Apr17

Insulin Use Among Medicare Eligible Is Skyrocketing

Insulin use is increasing a significant rate here is a great article by KFF.

How Much Does Medicare Spend on Insulin?

The rising cost of prescription drugs is currently a major focus for policymakers. One medication that has come under increasing scrutiny over its price increases is insulin, used by people with both Type 1 and Type 2 diabetes to control blood glucose levels. Among people with Medicare, one third (33%) had diabetes in 2016, up from 18% in 2000. The rate of diabetes is higher among certain groups, including more than 40% of black and Hispanic beneficiaries. Although not all people with diabetes take insulin, for many it is a life-saving medication and essential to maintaining good health. Three companies—Eli Lilly, Novo Nordisk, and Sanofi—manufacture most insulin products, and there are no generic insulin products currently available, despite the fact that insulin was discovered in the 1920s. Committees in both the House and the Senaterecently convened hearings on prescription drug costs that focused on rising insulin prices and affordability concerns for patients, and congressional investigations are underway.

This data note examines spending on insulin by Medicare and beneficiaries enrolled in private Part D drug plans, based on data from the Centers for Medicare & Medicaid Services (see Data and Methods). Because drug-specific rebate data for Medicare are proprietary, the analysis examines Medicare spending without rebates, but also uses average Part D rebates reported by Medicare’s actuaries to illustrate the potential effects on total Part D insulin spending. While rebates may help to lower Part D premiums, they do not lower enrollees’ out-of-pocket drug costs, which are based on list prices.

Key Findings

Total Medicare Part D spending on insulin increased by 840% between 2007 and 2017, from $1.4 billion to $13.3 billion (Figure 1)—including what Medicare, plans, and beneficiaries paid.

Figure 1: Total Medicare Part D spending on insulin increased 840% between 2007 and 2017, from $1.4 billion to $13.3 billion

With rising prices and the introduction of more costly insulin products over time, average total Medicare Part D spending per user on insulin products increased by 358% between 2007 and 2016, from $862 to $3,949.
Aggregate out-of-pocket spending by Part D enrollees on insulin quadrupled between 2007 and 2016, from $236 million to $968 million, reflecting both an increase in the number of users and price increases for insulin. Among enrollees without low-income subsidies, average per capita out-of-pocket spending on insulin nearly doubled between 2007 and 2016 (from $324 to $588; an increase of 81%).
Among all insulin products, Lantus Solostar, a long-acting insulin manufactured by Sanofi, accounted for the largest share of both total Part D spending and out-of-pocket spending by enrollees who used insulin. Spending on Lantus Solostar, which was used by 1.1 million Part D enrollees in 2017, accounted for 20% of total Part D spending on insulin therapies in 2017 and 25% of out-of-pocket spending on insulin by non-low income subsidy enrollees in 2016.

Total Medicare Part D Spending on Insulin

Including what Medicare, plans, and beneficiaries paid, Medicare Part D spending on insulin increased by 840% from $1.4 billion in 2007 to $13.3 billion in 2017. Learn more in this @KaiserFamFound analysis

According to our analysis, total Medicare Part D spending on insulin increased by 840% between 2007 and 2017, from $1.4 billion to $13.3 billion—including what Medicare, plans, and beneficiaries paid. In light of rising prices for existing insulin products and the introduction of more costly insulin therapies over time, average annual total Part D spending on insulin products per user increased by 358% between 2007 and 2016—from $862 to $3,949—while average total Medicare Part D spending per insulin prescription increased by 280% over these years—from $96 to $363 (Figure 2).

Figure 2: Average annual total Medicare Part D spending on insulin products per user increased 358% between 2007 and 2016

The total number of Part D enrollees using any insulin therapy nearly doubled between 2007 and 2016, from 1.6 million enrollees to 3.1 million—a much smaller increase in percentage terms (86%) than the percent increase in total Part D spending on insulin over the 2007-2016 period (753%) (Table 1). The total number of insulin prescriptions covered by Part D also increased over these years (from 14.8 million in 2007 to 33.3 million in 2016), but the percentage increase (125%) was also substantially lower than the percent increase in total insulin spending.

Total Part D spending on top insulin therapies. In 2017, the top five insulin therapies covered under Part D accounted for 62% of total Part D spending on insulin, or $8.2 billion out of the $13.3 billion total spending on insulin (Figure 3). Among all insulin products, Part D spending was highest for Lantus Solostar, a long-acting insulin manufactured by Sanofi, with $2.6 billion in Part D spending in 2017. This one drug alone, used by 1.1 million Part D enrollees in 2017, accounted for 20% of total Part D spending on insulin that year. Lantus Solostar was also among the top five drugs overall in terms of total Part D spending in 2017.

Figure 3: The top 5 insulin products accounted for 62% of total Medicare Part D spending on insulin in 2017

Average total Part D per capita costs for insulin therapy in 2017 ranged from $693 for Humulin R, a short-acting regular insulin manufactured by Eli Lilly—used by 102,000 Part D enrollees in 2017—to $10,014 for Humulin R U-500, a concentrated regular insulin for people who need large doses of insulin, also manufactured by Eli Lilly—used by 14,500 beneficiaries in 2017.

Total Part D spending by insulin manufacturer. In 2017, total Part D spending on all of the different insulin products from the three main manufacturers was $5.5 billion for Novo Nordisk, $4.8 billion for Sanofi, and $3.0 billion for Eli Lilly (Figure 4). Between 2007 and 2017, spending on insulin therapies from all three manufacturers increased dramatically. Over this time period, cumulative total Part D spending was $27.0 billion for insulin products from Novo Nordisk, another $27.0 billion for Sanofi, and $15.0 billion for Eli Lilly.

Figure 4: In 2017, total Medicare Part D spending on insulin from the three main manufacturers was $5.5 billion for Novo Nordisk, $4.8 billion for Sanofi, and $3.0 billion for Eli Lilly

Trends in insulin spending per dosage unit. Of the 22 insulin therapies listed in the CMS Part D drug spending dashboard in both 2013 (the first year of dashboard data) and 2017 (the most recent year), 19 products had increases of more than 10% in annual Part D spending per dosage unit between 2013 and 2017, according to CMS estimates (Table 2). Six insulin products had increases of more than 10% in average spending per dosage unit between 2016 and 2017 alone (Figure 5).

Figure 5: For six insulin products, average Medicare Part D spending per dosage unit increased by more than 10% between 2016 and 2017

These percentage increases in average spending per dosage unit for insulin products represent price increases that can translate to large increases in total spending per claim over time—even if the change in average spending per dosage unit measured in dollars may be relatively low—since there are typically multiple dosage units associated with each claim. For example, while Afrezza has the lowest average spending per dosage unit in 2017 of all the insulin products in the CMS dashboard data ($3.54), the 2016-2017 change of 21.6% was the largest in percent terms—and it translates into a large difference in spending per claim for Afrezza between 2016 and 2017—from $566 per claim in 2016 to $690 per claim in 2017, a $124 increase (Table 2).

Out-of-Pocket Spending on Insulin by Medicare Part D Enrollees

Part D enrollees’ total annual out-of-pocket costs for insulin. Since Medicare Part D plans cover a portion of enrollees’ total drug costs, enrollees pay less than the retail price of drugs covered by their plan, and those who receive Part D low-income subsidies (LIS) face relatively low out-of-pocket costs. Still, in the aggregate, out-of-pocket spending among all Part D enrollees on insulin quadrupled between 2007 and 2016, from $236 million to $968 million, reflecting both an increase in the number of users and price increases for insulin (Figure 6). Between 2007 and 2016, Part D enrollees spent a combined $5.5 billion out of pocket on insulin therapy.

Figure 6: In the aggregate, Medicare Part D enrollees’ out-of-pocket spending on insulin quadrupled between 2007 and 2016—from $236 million to $968 million

Part D enrollees’ average per capita out-of-pocket costs for insulin. Among Part D enrollees who did not receive LIS, average per capita out-of-pocket spending for insulin alone was $588 in 2016, but including costs for all other prescriptions, total per capita out-of-pocket spending among those who used insulin was $1,334. Non-LIS enrollees’ average per capita out-of-pocket spending on insulin in 2016 was nearly double the amount in 2007 ($324; an increase of 81%).

For several insulin products, average per capita out-of-pocket spending by non-LIS enrollees increased by more than 100% between 2007 and 2016; for example, average per capita out-of-pocket spending on Lantus Solostar increased by 291% from $106 to $413 (Figure 7).

Figure 7: Average per capita out-of-pocket spending by non-LIS Medicare Part D enrollees for certain insulin products more than doubled between 2007 and 2016

In 2016, average annual per capita out-of-pocket spending by non-LIS enrollees who used insulin therapies ranged from $110 for Levemir Flexpen, a long-acting insulin manufactured by Novo Nordisk, to $822 for Humulin R U-500 (Table 3).

Part D enrollees’ out-of-pocket spending on top insulin therapies. In 2016, the top five insulin therapies accounted for 67% of aggregate out-of-pocket spending on insulin by non-LIS enrollees that year, or $0.6 billion out of the $0.9 billion in out-of-pocket spending on insulin by non-LIS enrollees (Figure 8). Aggregate out-of-pocket spending was highest for Lantus Solostar, accounting for 25% ($230 million) of non-LIS enrollees’ total out-of-pocket spending on insulin therapy in 2016.

Figure 8: The top 5 insulin products accounted for 67% of non-LIS Medicare Part D enrollees’ out-of-pocket spending on insulin in 2016

Illustrating the Potential Effect of Rebates on Total Insulin Spending

Our analysis is based on retail claims data and aggregated spending data that do not take into account manufacturer rebates and discounts to plans, which are considered proprietary and therefore not publicly available. There is data suggesting that insulin manufacturers have provided large rebates and discounts to payers that have produced net prices that are significantly lower than the high list prices that have attracted public scrutiny. Regardless of the magnitude of rebates for insulin products, however, rebates do not help to lower enrollees’ out-of-pocket costs for insulin. This is because the amount that enrollees pay out of pocket is either a flat dollar copayment (depending on their plan’s cost-sharing design) or, if they are paying full cost in the deductible phase or a coinsurance amount, their cost is based on pre-rebate list prices rather than post-rebate net prices.

Because CMS does not disclose drug-specific rebates, we are unable to know exactly the degree to which our estimates of total Part D spending on insulin therapy might overstate actual costs to Medicare and plans. We can approximate the potential effect of rebates on total Part D spending by assuming that all Part D plans had received for all insulin products the average rebate reported by Medicare’s actuaries each year between 2007 and 2017. Based on this assumption, insulin spending would have increased from $1.3 billion in 2007 (applying the 9.6% average rebate in 2007) to $10.3 billion in 2017 (applying the 22.8% estimated average rebate in 2017). This amounts to a 702% increase in total Part D spending on insulin between 2007 and 2017, compared to an 840% increase based on the pre-rebate total spending amounts ($1.4 billion and $13.3 billion, respectively). If actual rebates for insulin products were larger than these averages, total spending would be lower than these estimates.

Implications

Rising prices for insulin have attracted increasing scrutiny from policymakers in recent months. Our analysis demonstrates that rising insulin prices since 2007 have translated into significantly higher out-of-pocket spending for beneficiaries in Medicare Part D plans and higher spending for the program overall (not taking into account rebates). The number of people Medicare covers for insulin therapy has increased as the number of Medicare beneficiaries with diabetes has risen. Average annual total Part D spending per insulin user increased by 358% between 2007 and 2016, while average out-of-pocket costs for insulin by non-low income subsidy Part D enrollees nearly doubled.

Members of Congress and the Trump Administration have introduced several proposals that could help to address concerns about rising prices for insulin products and affordability concerns for patients, including banning rebates from drug manufacturers unless they are shared directly with patients at the point of sale, taking steps to increase the availability of generic products, allowing Medicare to negotiate drug prices, and allowing patients to import drugs from other countries. Rising prices for insulin therapy in recent years and the resulting increases in Medicare Part D and beneficiary out-of-pocket spending illustrate why the cost of prescription drugs is an ongoing concern for patients and public and private payers, and a pressing issue for policymakers

Feb15

CMS Approves More Options For Emergency Care

By Tom Matteson - Uncategorized

Great News!!!

CMS Announces New Model to Reduce Unnecessary Emergency Department Use

Julie Carter February 14, 2019

Today, the Centers for Medicare & Medicaid Services (CMS)—the agency that oversees the Medicare program—announced a new model within traditional Medicare that could help people with Medicare avoid unnecessary trips to the Emergency Department. This new model would allow emergency transportation services to take individuals to their primary care doctor or urgent care, or to deliver treatment in place, when the person does not need to be seen in an emergency room.

Currently, most emergency transportation after a 911 call is limited to taking the patient to the Emergency Department of a nearby hospital. This can mean that Medicare beneficiaries are exposed to the expense and stress of an emergency room visit when they may really need to see their primary care doctor or to receive limited treatment in their homes. The Emergency Triage, Treat and Transport (ET3) model would allow participating ambulance suppliers and providers to partner with providers to deliver treatment in place when appropriate. This could be either on-the-scene or through telehealth. When such treatment is not appropriate but the condition does not require immediate transportation to an Emergency Department, the model would allow the ambulance to deliver the patient to alternative destination sites such as primary care doctors’ offices or urgent-care clinics.

The details of such models are extremely important and CMS must ensure that people with Medicare receive appropriate care when they face a medical emergency. We welcome efforts to keep people out of the Emergency Department when safe and feasible, though we cannot be sure yet if this model will have the necessary safeguards.

We will continue to monitor this model and other models CMS publishes to ensure they support high-quality, affordable care for people with Medicare.

Jan24

Medicare Advantage Plan Open Enrollment Period Has Been Extended For 2019 And Going Forward

By Tom Matteson - Uncategorized

Changes to the Medicare Advantage Open Enrollment Period in 2019

The typical Medicare Advantage Disenrollment Period (January 1 – February 14 every year) will be replaced with a different arrangement in 2019. This will be effective starting in 2019, according to the Centers for Medicare & Medicaid Services.

The Medicare Advantage Disenrollment Period allows you drop your Medicare Advantage plan and return to Original Medicare. It also allows you sign up for a stand-alone Medicare Part D Prescription Drug Plan.

What’s the new Medicare Advantage Open Enrollment Period?

In 2019, a new Medicare Advantage Open Enrollment Period will run from January 1st – March 31st every year. If you are enrolled in a Medicare Advantage plan, you’ll have a one-time opportunity to:

Switch to a different Medicare Advantage plan
Drop your Medicare Advantage plan and return to Original Medicare, Part’s A and B
Sign up for a stand-alone Medicare Part D Prescription Drug Plan . Most Medicare Advantage plans include prescription drug coverage already. Usually you can’t enroll in a stand-alone Medicare Prescription Drug plan if you already have a Medicare Advantage plan, but there are some situations where you can. Please contact us at 855-830-6099 if you have any questions on how these changes will impact you.

Oct22

AARP/UHC Are Forced To Drop Popular “Silver Sneakers Program”

By Tom Matteson - Uncategorized

AARP/UHC has dropped their very popular program Silver Sneakers. Silver Sneakers provided gym memberships to many facilities across the country, as well as other benefits, for policy holders. This will no doubt impact their cancel rates as their premiums are typically on the higher side. It appears Humana and Aetna maybe the only companies left that will offer Silver Sneakers with Medi-gap policies (Aka Medicare supplement plans). Initially the majority of the companies and plans offering SS will be in the Medicare advantage plan arena(AKA part C of Medicare). Here are the list of companies below still offering the Silver Sneakers program:

Aetna
Avmed
Bay Care Plus
Care Plus
Aetna Coventry
Devoted
Florida Blue
Humana
Optimum
Freedom Health
Health Sun
Simply Healthcare
Ultimate Health Plans
WellCare

If you would like to find out more about how this change will impact you please give MIC a call. 1-855-830-6099, or email us at info@medicareic.net

Oct12

Seniors Are Finally Getting A Raise In Their Social Security Benefits

By Tom Matteson - blog

Social Security Benefits to Rise 2.8% in 2019

Social Security beneficiaries will net their largest COLA in seven years beginning in January.

Sean Williams

Oct 11, 2018 at 8:37AM

Social Security is arguably the nation’s most important social program, with data showing that 62% of aged beneficiaries lean on their monthly payouts to account for at least half of their income. Further, a report from the Center on Budget and Policy Priorities finds that 22.1 million people, including 15.1 million seniors, are kept out of poverty thanks to their Social Security checks.With this in mind, it’s only fitting that the most important event of the year for these folks is the cost-of-living adjustment (COLA) announcement (i.e., the “raise” the beneficiaries will receive next year) from the Social Security Administration (SSA) during the second week of October. That announcement just happens to be today, October 11.

A Social Security card wedged in between cash bills.

IMAGE SOURCE: GETTY IMAGES.

Understanding how Social Security’s COLA is calculated

However, beneficiaries don’t have to wait for the official announcement from the SSA to calculate their Social Security COLA for 2019. Once the Bureau of Labor Statistics (BLS) has released its September 2018 inflation data, we have all the information needed to determine how much of a raise Social Security recipients will receive next year.

You see, Social Security’s inflationary tether, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), only takes into account three months of inflation data rather than a full year. The average reading of the CPI-W during the third quarter of the previous year (July through September) acts as the baseline figure, while the average reading from the third quarter of the current year is the comparison. It takes the BLS a good week or so to compile all the data for the CPI-W’s main spending categories and subcategories, which is why the data release doesn’t come out until the second week of the following month.

If the average reading from the third quarter of the current year rises from the average CPI-W reading from the previous year, then beneficiaries receive a raise that’s commensurate with the percentage increase, rounded to the nearest 0.1%. And should prices fall year over year, as happened in 2010, 2011, and 2016, benefits remain static from one year to the next.

The good news for beneficiaries is that prices most definitely rose on a year-over-year basis. Let’s dive in to take a precise look at how the 2019 Social Security COLA was determined.

IMAGE SOURCE: GETTY IMAGES.

Here’s your 2019 Social Security COLA

We begin by laying out the three important CPI-W readings from the third quarter of 2017 that form the baseline figure.

July 2017 CPI-W: 238.617
August 2017 CPI-W: 239.448
September 2017 CPI-W: 240.939

If these figures are added up and divided by three (since there are three months taken into account), then the average CPI-W reading works out to 239.668.

With the release of September’s CPI-W data today (October 11), we now have the final piece of the puzzle to figure out the comparison figure for 2018.

July 2018 CPI-W: 246.155
August 2018 CPI-W: 246.336
September 2018 CPI-W: 246.565

Like before, if we add these figures up and divide by three, we get an average of 246.352. If we then subtract the average third-quarter reading in Q3 2017 from the average CPI-W reading in Q3 2018, we’re left with 6.684. Divide this figure by the average reading of 239.668 from the third quarter of last year, and we get a 2019 COLA of 2.8% when rounded to the nearest 0.1%.

For context, this is the highest annual raise that beneficiaries have received in seven years.

IMAGE SOURCE: GETTY IMAGES.

Before you get too excited, remember this

Of course, Social Security recipients, or should I say more specifically aged beneficiaries, aren’t going to want to break out the champagne just yet. That’s because the CPI-W has a natural flaw, which results in seniors losing purchasing power over time on their Social Security income.

According to a report from The Senior Citizens League, the purchasing power of Social Security dollars has declined by an almost jaw-dropping 34% since 2000. Put another way, what $100 worth of Social Security benefits could buy 18 years ago can now only buy $66 worth of those same goods. Inflation (i.e., the rising price of goods and services) has eaten the rest.

You’re probably scratching your head and wondering how the CPI-W, which is designed to measure inflation, has allowed Social Security’s COLA to so vastly underrepresent the inflation that senior citizens are facing. The answer lies with the group of folks the CPI-W is following.

As the name implies, the CPI-W measures the spending habits of urban wage earners and clerical workers, who spend their money very differently than seniors do. This results in substantially more weight being placed in spending categories unimportant to aged beneficiaries, like education and transportation, while critical expenses like medical care and housing don’t get as much attention as they should. As a result, the purchasing power of Social Security dollars remains in constant decline for the seniors who rely on the program.

In other words, seniors should definitely relish the fact that they’re on track to receive their biggest COLA since 2012, but they’re not going to gain any ground they’ve lost due to inflation since 2000.

The $16,728 Social Security bonus most retirees completely overlook
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Oct2

What’s Best For Me? Plan F Or Plan G?

By Tom Matteson - Uncategorized

Oct2

We Are Here For Our Clients

By Tom Matteson - Uncategorized

Sep12

What’s Best For Me: Medicare Advantage Plan Or Medicare Supplement?

By Tom Matteson - blog

Aug22

States and the Trump Administration Rush To Cap Prescription Drug Costs

By Tom Matteson - blog

Many States along with the Trump Administration are trying are trying to curb the cost of prescriptions drugs. Here is an article by the NY Times that should be helpful in understanding what is going on.

States Rush to Rein In Prescription Costs, and Drug Companies Fight Back

Image

Twenty-four states have passed 37 bills this year to curb rising prescription drug costs, according to Trish Riley, the executive director of the National Academy for State Health Policy.CreditJulio Cortez/Associated Press

By Robert Pear Aug. 18, 2018

WASHINGTON — States around the country are clamping down on pharmaceutical companies, forcing them to disclose and justify price increases, but the drug manufacturers are fighting back, challenging the state laws as a violation of their constitutional rights.

Even more states are, for the first time, trying to regulate middlemen who play a crucial role by managing drug benefits for employers and insurers, while taking payments from drug companies in return for giving preferential treatment to their drugs.

The bipartisan efforts by states come as President Trump and his administration put pressure on drug companies to freeze prices and reduce out-of-pocket costs for consumers struggling to pay for drugs that often cost thousands of dollars a month.

The burst of state activity on drug costs recalls the way states acted on their own to pass laws to expand health insurance coverage in the years before Congress passed the Affordable Care Act in 2010.

“In the absence of federal action, states are taking the lead in combating high drug prices,” said State Representative Sean Scanlon of Connecticut, a Democrat.

A bill passed unanimously this year by the Connecticut General Assembly illustrates a popular tactic: States are shining a spotlight on drug price increases as a first step toward controlling costs.

Under the Connecticut law, drug companies must justify price increases for certain drugs if the price rises by at least 20 percent in one year or 50 percent over three years. Insurers must identify their 25 highest-cost drugs and the 25 with the greatest cost increases when they file their annual rate requests with the state Insurance Department.

In addition, the middlemen, known as pharmacy benefit managers, must disclose the amount of rebates and other price concessions they receive from drug companies.

“As state legislators, we are responsible for the wise stewardship of taxpayers’ money,” said State Representative Norm Thurston of Utah, a Republican. “The state spends a lot of taxpayers’ money on prescription drugs, through Medicaid, corrections and jails, state employees, higher education employees and their dependents. We should be sure we’re getting the best deal.”

In response to a bill introduced by Mr. Thurston, the Utah Health Department is studying possible ways to import prescription drugs from Canada, and he is working with a Republican state senator on a bill to require the reporting of price information by drug companies.

California has adopted a law requiring drug companies to provide advance notice of price increases, together with a detailed statement of the reasons for the increases. In addition, insurers must file annual reports showing the percentage of premiums attributable to drug costs.

“Californians have a right to know why their medication costs are out of control, especially when pharmaceutical profits are soaring,” Gov. Jerry Brown said.

Drug companies have filed suit to block the California law, which they describe as “unprecedented and unconstitutional.”

The law “exports California’s policy choices” to the rest of the country and violates the First Amendment by compelling drug manufacturers to explain their price increases, said the lawsuit, filed by the Pharmaceutical Research and Manufacturers of America.

PhRMA, along with the Biotechnology Innovation Organization, also went to court to challenge a law signed by Gov. Brian Sandoval of Nevada, a Republican.

The Nevada law requires manufacturers of diabetes medicines, such as insulin, to report detailed information, including the production costs for each drug, the amount spent to market it, the profits earned on its sales and the amount of rebates paid to pharmacy benefit managers for sales of the drug in Nevada.

Drug companies dropped the lawsuit in June after Nevada agreed that certain information in the drug price reports could be kept confidential.

Reining in drug costs is a top priority for state officials who run Medicaid, the health program that serves more than 70 million low-income people.

Oklahoma will soon start paying for some prescription drugs based on how well they work. If a drug does not perform as promised, the manufacturer will refund the cost of the drug or another negotiated amount.

“If a drug claims to keep people out of the hospital and doesn’t, the manufacturer may be liable for the cost of the hospitalization,” said Nancy Nesser, the pharmacy director of the Oklahoma Medicaid program.

New York has imposed an annual cap on drug spending in its Medicaid program. If spending is projected to exceed the cap in any year, state officials must identify drugs responsible for the excess costs and try to negotiate additional rebates with drug manufacturers to keep spending under the cap. If a drug company balks, the state can restrict access to its drugs or impose controls on their use, based on advice from an independent panel that reviews the drugs’ costs and clinical benefits.

In the first year of the program, which ended in March, spending was on track to exceed the target, but state officials say they extracted $60 million in additional savings for the state through negotiations with companies that produce 30 particularly high-cost drugs.

In Ohio, Medicaid officials announced this past week that they had a new way to pay for prescription drugs. Pharmacy benefit managers will no longer be allowed to keep any of the payments they receive from drug manufacturers. The money must be passed on to Medicaid health plans and used for the benefit of Medicaid recipients, starting Jan. 1.

Ohio officials said they wanted to know whether the benefit managers had been overcharging the state, but were frustrated in trying to obtain drug pricing information.

“It’s shrouded in secrecy,” said Tom Betti, a spokesman for the Ohio Medicaid agency. “We intend to open up the black box.”

Maine adopted a law last month doing something that Congress has been trying, without success, to do for several years. The law requires manufacturers of brand-name drugs to make samples available to generic drug companies trying to develop inexpensive copies of those products. Generic drug developers need the samples to show that a low-cost generic copy is equivalent to the brand-name original.

The stated goal of the Maine law is to promote competition, so consumers do not have to pay “monopoly drug prices.”

A growing number of states have passed laws to ensure that pharmacists can inform customers of less expensive options. These laws ban “gag clauses,” which prevent pharmacists from telling consumers when they could save money on prescriptions by paying cash rather than using their health insurance.

Maryland tried a particularly bold approach.

After reports of huge increases in the prices of certain generic drugs, Maryland banned “price gouging,” defined as an unconscionable increase in the price of any “essential off-patent or generic drug.” A drug company that flouts the law could be fined $10,000 and be required to pay refunds to consumers.

The lobby for generic drug companies, the Association for Accessible Medicines, filed suit to block the law, and the United States Court of Appeals for the Fourth Circuit, in Richmond, Va., struck down the law, saying it interfered with interstate commerce in violation of the Constitution.

Under the law, it said, Maryland would regulate prices in transactions that occur wholly outside its borders — prices charged by drug makers to wholesalers — regardless of whether any pills were ever shipped to Maryland.

In a lengthy dissent, Judge James A. Wynn Jr. said that Maryland should be able to protect the health and welfare of its citizens. The court, he said, was accepting the drug companies’ view that they were “constitutionally entitled to impose conscience-shocking price increases” on consumers.

Aug13

CMS to Allow Medicare Advantage Plans to Restrict Access to Drugs Covered Under Part B

By Tom Matteson - blog

When a person has Part B of Medicare typically any medication that is administered at the doctor’s office, or in the hospital, are covered by Medicare. This also was the case for Medicare advantage plans, aka Part C of Medicare. However, per CMS this is about to change for Medicare advantage plans. The new rule will allow Medicare advantage plan providers to not cover certain medications administered by a provider(doctor/hospital). For Example: Drugs used in durable medical equipment, anti-rejection drugs for people who had Medicare when they got a transplant, and some chemotherapy agents, as well as drugs that are both supplied by and administered by a provider. Here is a nice piece by Casey Schwarz of the Medicare Rights Group filing us in on the changes.

CMS to Allow Medicare Advantage Plans to Restrict Access to Drugs Covered Under Part B

Casey SchwarzAugust 9, 2018

This week, the Centers for Medicare & Medicaid Services (CMS) announced that next year, Medicare Advantage (MA) Plans will be able to limit options for people who get Part B-covered drugs by using many of the same tools plans currently use in Part D. The Trump administration argues that this will enable plans to negotiate better prices for the “preferred” medications – those that the plan will cover as a first-line treatment. Other drugs will only be covered if a person tries the preferred medication first and it doesn’t work or causes them harm, also known as step therapy.

Until now, MA plans were not permitted to place this type of restriction on medications covered under Part B. Part B drugs include drugs used in durable medical equipment, anti-rejection drugs for people who had Medicare when they got a transplant, and some chemotherapy agents, as well as drugs that are both supplied by and administered by a provider. Plans that have both MA and Part D coverage will be permitted to create combined step therapy requirements where a preferred Part B-covered medication must be tried before a non-preferred Part D-covered treatment.

These restrictions, which are common in Part D plans, can make comparing plans more difficult. While CMS requires plans to announce to enrollees that they intend to use this flexibility in the Annual Notice of Change, they do not require plans to send personalized or targeted notices to people currently taking, or who have a diagnosis that might require, the affected medications. Medicare Rights is concerned that it will be especially challenging to compare plans where Part B step therapy is used unless there are updates and improvements to the Medicare Plan Finder tool.

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Blog

How Much Does Medicare Spend on Insulin?

Total Medicare Part D Spending on Insulin

Out-of-Pocket Spending on Insulin by Medicare Part D Enrollees

Illustrating the Potential Effect of Rebates on Total Insulin Spending

Implications

Changes to the Medicare Advantage Open Enrollment Period in 2019

What’s the new Medicare Advantage Open Enrollment Period?

Aetna

Avmed

Bay Care Plus

Care Plus

Aetna Coventry

Devoted

Florida Blue

Humana

Optimum

Freedom Health

Health Sun

Simply Healthcare

Ultimate Health Plans

WellCare

If you would like to find out more about how this change will impact you please give MIC a call. 1-855-830-6099, or email us at info@medicareic.net

Understanding how Social Security’s COLA is calculated

Here’s your 2019 Social Security COLA

Before you get too excited, remember this