November 2020 Medicare drug pricing rules: What do you need to know?
The two final rules that were released on November 20 will have sweeping impacts to Medicare Part D and Medicare Part B drug pricing.
The COVID-19 pandemic has brought unprecedented stress and challenges to the healthcare industry. Based on the nature of the Medicare Advantage (MA) program and the predominantly elderly population it serves, Medicare Advantage organizations (MAOs) in particular face unique challenges. Beginning in early 2020, portions of the country implemented social distancing, with periods of closures or reduced capacity for many healthcare professional offices, and postponement of non-urgent procedures at hospitals. Due to greater susceptibility, seniors may continue social distancing for additional time and may be more hesitant to continue with normal societal interactions, including receiving routine healthcare services. MAOs need to be aware of the possible negative implications of these realities on their business and address any issues now while there is still time to impact financial performance in 2021.
The reduction of clinical services due to the COVID-19 pandemic has been widely reported.1 While this reduction may have a direct positive financial impact on health insurer expenses, MAOs may find themselves facing negative financial consequences as well, including:
The response to addressing the first threat is to ensure members receive care continuously in ways that allow diagnosis data to be accurately captured for risk adjustment. Two of the best ways to achieve this are appropriate use of telehealth services and member outreach. Appropriate focus in these areas may also help with the MLR, member outcomes, member satisfaction, and star rating issues.
The use of telehealth services has grown significantly since the start of the COVID-19 outbreak. To ensure effective use of telehealth services, MAOs need to consider the following:
The expanded flexibility for telehealth and other treatments and coding practices will need to be tracked as they may expire or change depending on the status of the public health emergency. The U.S. Department of Health and Human Services (HHS), CMS, and Congress are actively reviewing the way telehealth is delivered and the rules for how it is paid for3 and MAOs should remain up to date on emerging rules.
MAOs are accustomed to reaching out to members to ensure they all have annual wellness visits and treatment plans. MAOs should reevaluate their member outreach strategies in light of the current COVID-19 environment. MAOs should consider the following when determining which members to contact:
MAOs face various financial risks because of the COVID-19 pandemic. Deferred or avoided care in 2020 can cause lower risk scores and revenue in 2021, can result in MLR refunds in 2020, and can lead to gaps in care for vulnerable members. MAOs can work to mitigate these risks through the appropriate use of telehealth services and member outreach. MAOs should plan now while there is still time left in 2020 to react to the pandemic.
1Rogers, H., Mills, C., & Kramer, M. (April 2020). Estimating the impact of COVID-19 on healthcare costs in 2020: Key factors of the cost trajectory. Milliman white paper. Retrieved on August 3, 2020, from https://us.milliman.com/en/insight/Estimating-the-impact-of-COVID19-on-healthcare-costs-in-2020.
2CMS (April 10, 2020). Applicability of Diagnoses From Telehealth Services for Risk Adjustment. Retrieved on July 22, 2020, from https://www.cms.gov/files/document/applicability-diagnoses-telehealth-services-risk-adjustment-4102020.pdf.
3Mills-Gregg, D. (July 9, 2020). HHS secretary says telehealth here to stay. Inside Health Policy. Retrieved on July 22, 2020, from https://insidehealthpolicy.com/daily-news/hhs-secretary-says-telehealth-here-stay?s=cms (subscription required).