Net Medicare Part D costs for fiscal year 2008 are estimated to be 30 percent less — $189 billion lower — than projected when the benefit was created back in 2003, according to independent actuaries.

In addition, based on competitive bids by health care plans in 2007, the average monthly premium will be approximately $22, down from $23 in 2006, if enrollees remain with their current plans.

The updated Medicare Part D baseline of payments to Part D plans for the fiscal year 2008 budget cycle was decreased from last summer's mid-session review numbers by $113 billion over the next 10 years (from 2007 to 2016). CMS actuaries say $96 billion of the $113 billion reduction is a direct result of competition and significantly lower Part D bids.

"Part D drug plans produced greater than expected savings for by competing for Medicare beneficiaries and aggressively negotiating with drug companies," says acting CMS Administrator Leslie V. Norwalk.

Two other factors lowered the estimated cost of Part D payments to plans: lower growth in drug costs in general, and lower enrollment than originally expected.

When the actual drug costs for 2005 were reviewed, Medicare saw a $13 billion reduction in the new baseline, compared to last summer's mid-session review estimates.

The reduced Part D cost estimates reflect lower growth in drug costs than had been expected, with a single-digit percentage increase (5 percent in 2005) observed for only the second time in more than a decade. Slow growth in actual drug prices and costs is expected to continue as more generic drugs become available.

Lower-than-expected enrollment also reduced Medicare Part D payments to plans by $20 million. CMS actuaries found that many Medicare beneficiaries had secondary sources of prescription drug coverage, such as the Federal Employees Health Benefit, Tricare, and the Veterans Health Administration.

They did not need to sign up for what would have been duplicate coverage under Part D.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.