1. Transparency Could Act As Disinfectant in Hospital Pricing
In 2022 the Biden administration levied its first fine against hospitals’ noncompliance over federal price transparency rules. (The Trump administration initiated the new rules; they took effect in 2021). Estimates of compliance vary: A September 2022 report found 65% of hospitals had partially complied with the rules, and an August 2022 report estimated full compliance at 16%. The current administration levied fines of $1.1 million in 2022, and stakeholders are looking to the Centers for Medicare and Medicaid Services to see if they ramp up enforcement in 2023. Researchers will continue to try to get a handle on the data — as well as new data from insurers — to understand what it tells policymakers and the public about hospital prices. Meanwhile, it’s imperative that policymakers acknowledge that some hospitals are demanding high prices because they have too much market power, which hurts employers and patients. Transparency helps, but alone it won’t bring down prices.
2. Better Health Care for 12+ Million People is Gaining Steam
At the top of the New Year, AV Health Care’s Complex Care team answered a request from a bipartisan group of senators. The senators wanted input from experts and stakeholders to better understand how to help improve the coverage and care experience for the more than 12 million people who qualify for both Medicare and Medicaid. Congressional interest is building toward the development of a federal solution to improve care for people enrolled in both programs, which were not designed to work together. AV outlined evidence-based policy ideas to integrate the two programs, thereby reducing the bifurcation between the programs and ensuring that the dual-eligible population receives adequate care.
3. The Fight to Lower Prescription Drug Prices Continues
Congress passed historic reforms with strong bipartisan support from voters that will lower the cost of prescriptions for millions of Americans. Evidence-based changes include (1) penalties imposed on drug companies that raise prices faster than the rate of inflation, (2) out-of-pocket caps at $2,000 for Medicare Part D beneficiaries, and (3) allowing Medicare to negotiate the price for some of the most expensive medications that have been on the market for years without competition. While this is a strong start, there are other pervasive aspects of the U.S. drug pricing system that Congress must urgently address. One such area: Lawmakers should look at the variety of opportunities to reform the U.S. patent system. At present, drug companies game the system, abusing loopholes that extend the patent lives of medications and block competitors from entering the market. These anti-competitive tactics extend drug company monopolies and force people to ration or skip prescriptions altogether. The New Year also brings a new opportunity for policymakers to examine supply chain issues that lead to higher prescription drug prices. The broken status quo can be set right with evidence-based policy reform.
4. Medicare Advantage’s Growing Role in Driving Medicare’s Fiscal Challenges
Nearly 50% of all Medicare beneficiaries are enrolled in Medicare Advantage, a federally funded program that enables beneficiaries to receive Medicare coverage through private managed care plans. Rapid growth in enrollment and the increased role Medicare Advantage plays in overall Medicare spending raises important questions about the value Medicare Advantage plans are providing to beneficiaries and taxpayers.
It is long overdue for Congress and the administration to improve program integrity and address a range of design flaws with the Medicare Advantage program that drive overpayments. Questions about the sustainability of Medicare and the impending threat to the Part A trust fund will likely also bring continued attention to Medicare Advantage. Possible reforms might include efforts to increase transparency and accountability for Medicare Advantage plans.
5. Advancing Payment Reforms to Achieve High Quality, Less Costly, and More Equitable Care.
In 2022, CMS increased its efforts to advance payment reforms that hold providers accountable for the total cost and quality of care. This included making major changes to Medicare’s largest and only permanent accountable care organization model, the Medicare Shared Savings Program. The program is a key platform by which more providers can be shifted into a payment model that gives them greater flexibility and stronger incentives to deliver efficient care that improves patients’ health. Recent changes to the program are expected to help contain health care costs, sharpen the focus on promoting health equity, and increase participation, including among safety net providers.