Commercial Sector Prices
Surprise billing from out-of-network providers can devastate a person’s finances (two-thirds of all bankruptcies are tied to medical expenses), which is why Congress took action to protect patients from predatory surprise medical bills by passing the No Surprises Act in December 2020. Whether the law fully realizes its promise of lowering costs and protecting patients, however, is dependent on the finer details of implementation that government regulators spent this year ironing out.
AV’s commercial sector prices team and grantee — including Families USA, the American Heart Association, the Purchaser Business Group on Health, Georgetown CHIR, and the USC-Brookings Schaeffer Initiative for Health Policy — worked throughout 2021 to ensure the Biden Administration’s approach to implementation would not only protect patients, but also put downward pressure on egregiously high health care prices. The Biden Administration ultimately adopted an approach to implementing the No Surprises Act and the independent dispute resolution process to determine payments for out-of-network services that proved sensible and promises to help lower health care costs for consumers, employers, and taxpayers.
Related:
Part 1: Fulfilling the Promises of the Surprise Billing Ban
Part 2: In No Surprises Act, Arbitration Design Is Key to Realizing Expected Savings
Drug Prices: Part 1
Colorado and Oregon passed Prescription Drug Affordability Board (PDAB) legislation in 2021, joining the ranks of Maryland, New Hampshire, and Ohio. The law establishes a board to monitor and address the cost of certain high-cost prescription drugs. Notably, Colorado’s legislation empowers their PDAB to recommend and establish upper payment limits for up to 12 drugs each year for all payers within the state. By harnessing state’s regulatory power to review and identify high drug prices and provide guidance for lowering them, this new mechanism offers a compelling model for other states seeking evidence-based solutions to lower the cost of drug prices for all of their constituents.
Related:
Part 1: Drug Pricing Reform Enters a Big, New Battleground: States
Part 2: In Quest to Lower Rx Prices, States Deploy New Tools
Drug Prices: Part 2
HR 5376, better known as the Build Back Better Act, includes sweeping provisions that could boost outcomes and curtail spending in health care. The legislation passed by the House this November includes AV-aligned priorities to empower Medicare to negotiate lower prices, penalize manufacturers for raising prices faster than inflation, and reform Medicare Part D to ensure life-saving medications don’t bankrupt Americans. It’s critical Congress adopt these measures to relieve the burden high drug prices have on American taxpayers and families.
Provider Payment Incentives
Arnold Ventures staff and grantees worked throughout 2021 to lay the groundwork with policymakers on a broad set of Medicare reforms as part of our recently launched initiative to improve the affordability and long-term sustainability of the Medicare program. This work helped elevate key issues related to Medicare’s fiscal challenges, including the need for reforms to Medicare Advantage as well as other parts of the program and the importance of considering both spending reductions and revenue increases. Along with grantees such as the Committee for a Responsible Federal Budget and KFF, we put forth sensible policy options to strengthen the Medicare program and raised awareness through issue briefs, public forums, and policymaker engagement (e.g., hosting a panel discussion on the hospital insurance trust fund).
Related: 5 Things to Watch for in the Medicare Trustees’ Report
Complex Care
In the United States, 12 million low-income, older adults and people with disabilities get their care through both Medicare and Medicaid. The two programs that cover different services and are operated by different arms of the government. Separate rules, processes, providers, and benefits make the system difficult to navigate. Today, states have the option to establish integrated Medicare-Medicaid models that help coordinate care and simplify the system, yet only 10% of beneficiaries who are dual eligible for Medicare and Medicaid are enrolled in integrated plans.
To build the capacity for states to advance integration and improve care for the dual-eligible population, Arnold Ventures launched a funding opportunity in 2021. Funding can be used to develop or expand new integrated models, address data gaps and healthcare equity issues, and shift care away from institutional facilities and into the home and community. Work is already underway in Indiana and North Carolina.
