Consumer Affordability – Page 2 – The National Academy for State Health Policy

Independent Analysis: Estimating the Impact of Reference-Based Hospital Pricing on the Montana State Employee Plan

April 5, 2021/in Policy Montana Consumer Affordability, Cost, Payment, and Delivery Reform, Health System Costs, Hospital/Health System Oversight, Making the Case for Action, State Employee Health Plans, Value-Based Purchasing /by NASHP Staff

Hospital Transparency: State Efforts Reveal More Comprehensive Financial Data than Current Federal Requirements

March 29, 2021/in Health System Costs Blogs, Featured News Home Consumer Affordability, Cost, Payment, and Delivery Reform, Health System Costs, Hospital/Health System Oversight, Making the Case for Action, Quality and Measurement, Value-Based Purchasing /by Amanda Attiya and Maureen Hensley-Quinn

Federal efforts to increase hospital price transparency are falling short as hospitals fail to fully comply with requirements. However, states with transparency laws that give them access to comprehensive hospital financial data are using the pricing information to more fully analyze hospitals’ fiscal health and inform states’ cost containment efforts.

In August 2018, the Centers for Medicare & Medicaid Services (CMS) issued a rule based on then-President Trump’s executive order that required hospitals to publish their chargemaster pricing online. CMS released an additional rule in 2019, which went into effect at the beginning of this year, expanding the types of charges a hospital is required to disclose to include gross charges, discounted cash prices, and negotiated rates, all of which need to be disclosed through a comprehensive, machine-readable file and a consumer-friendly shoppable services file.

However, not all hospitals are heeding these federal directives, and the threat of the $300-a-day fine is proving to be an insubstantial motivator to larger health systems. An investigation shows that New York City’s five largest systems are only partially – if not at all – complying with the federal requirement. A recent study of 1,000 hospitals across 27 states found that 30 percent of hospitals were entirely noncompliant, and additional hospitals only complied with one form of required disclosures. To date, the Biden Administration has not taken any public position on the executive order nor the rules.

A hospital chargemaster is the standard list prices for hospital services. Chargemaster rates are essentially the health care market equivalent of Manufacturer’s Suggested Retail Price (MSRP) in the car buying market.

• NASHP’s model law and reporting template offer a more robust health system financial picture than the current federal price transparency effort.

• NASHP also tracks state legislative efforts to increase hospital transparency and contain costs.

For state agencies seeking to better understand rising health care costs, the price of shoppable services is a relatively small piece of the hospital financial puzzle. The federal regulation falls short of requiring other key metrics and data points that states need for oversight and/or for informed policymaking, such as bad debt, net gains/losses, profit margins, charity care, and more.

Additionally, neither the federal executive order nor subsequent regulations outline any sort of standardization for reporting the required data. Having a consistent standard for accounting documents – such as balance sheets, income statements, and statements of cash reserves – would provide comparability and clarity that states would be able to utilize in a multitude of ways. So even if hospitals comply with the current federal requirements, state officials will still lack access to the information they need to fully understand hospital financials and effectively combat rapidly rising health system costs in their states.

Building on a number of state hospital transparency efforts to date, the National Academy for State Health Policy (NASHP) has developed a reporting template and model legislation states can use to require health systems to provide comprehensive, standardized financial data that can inform policymaking and help state agencies better understand what is driving rising hospital costs. Connecticut and Oregon have been collecting hospital financial data for several years –their experiences informed the development of NASHP’s model law and reporting template, and they may be useful to other states.

The Connecticut Office of Health Strategy collects data to evaluate increased hospital expenditures against their revenue to determine if such expenditures are necessary and warranted. Connecticut also uses this data to help answer key questions about hospitals’ ability to continue to meet their debt obligations, pay their employees and vendors, and continue to provide quality care to patients. The standardized data Connecticut collects also helps the state evaluate the changing health care market, which includes health system mergers and acquisitions, increased capital costs, and the differences between increased expenses and revenues.

Assessing hospital financials helps states develop a range of cost containment strategies, from payment and care delivery reforms to policies designed to restrict cost growth. For example, hospital financial reporting serves as a critical companion to Connecticut’s cost-growth benchmark program by helping to contextualize claims reporting data when evaluating system costs over time. When paired with quality measures, all-payer claims database information, facilities fee reporting, discharge data, and cost benchmark data, hospital financial transparency has given Connecticut a fuller, more accurate picture of the health market’s performance statewide. Financial data on its own may not necessarily reveal price variation over time, but when tied with other data, such as reporting on payer mix (public vs. private payers) differences, states can better evaluate their hospital market’s performance.

With hospital costs making up a significant portion of health care spending, states have been interested in tracking the impact of hospitals’ payer mixes and the proportion of hospital costs on overall premium dollar changes over time, especially when compared to federal data. The Oregon Health Authority has been collecting hospital financial data for years and in 2014 began publishing quarterly reports. Oregon documented a rise in state health spending at an average of 6.5 percent per person per year from 2013 to 2017, compared to a 4.5 percent annual increase at the national level. This discrepancy between federal and state-level health cost annual increases encouraged Oregon to develop cost-containment strategies. Additionally, while hospital profit margins were about 7.3 percent statewide in 2019, some Oregon hospitals reported losses that year, which were quickly identified in the state’s standardized financial reporting format.

Oregon has also been able to utilize its financial data to assess the impact of the COVID-19 pandemic on its statewide health systems. As have many states, Oregon observed a decrease in hospital utilization in the second quarter of 2020, caused by the suspension of elective procedures and stay-at-home orders. This resulted in a steep reduction of about 80 percent in net patient revenue during April. Combined with data collected on hospital financial reserves, Oregon was able to prepare for the potential of rapid consolidation – which frequently leads to increased prices impacting consumers and boosting premiums.

While it’s unlikely that hospital transparency efforts on their own will produce lower health care costs, states may want to consider the value of this approach in collecting comprehensive health system data – particularly as care utilization has changed over the past year and its effect on the system remains unknown. NASHP’s model law and reporting template, informed by state experiences, offer a more robust health system financial picture than the current federal price transparency effort.

Community Benefit Twitter Chat – 3 p.m. (ET) Wednesday, April 7, 2021

March 22, 2021/in Policy Blogs Community Benefit, Consumer Affordability, Health System Costs, Hospital/Health System Oversight, Making the Case for Action, Population Health /by NASHP Staff

The National Academy for State Health Policy (NASHP) and Community Benefit Insight are hosting a TwitterChat at 3 p.m. (ET) Wednesday, April 7, 2021, as a part of National Public Health Week. It will discuss community engagement, how hospital community benefit improvement activities can address health disparities, and how this has changed as a result of the COVID-19 pandemic. Make sure to follow @NASHPhealth on Twitter and use #CommunityBenefitChat.

How to participate: 

Follow @NASHPhealth on Twitter.
Join us at 3 p.m. (ET) Wednesday, April 7, 2021, and follow the conversation using #CommunityBenefitChat
Share your thoughts and ideas on policies and support resources. 
Use links to your website, programs, initiatives, and partners in your tweets to promote the good work you, your organization, and/or state are doing!
Include #CommunityBenefitChat in all of your tweets so chat participants can easily follow you and others during this event.

How it works: 

Each question will be numbered Q1, Q2, Q3, etc. 
Start your responses with A1, A2, A3 etc. to correspond with the question. 
You only have 280 characters per tweet but you’re not limited to only one tweet per question. Use A1a, A1b, A1c, etc. to indicate either a multi-part answer or multiple responses to a given question.

The questions:

Q1: How can nonprofit hospitals help address community needs during the COVID-19 pandemic and recovery?

Q2. How can community benefit programs address social determinants of health and reduce health disparities worsened by the COVID-19 pandemic?

Q3. How can community benefit programs make public health services more accessible to vulnerable populations?

Q4. What steps can non-profit hospitals take to effectively engage community members in their community health needs assessments?

Q5. How is your state or community working to ensure meaningful community benefit spending?

Q6. What steps can states take to ensure community benefit spending meets identified community needs?

This chat is an excellent opportunity to highlight some of your exciting initiatives, innovations, and resources!  

The 2021 American Rescue Plan Act’s Major Health Care Provisions

March 15, 2021/in COVID-19 Relief and Recovery Resource Center Blogs, Featured News Home Consumer Affordability, COVID-19, Eligibility and Enrollment, Equity, Health Coverage and Access, Health Equity, Health System Costs, Housing and Health, Medicaid Expansion, Population Health, Relief and Recovery, Social Determinants of Health, State Insurance Marketplaces, Workforce Capacity Recovery and Relief /by Christina Cousart

Will Laws to Lower Drug Prices Harm Innovation? The Evidence Says No.

March 8, 2021/in Prescription Drug Pricing Blogs, Featured News Home Administrative Actions, Consumer Affordability, Health System Costs, Legal Resources, Making the Case for Action, Model Legislation, Newly-Enacted Laws, Prescription Drug Pricing, State Rx Legislative Action /by Sarah Lanford

Drug makers claim high prices are necessary to support new drug development and innovation, but research shows that public investment in drug research and development combined with large industry profits leaves manufacturers room to lower prices while continuing to innovate.

Drug manufacturers have brought new vaccines to market in record speed to stop the spread of COVID-19. That notable achievement was made possible by massive financial investments from the public. More than $19 billion in government funding has been invested in the research, development, manufacturing, and distribution of COVID-19 vaccines. In total, the United States has guaranteed purchase of 900 million doses for a population of approximately 330 million and assumed financial risk so manufacturers don’t have to.

Even companies that did not accept federal funding for research and development have benefited from previous taxpayer-funded research. The Pfizer vaccine contains a publicly-funded, government-developed spike protein technology that rapidly accelerated its development process.

Taxpayer-funded research for each of the 356 drugs approved by the FDA in the last decade totals $230 billion. Despite taxpayers’ investments in drug development, manufacturers face few restrictions on what they can charge for these drugs in the United States.

Public funding is not unique to vaccines though. The drug industry relies heavily on public funding for all forms of drug development. Taxpayer-funded research for each of the 356 drugs approved by the US Food and Drug Administration in the last decade totals $230 billion. Despite this level of public investment in drug development, manufacturers face few restrictions on what they can charge for their drugs in the United States despite taxpayers’ investments.

As a result, drug prices are on average 2.5-times higher in the United States than comparable countries, even though those countries also contribute considerably to research and development (R&D) costs. High drug prices in the US market have generated substantial profits for the pharmaceutical industry. Between 2008 and 2018, the profitability of pharmaceutical companies was almost double that of other large, public companies.

Despite the significant amount of taxpayer funding, pharmaceutical industry officials argue that high drug prices reflect the cost of R&D and the risk associated with developing a new drug. However, high US drug prices exceed what is necessary to fund R&D. For example, drug manufacturers Amgen, Biogen, Pfizer, and Teva generated more than double their global R&D budgets from excessive US prices, and three companies covered or nearly covered all of their research spending through high US prices on their top-selling products alone:

AbbVie’s Humira (an immunosuppressant);
Biogen’s Tecfidera (treats multiple sclerosis); and
Teva’s Copaxone (an immunomodulator that treats multiple sclerosis).

Two of these drugs – Humira and Tecfidera – appear on the Institute for Clinical and Economic Review’s 2020 list of drugs that have prices increases unsupported by new clinical evidence.

With little action on drug prices from the federal government, states are considering new ways to control drug spending, and lawmakers have filed more than 200 bills this session, including bills with the potential for real impact on prices. Five states have introduced the National Academy for State Health Policy’s (NASHP) model legislation to establish international reference rates to bring prices in line with Canadian rates, which could result in savings ranging from 60 to 85 percent. Three states have introduced NASHP’s model legislation that fines pharmaceutical manufacturers whose drug price increases are unsupported by new clinical evidence – including Humira and Tecfidera cited above – based on the Institute for Clinical and Economic Review’s research.

As states ramp up their efforts to address excessive drug prices, the industry continues to argue that lower prices would harm innovation. Trail-blazing states can be reassured, however, that there is room for manufacturers to lower prices while still maintaining their profit margins and preserving their capacity for innovation.

NASHP Issues an RFP for Online Database Developer – Due March 30, 2021

March 1, 2021/in Policy Featured News Home, NASHP News Consumer Affordability, Health System Costs, Hospital/Health System Oversight, Making the Case for Action /by NASHP Staff

The National Academy for State Health Policy (NASHP), a non-profit, nonpartisan forum of policymakers, is issuing this request for proposal (RFP) to identify future contractor(s) to create an online searchable database that shares data from a tool we developed. Proposals are due by 5 p.m. (ET) Tuesday, March 30, 2021.

Background

Through its Center for State Health Care System Costs (the Center), NASHP has developed a hospital cost tool to analyze a hospital’s costs versus its prices. The tool is an Excel workbook that requires manual data entry from a hospital’s annual Medicare Cost Report (MCR) to identify its costs for providing hospital services, the largest portion of health care spending. Formulas are embedded in the tool to calculate several hospital financial metrics. Entering the data can be very time consuming and prone to data-input errors when used by individuals who are unfamiliar with the MCR.

In September 2020, NASHP began working with Vivian Ho, director of the Center for Health and Biosciences at the Baker Institute at Rice University, to auto-populate the MCR data from the national Healthcare Cost Report Information System (HCRIS) using the tool’s formulas. Ho and her team have successfully used Strata software to link NASHP’s tool with HCRIS, creating a data set of about 40 key points from the tool’s calculations. The data set resides in an Excel format, with 10 tabs (each representing a year of data from 2011 – 2020) each containing the 40 data points for each of the approximately 6,500 hospitals nationwide that submit an MCR. The data points include:

Net income
Profit margin
Reserves
Cost-to-charge ratio
Uncompensated care costs
Payer mix and profit/loss from Medicare, Medicaid, and commercial payers
Break-even financial points
Comparison to Rand 3.0, and
Hospital pricing as a multiple of Medicare

NASHP has used the data set to prepare reports, Microsoft PowerPoint presentations, and deeper analyses for states and employer health plans that allow for benchmarking hospitals by bed size, state, national, and other measures. The work is intensive and requires a level of data expertise that not all state policymakers either have access to or the resources for. As a result, to date only a few people are working with the data. However, NASHP intends to make analysis from this data available to all state policymakers who want it.

Next Steps: Share an Online National Database of Hospital Costs

NASHP is interested in sharing (and regularly updating) the data set it created with Rice University on NASHP’s website to make it is accessible to states. To ensure the online database is useful to states and other health care purchasers, it should be searchable and include interactive features that allow users to create customized comparison charts, etc. Further, using the most recent data available (by a certain month, to be determined, in 2021), NASHP wants to create standardized reports for each state and Washington, DC that provide information through charts and graphs on hospital cost trends in their states that include national benchmarks.

While NASHP will continue to work with Rice University to update the data set using its evolving tool and the strata code already developed, the online data set needs to easily allow such updates. NASHP is seeking to contract with one or more entities that can advise NASHP on the best way to present this large data set online and make it as useful as possible to its core audience of state policymakers. NASHP is seeking expertise in organizing and presenting complex data sets online that can be manipulated by users with differing needs without making changes to the original data set. Please consider that NASHP wants flexibility built into the online data set to allow for quarterly updates, which is the frequency that the HCRIS data base is updated. Also, over time NASHP will likely expand the tool with additional data points as states need more information and/or as the MCR evolves. It also anticipates adding information from future resources, e.g., Rand 4.0. NASHP is also seeking help to develop and create easy-to-understand state reports with graphs, charts, and other visual representations of the data to offer a snapshot of hospital costs for each state. NASHP recognizes that the skills needed for this project may require contracting with two different entities – one with expertise in creating large online data sets and another with the graphics knowledge to create informative, visual reports. We are open to contracting with one or multiple parties to complete the work.

Anticipated Deliverables

To achieve these goals, NASHP is seeking proposals from entities with expertise in creating online searchable online databases that can be routinely updated and/or entities with expertise in developing graphics from complex data. It is NASHP’s intention to begin this work in the late spring or early summer of 2021 so that the online database and individual reports will be available early in 2022 (or before, if possible.) NASHP welcomes interested entities to submit proposals related to the following anticipated deliverables and questions noted below.

Develop an online, searchable database from the data set that NASHP now has from the HCRIS database using the strata code developed in partnership with Rice University. It must include:

Accessible display of large data set that includes approximately 40 data points for about 6,500 hospitals over a 10-year-plus period of time (2011 and beyond);
A search tool that allows users to query the database to access specific data points and to customize analytic reports based on their needs, which may include:
- Access to a single hospital’s cost information across all 40 data points throughout multiple years to understand a specific hospital’s cost trends;
- Access to multiple hospitals in a specific location (city, state, multiple state region, and/or national) to compare single or multiple cost data points; and
- A search that allows users to have options for viewing the data.

Provide an overview of the data set that includes:
- A brief, written introduction of the resource that includes examples of how it can be used;
- A clear, concise instructions for using the resource; and
- A brief recorded training for users to view.

Design informative charts, graphs, and other visuals to share critical data points and trends from the NASHP database to be used in state reports and presentations.

Create standard reports using the data set – both national reports and individualized state reports –with graphics. NASHP will collaborate on the commonly requested information that should be included in the reports.

Request for Proposal

NASHP is seeking proposals from potential contractors with expertise, capabilities, and availability to do the work of presenting our data set online. In reviewing responses to this RFP, NASHP hopes to understand respondents’ experience with large data sets, their ability to create accessible graphics, and learn about their successful work with states. NASHP is also looking for information that will assist it in balancing respondents’ relevant experience with proposed budgets and timelines to complete the type of work we contemplate undertaking.

Please note if your proposal is responding to both areas or work/sets of deliverables (creating the online database and developing graphic reports) or if it is just focused on one of the areas of work and identify which one. Proposals responding to this this RFP will be accepted through 5 p.m. (ET), Tuesday, March 30, 2021.

All proposals should include the following:

Organization and/or individual name and location(s);
Description of the organization/company and explanation of the type of services provided, please note your audiences/recipients of your services;
Please describe the experience you/your organization has with the work NASHP is seeking to do, including:

Creating searchable, online databases that can be used by individuals with various backgrounds, including those with limited statistical experience (up to two pages), and
Designing graphic-based reports that share critical information in a digestible manner (up to two pages)

Describe your/your organization’s approach to the work by briefly explaining how either or both sets of the deliverables will be accomplished, as well as the proposed communication plan with NASHP. Please note the strengths and weaknesses of your approach and how you will assure quality work. (Up to three pages per set of deliverables – the online database and/or the graphical reports).
Describe the people who would work on this project and a summary of their experience.
Please provide the timeline you/your organization would need to accomplish the work and finish all deliverables and note how soon you/your organization would be available to do the work (up to two pages).
Please provide the proposed detailed budget for the work and note if you/your organization would be the sole contractor or if there would be a subcontractor used as well.
Please disclose any possible conflicts of interest.
Please provide disclosure of complaints, current or pending actions, legal or otherwise.

*Examples of similar work can be included as an appendix to the proposal.

Proposals will be evaluated based on the respondent’s demonstrated experience with this type of work, the organization’s capacity to take on this assignment, the proposed workplan, and proposed cost. Note that the final award of this contract is contingent upon NASHP securing adequate funding for this initiative.

Point of Contact

Respondents can send questions and responses to this RFP to Maureen Hensley-Quinn at mhq@oldsite.nashp.org.

Q&As about NASHP’s RFP

Will this new online database will be a stand-alone, cloud-based web solution?

The database will most likely need to be housed on a stand-alone, cloud-based solution separate from the NASHP website. However, the user-friendly interface should align with the look and feel of our website.

How many general users will be accessing the system – just searching the database? How many will be administrators – with permission to update/edit the data?

We are seeking a contractor that can take our database content and create a user-friendly interface so that the public can access the information as needed. We expect a small number of NASHP staff will need permissions to update and edit the data on a fairly regular base, e.g., quarterly or annually.

Will general users need to log in to use the database or will it be open for anyone to use?

It will be open.

Will the reports need to be downloaded? If so, what format(s) are needed (ex. PDF, JPEG, etc.)? Will the data for each report also need to be downloaded? If so, what format(s) (ex. CSV, Excel, etc.)?

NASHP is seeking one or two contractors to develop:

1) The user-friendly interface for the large excel database we have created so that the public can access the information from that database. It would be ideal to have an option to download the data accessed from this online database in excel format.

2) Point in time individual state reports with charts and graphs to highlight key data elements for that state.

NASHP is open for contracting with one organization to do both parts of this work, but we are also open to separating the work into two different components and contracting with two different entities.

Is there an existing developer that you work with who will also be bidding?

We know the deadline to submit our proposal is March 30, 2021. After that, when do you anticipate making a decision? When do you estimate that work will begin? When do you want the project to be completed/go live?

NASHP will begin considering all proposals after the submission deadline and will notify the successful bidder as soon as possible, likely by the end of April/early May. As noted in the RFP, we hope to launch the work in “late spring or early summer of 2021 so that the online database and individual reports will be available early in 2022 (or before, if possible.)”

What type of hosting/on-going maintenance will you be needing post-launch?

Ideally, NASHP will host the online interface and database as it does our website, but we are open to advice and input from the successful bidder on the best way to do so. We don’t expect ongoing maintenance will be needed, but we are open to advice and feedback from bidders on that as well.

What is the budget for the initial project development? Budget for long-term support?

NASHP has not specified an established dollar-value range for this contract and will consider price as well as a respondent’s ability to complete quality work within our preferred timeline of spring 2021 until winter 2021.

Would the contractor need to ingest the data NASHP and Rice University has prepared (the Excel tool data), or would the contractor ingest that data directly from HCRIS and merge with additional data produced by Rice University?

The contractor will use the large excel file that NASHP put together with Rice University as the calculations from HCRIS database have already been made.

Would the contractor need to interface or make use of the NASHP/Rice Stata code or would the contractor be building a separate system not linked to this existing code?

It is our expectation that the contractor will be creating an online, user-friendly interface so that users can easily access the critical cost data points within NASHP’s existing large, excel file.

Would we expect to make all deliverables accessible to the public or provide differential access to certain users?

The goal is to make all deliverables accessible to the public.

Are there any constraints on the platform and programming language used by the contractor? For example, are there any constraints on whether the contractor can use cloud computing to work with and host the data and reports?

Ideally this online database will be housed on NASHP’s website. However, we are open to input and feedback about how best to make that happen – whether it live our website’s server or be stored via a cloud-based solution.

The RFP states that “Also, over time NASHP will likely expand the tool with additional datapoints as states need more information and/or as the MCR evolves. It also anticipates adding information from future resources, e.g., Rand4.0.” How does NASHP plan to implement future changes after go-live. Although most tools would provide flexibility to update the input data and refresh existing reports, some changes may require an operations and maintenance support. Should we assume additional support after go-live date or would the continued updates of the evolving Rice University’s tool be scoped under a different maintenance and support contract if needed?

At this point, NASHP seeking a contractor that use flexible tools that our staff would be able to maintain. However, if the database needs significant updates, we would seek assistance through a different contract.

Adding Teeth to Transparency: States Take Stronger Steps Against Drug Price Hikes

March 1, 2021/in Prescription Drug Pricing Hawaii, Maine, Washington Blogs, Featured News Home Administrative Actions, Consumer Affordability, Health System Costs, Legislative Tracker, Model Legislation, Prescription Drug Pricing, State Rx Legislative Action /by Jennifer Reck

Three states have proposed legislation, based on National Academy for State Health Policy’s model law, that penalizes drug manufacturers for hiking prescription drug prices without new clinical evidence to justify the increase.

More than a dozen states have enacted drug price transparency legislation to better understand the extent of and drivers behind prescription drug price hikes. Now two of those states, Washington and Maine,* along with Hawaii, have proposed legislation to take the next step: penalizing manufacturers for hiking prices on their products without new clinical evidence to support a price increase.

Learn more about NASHP’s model act penalizing “unsupported” prescription drug price increases here.

The legislation is based on a NASHP model bill that is designed to be easy to administer and a low-cost approach. The model bill enables states to utilize an annual report published by the Institute for Economic and Clinical Review (ICER) that identifies a small number of expensive drugs with large unsupported price increases. ICER’s January 2021 report, for example, revealed that US spending on unsupported price increases for just seven drugs led to increased spending of $1.2 billion in 2019.

The model bill penalizes manufacturers for 80 percent of their drug sales from unsupported price increases in a state – representing millions in potential revenue that can be used to help reduce prescription drug costs for consumers. NASHP can work with states to estimate potential revenue from this legislation.

ICER is an independent organization that conducts methodologically rigorous research into the clinical and economic value of prescription drugs. A growing number of states is looking to ICER’s annual analysis of unsupported price increases because it is thorough and transparent. The report reflects research that would be difficult for states to replicate on their own without a large investment of time and resources.

ICER actively engages drug manufacturers in its unsupported price increase report by giving them opportunities to correct the data ICER uses in its analysis and to present alternative explanations that might justify the price increases under investigation. In some cases, engagement with manufacturers has led to removal of a drug that had been identified as having an unsupported price increase from ICER’s list. While some stakeholders have expressed concern with ICER’s use of quality adjusted life years (QALYs) in its separate analyses determining the value of specific drugs, ICER’s unsupported price increase report does not use or reference QALYs in any form.

ICER’s January 2021 report on unsupported price increases identified well-known, frequently used, and high-cost drugs, such as Humira, which is used to treat autoimmune diseases. Another drug, Enbrel, also used to treat autoimmune diseases, was reviewed by ICER after being nominated by states with drug price transparency laws. States tracking drug price increases knew that Enbrel was a problem – and ICER’s exhaustive review of the clinical evidence on Enbrel confirmed that Enbrel’s price increase was not supported by new clinical evidence. Enbrel’s unsupported price increase contributed to more than $400 million in increased spending across the United States last year.

While drug price transparency laws help states detect and report on price increases, NASHP’s Unsupported Price Increase model bill enables states go further to more aggressively discourage price increases and to recoup spending lost to manufacturers that raise their prices – not because their products are in any way improved – but because they can.

NASHP has developed a template for determining potential revenue from penalizing manufacturers for unsupported price increases and can work with states that want to estimate potential total revenue from implementing unsupported drug price penalties in their states. Please contact Jennifer Reck for more information.

*Maine lawmakers have pre-filed this bill, meaning it has been proposed but has not yet been published as a legislative document by the Maine’s Revisor of Statutes.

American Rescue Plan Could Significantly Enhance Health Insurance Coverage

March 1, 2021/in Policy Blogs, Featured News Home CHIP, Consumer Affordability, Eligibility and Enrollment, Health Coverage and Access, Health System Costs, Relief and Recovery, State Insurance Marketplaces /by Christina Cousart and Anita Cardwell

Last week, the House passed the American Rescue Plan Act of 2021 (ARPA). The $1.9 trillion relief package’s current proposals would change health coverage programs, including Medicaid, health insurance marketplaces, and continuation coverage offered through the Consolidated Omnibus Budget Reconciliation Act (COBRA).

If enacted, the changes could have significant ramifications for states and individuals served by these programs. States should be prepared to act quickly to implement and/or respond to the changes, some of which will be effective immediately upon passage.

ARPA is now before the Senate, which may make modifications and will review its provisions to determine if they meet budget reconciliation rules. Both House and Senate leadership have expressed strong interest in quickly passing the legislation, with passage possible by mid-March.

The following highlights key proposed Medicaid and Children’s Health Insurance Program (CHIP) changes as well as provisions designed to help increase access to affordable care for individuals who have lost employer-sponsored insurance.

Key Medicaid and CHIP Provisions

Coverage of COVID-19 vaccines and treatment under Medicaid and CHIP:

Requires Medicaid and CHIP coverage of COVID-19 vaccines and treatment without cost sharing for all eligible enrollees;
Increases federal medical assistance percentage (FMAP) to 100 percent for vaccine administration for one year after the end of the public health emergency (PHE); and
Provides an option for states to provide coverage of COVID-19 vaccines and treatment without cost sharing for uninsured individuals at 100 percent FMAP.

Option to provide additional Medicaid and CHIP postpartum coverage:

Allows states to extend Medicaid or CHIP coverage for 12 months after childbirth. (This option would be available for seven years).

Enhanced FMAP for mobile crisis intervention services:

State option would provide Medicaid coverage for qualifying community-based mobile crisis intervention services.
Provides 85 percent FMAP for these services. (This option would be available for five years.)

Temporary FMAP increase to incentivize Medicaid expansion:

Provides 5 percentage point FMAP increase to states’ base FMAP rates for eight calendar quarters to states that opt to implement the Affordable Care Act’s Medicaid expansion after enactment of the American Rescue Plan. (This increase is in addition to the temporary 6.2 percentage-point FMAP increase available during the PHE provided by the Families First Coronavirus Response Act)
FMAP increase applies to all Medicaid eligibility groups except the expansion group. Newly expanding states would receive the current 90 percent FMAP provided for the expansion group.

Temporary extension of 100 percent FMAP for care provided at Urban Indian Organizations and Native Hawaiian Health Care Systems:

Provides 100 percent FMAP for eight calendar quarters for services provided at Urban Indian Health Programs or the Native Hawaiian Health Care System to Medicaid enrollees.

Sunset of Medicaid Drug Rebate Limit:

Beginning in calendar year 2023, this provision would eliminate the cap on Medicaid drug rebates.

Temporary enhanced FMAP for home- and community-based services:

Provides 7.35 percentage-point FMAP increase for one year to help states implement improvements to Medicaid home- and community-based services.

Creation of state strike teams for nursing facilities:

Provides $250 million to the US Department of Health and Human Services for states to create strike teams to help nursing facilities manage COVID-19 outbreaks.

Key Private Market Coverage Provisions

Support for continuation coverage through COBRA:

Provides federal funding so that individuals would only have to pay 15 percent of their premiums toward COBRA coverage. COBRA allows individuals who have experienced job loss to continue enrollment in their employer-sponsored health insurance plan for a period of up to 36 months. Normally, individuals pay 100 percent of COBRA premiums. Federal funding will be available through Sept. 30, 2021.

Requires employers to provide updated information to qualifying employees about the program and be prepared to expedite review for any employees who are denied premium assistance.

Enhanced tax credits to purchase coverage through health insurance marketplaces:

Provides a two-year enhancement to premium tax credits (PTCs) available to eligible individuals who qualify to purchase coverage through health insurance marketplaces. The enhancements both increase the amount of PTCs available at all income levels and eliminate the 400 percent earnings (of federal poverty level – FPL) limit to qualify for PTCs.
Funding would cap monthly premiums at no more than 8.5 percent of an individual’s income.
The PTC enhancements would be available for the 2021 and 2022 plan years. Individuals who are currently enrolled in marketplace coverage would be eligible for rebates to cover expenditures already made toward 2021 coverage.
Disregards income above 133 percent of FPL for purposes of calculating eligibility for PTCs for any individual who receives unemployment compensation in 2021.
For more information about these proposals, read the February, 2021 National Academy for State Health Policy (NASHP) blog, Congressional Proposals Could Improve Coverage Affordability and Access for Millions.

NASHP will follow the American Rescue Plan Act as it moves through Congress and will continue to share information on provisions that are critical to states.

2021 State of the States: Amid the Pandemic, Governors Tackle Health, Social, and Economic Issues

March 1, 2021/in Policy Charts, Maps Chronic Disease Prevention and Management, Consumer Affordability, COVID-19, Eligibility and Enrollment, Equity, Health Coverage and Access, Health Equity, Health System Costs, Housing and Health, Immunization, Maternal, Child, and Adolescent Health, Population Health, Social Determinants of Health /by NASHP Staff

Congressional Proposals Could Improve Coverage Affordability and Access for Millions

February 12, 2021/in Policy Blogs, Featured News Home Consumer Affordability, Eligibility and Enrollment, Health Coverage and Access, Health System Costs, State Insurance Marketplaces /by Christina Cousart

Last week, Congress released a series of legislative proposals designed to respond to COVID-19’s ongoing public health and economic crises. The proposed legislation, expected to be voted on in early March, is a direct response to the Biden Administration’s American Rescue Plan and includes several provisions that could significantly impact eligibility and coverage sold through the health insurance marketplaces.

Tax Credit Increases for Purchasing Coverage through Marketplaces

The legislative proposals would institute a significant increase in tax credits available to consumers to help them pay for coverage sold through the health insurance marketplaces. Currently, premium tax credits (PTCs) are available to individuals and households who earn between 100 to 400 percent of the federal poverty level (FPL) and who purchase coverage through the health insurance marketplaces. (During 2021, individuals earning $12,880 to $51,520 or a family of four earning $26,500 to $106,000 a year would qualify for tax credits.)

Tax credits are allocated on a sliding, income-based scale so individuals and families are only required to pay 2 to 9.5 percent of their income for insurance (based on the cost of a second-lowest cost silver-level health plan available to that household).

The proposed changes increase the amount of PTCs available by both reducing the required contribution percentages to zero to 8.5 percent and by eliminating the 400 percent of FPL income cap, so that no household would be required to pay more than 8.5 percent of its income for coverage sold through a marketplace.

A recent report estimated similar changes could increase marketplace enrollment by more than 4 million individuals. The change would be retroactively applied, meaning individuals would be eligible for the additional subsidy amount retroactive to Jan. 1, 2021. These changes would be temporary, only applying to tax years 2021 and 2022. In addition, the proposal would create a new eligibility category whereby any individual receiving unemployment benefits in 2021 would be eligible for the maximum amount of PTC available. Specifically, the change would require that any income above 133 percernt of FPL be disregarded for the purposes of PTC calculation.

In a recent letter to Congressional leaders, 19 state-based marketplace (SBM) leaders agreed that policies that enhanced subsidies and removed the income cap would be some of the most effective tools to improve coverage affordability and access. However, significant work to make these changes will be required. Marketplaces must rapidly update eligibility and enrollment systems, modify consumer shopping tools such as cost calculators and websites, and conduct the education and outreach necessary to make consumers aware of the changes. The proposed legislation includes $20 million in grants to the SBMs to make the necessary IT changes.

Protections for Individuals who Misestimated 2020 Income

The Congressional proposals include a provision that would protect consumers from tax penalties related to receipt of an inaccurate amount of PTCs. PTCs are calculated based on an estimate of an individual’s expected income for the upcoming tax year. Typically, consumers who underestimate their incomes and receive more PTCs than they should have are subject to a financial penalty of up to $2,700 for incomes up to 400 percent of FPL. There is no penalty cap for individuals earning above 400 percent FPL.

The proposal recognizes the unprecedented unpredictability of many individuals’ income in during the pandemic and waives penalties for the 2020 tax year. Concerns about excessive penalties and income miscalculations in 2020 were raised by SBM leaders in a letter sent to the Treasury Department and Internal Revenue Services (read their letter here).

Congressional committees are currently finalizing legislative language and could vote as soon as early March. If passed, the federal government and the SBMs will need to work at a rapid pace to make the policy and system changes necessary for implementation. SBM officials are also making plans to adopt changes that will enable access to more affordable coverage for the populations they serve.

The National Academy for State Health Policy will continue to monitor and report on the proposed legislation as it moves through Congress and the SBMs as they begin the groundwork necessary to implement the proposals.