Medicare Part D Responsible For 60 Percent of Medicare’s Spending Slowdown | Health Policy Blog |

April 15, 2015

When Medicare added Part D, the prescription-drug benefit, via the Medicare Modernization Act (2003), its framers decided that every beneficiary would receive the benefit from a private plan, not from the government directly.

The benefits of this design continue to show themselves. In Health Affairs, Loren Adler and Alex Rosenberg conclude that the Part D benefit is responsible for 60 percent of the reduction in the rate of Medicare spending since 2011.

via Medicare Part D Responsible For 60 Percent of Medicare’s Spending Slowdown | Health Policy Blog |

Gilead’s $1,000 Hep C Pill Is Hard for States to Swallow – WSJ

April 9, 2015

A pricey pill made by Gilead Sciences Inc. caused Medicaid spending on hepatitis C treatments to soar last year, even as most states restricted access to the drug, leaving many low-income patients untreated.

State Medicaid programs spent $1.33 billion on hepatitis C therapies through the third quarter of last year, or nearly as much as the states spent in the previous three years combined, a Wall Street Journal analysis of federal data shows.

The growth was primarily driven by Gilead’s Sovaldi, a highly effective therapy that has a wholesale cost of $84,000 per person over the course of treatment, or $1,000 per pill. The price has sparked an outcry from insurers, members of Congress and others worried about the cost of treating an estimated three million Americans with hepatitis C, which can lead to cirrhosis or cancer of the liver.

via Gilead’s $1,000 Hep C Pill Is Hard for States to Swallow – WSJ.

The GOP’s Gift To Henry Waxman – I | Doug’s Brief Case

April 6, 2015

The $141 billion health care bill that cleared the House last month and that is expected to win Senate approval next week is a tribute from the GOP-controlled Congress to former Congressman Henry Waxman, a man who worked tirelessly – and with great success – to expand health care-related welfare spending.

Because the measure deals predominantly with Medicare, most have overlooked its nearly $30 billion hike in social welfare outlays.  The bill (H.R. 2)  increases Medicare payments to physicians, largely by replacing one complicated and flawed formula with another.  It directs the army of bureaucrats who populate CMS cube farms to soldier on with their futile, half-century-long quest to implement a workable system of administered pricing.

via The GOP’s Gift To Henry Waxman – I | Doug’s Brief Case.

Supreme Court Turns Back Payment Suit By Medicaid Providers – Health Affairs Blog

April 1, 2015

While all eyes in the health policy community have been fixed on the Supreme Court, awaiting its decision in King v. Burwell regarding the legality of premium tax credits granted through the federally facilitated marketplaces, a case of arguably equal importance has been quietly awaiting a decision.  On March 31, 2015, a closely divided Supreme Court decided in Armstrong v. Exceptional Child Center, Inc. that health care providers cannot sue state Medicaid programs in federal court to enforce  42 U. S. C. §1396a(a)(30)(A) which requires states to “assure that payments are consistent with efficiency, economy, and quality of care” while “safeguard[ing] against unnecessary utilization of . . .care and services.”

Justice Scalia’s majority opinion, written for himself, Chief Justice Roberts, and justices Thomas and Alito, would have arguably swept away nearly a half century of Medicaid law and hold that lawsuits could not be brought by providers in federal court to enforce the requirements of the Medicaid program.  A dissenting opinion, written by Justice Sotomayor for herself and Justices Kennedy, Kagan, and Ginsburg would have held that providers could have a cause of action under some circumstances to enforce the Medicaid law’s provider payment requirements against the states.  Justice Breyer, the deciding vote for the majority, wrote a narrow opinion, joining Justice Scalia’s opinion only in part, leaving the law somewhat unsettled as to rights under the Medicaid program going forward.

via Supreme Court Turns Back Payment Suit By Medicaid Providers – Health Affairs Blog.

Have House Republicans Cast Their First Vote For Obamacare? – Forbes

April 1, 2015

Former Speaker of the U.S. Representatives Newt Gingrich said something last week that many feared, but few have been willing to admit: Republicans in Congress have no intention of repealing and replacing Obamacare with patient-centered health reform.

Faced with an interviewer who seemed to believe opposition to Obamacare is actually opposition to Barack Obama, and who suggested that after this president leaves office, opposition will soften, Mr. Gingrich accused his former colleagues of misrepresenting their commitment.

Now that we are in the twilight of the Obama presidency, and Republicans have majorities in both chambers of Congress, they should be able to put such charges to rest. Unfortunately, last week’s overwhelming bipartisan support in the House of Representatives for a deal to lock in Obamacare’s way of paying doctors sends a terrible signal.

via Have House Republicans Cast Their First Vote For Obamacare? – Forbes.

Bounce the ‘doc fix’—but don’t increase the deficit – AEI | Health Care Blog » AEIdeas

March 16, 2015

The Medicare physician fee schedule uses the resource-based relative value system (RBRVS), which relies on expert committees from the American Medical Association, to decide how much an office visit is worth compared with heart surgery.  This convoluted price setting mechanism remains in place.  Only the annual increase in overall payments is modified by the permanent doc fix.

The bottom line is clear.  By not finding offsets for the entire cost of the doc fix-CHIP proposal, Congress is opening the door to even greater deficit spending in the future.  As important as the proposal is, it fails to address the problems of price fixing that distort medical decisions and drive up health care costs.  If we cannot reform the entire Medicare physician payment system, we should at least find other savings in the program to avoid adding greater burdens on taxpayers and their children.

via Bounce the ‘doc fix’—but don’t increase the deficit – AEI | Health Care Blog » AEIdeas.

How Much Favorable Selection is Left in Medicare Advantage? – American Journal of Health Economics – Abstract

March 4, 2015

The health economics literature contains two models of selection, one with endogenous plan characteristics to attract good risks and one with fixed plan characteristics; neither model contains a regulator. Medicare Advantage, a principal example of selection in the literature, is, however, subject to anti-selection regulations. Because selection causes economic inefficiency and because the historically favorable selection into Medicare Advantage plans increased government cost, the effectiveness of the anti-selection regulations is an important policy question, especially since the Medicare Advantage program has grown to comprise 30 percent of Medicare beneficiaries. Moreover, similar anti-selection regulations are being used in health insurance exchanges for those under 65.

Contrary to earlier work, we show that the strengthened anti-selection regulations that Medicare introduced starting in 2004 markedly reduced government overpayment attributable to favorable selection in Medicare Advantage. At least some of the remaining selection is plausibly related to fixed plan characteristics of Traditional Medicare versus Medicare Advantage rather than changed selection strategies by Medicare Advantage plans.

via MIT Press Journals – American Journal of Health Economics – Abstract.