States will have a wide latitude in determining what constitutes an essential benefits package that insurers who wish to participate in exchanges will need to start offering in 2014. In a move that may make an uncertain situation even more uncertain, the Obama administration on December 16 issued guidance on what states can demand from participating health plans. But such guidance, issued as a bulletin from Health and Human Services Secretary Kathleen Sebelius, does not have the same force as a regulation. It also means that Congress cannot kill it and that HHS need not estimate the economic effects of the proposal.

America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni points to a report by the Institutes of Medicine that insurers had hoped would steer HHS’s approach. IOM in October told HHS that benefits should be carefully chosen on the basis of evidence and that their scope be limited. Loading up plans with costly benefits, the IOM noted, threatens the very centerpiece of health care reform: the individual mandate. Anyone without employer-sponsored coverage is exempt from the mandate if exchange-based plans’ premiums exceed 8 percent of income. Some of those people will be eligible for the expanded Medicaid program.

“We are carefully reviewing this guidance and agree that it is vital that the final essential health benefits requirement ‘balance comprehensiveness, affordability, and state flexibility,’” says Ignagni. “As the Institute of Medicine (IOM) made clear in its recent report, ‘state mandates are not typically subjected to a rigorous evidence-based review or cost analysis,’ an issue that should be addressed to ensure affordability for individuals, working families and small employers.”

The HHS bulletin says that “states would have the flexibility to select a benchmark plan that reflects the scope of services offered by a ‘typical employer plan.’ This approach would give states the flexibility to select a plan that would best meet the needs of their citizens.”

States could use these benchmarks:

  • One of the three largest small group plans in the state by enrollment
  • One of the three largest state employee health plans by enrollment
  • One of the three largest federal employee health plan options by enrollment
  • The largest HMO plan offered in the state’s commercial market by enrollment

If states choose not to select a benchmark, HHS intends to propose that the default benchmark will be the small group plan with the largest enrollment in the state.

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.