department of Justice announced. Advantage Choice Care and Tele Medcare and two other orthotic brace suppliers were owned by Jean Wilson, a 52-year-old from Georgia. She recruited professionals to sign prescriptions for Medicare beneficiaries. After pleading guilty to health care fraud and wire fraud, she faces a maximum penalty of 20 years in prison and to pay $66 million to Medicare and the IRS.

  • The U.S. filed a complaint this week agains six health plans for violating the False Claims Act by inflating payments for services provided to military members. The plans include: Brighton Marine Health Center, CHRISTUS Health Services, Johns Hopkins Medical Services Corporation, Martin’s Point Health Care, Pacific Medical Center and St. Vincent’s Catholic Medical Centers of New York.

  • Pennsylvania wrongly claimed $551 million in Medicaid funds through a school-based health services program, the Office of Inspector General found.

Wyden, Crapo push PBM reform again

Senate Finance Committee leaders Ron Wyden, D-Oregon, and Mike Crapo, R-Idaho, gathered with pharmacists and patients to advocate for PBM reform Thursday morning.

They said there would be an opportunity to advance reform in the next few days, despite Wyden previously lamenting the absence of PBM-related items in the recent spending package, warning the provisions might be delayed until December or longer. Both senators want PBM reform included in the upcoming spending bill later this month.

The senators referenced their committee's unanimous passage of the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act, which included provisions from the Modernizing and Ensuring PBM Accountability Act, in November.

Wyden called that accomplishment "just about impossible" during a hearing on Biden's proposed fiscal year 2025 budget later on Thursday.

Department of Health and Human Services Secretary Xavier Becerra said the administration is ready to collaborate on PBM reform and eliminate unnecessary middlemen in healthcare. He noted the White House just held an event to raise awareness of the issue.

Crapo asked the administration to more forcefully use the bully pulpit to get legislation moved through Congress.

National Association of Chain Drug Stores President and CEO Steve Anderson stated that more than 300 advocates from 50 states would be meeting with Congress this week to fight for change.

Sarah London talks ACA subsidies

Centene CEO Sarah London is again downplaying concerns over how the election will impact the Affordable Care Act (ACA).

Enhanced ACA subsidies expire by the end of 2025, after a three-year extension was implemented once the Inflation Reduction Act was signed into law. Should these marketplace subsidies expire, premiums could increase and insurers could be negatively impacted.

President Joe Biden stated his intention to make those subsidies permanent during his State of the Union address, but she said even Republicans understand their base is coming around to the subsidies' benefits. She said she thinks lawmakers on both sides of the aisle could come together to make the extension permanent.

"There are sort of different levers that could be pulled," London said. "The biggest one to note is they expire coincident with the Trump tax cuts, and so the prevailing view is that the Republicans are going to want to make those permanent. That intentionally brings both sides of the table together for a conversation.

"We don't see it as a binary event," she added.

9 issues not in Biden's budget

The Biden administration effectively balked on nine key issues in the president's proposed fiscal year 2025 budget, law experts from McDermott Will & Emery observed.

His budget did focus on drug price negotiations, Medicare solvency, cybersecurity and behavioral health, among other policies.

Here are nine areas in which the Biden administration did not lay out a comprehensive plan:

  1. Medicare Advantage

  2. Physician payment reform

  3. Merit-based incentive payment system

  4. Alternative Payment Model extension

  5. Telehealth

  6. Site-neutral policies

  7. AI strategy in healthcare

  8. Healthcare worker well-being

  9. PBM reform

Many of these policies have been debated regularly in Congress in recent months.

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