Health Prices Rising Much Faster in the Private Sector than Medicare

Axios | By Caitlin Owens

Health care prices overall may be lagging inflation, but there's a widening divergence between what's being paid in Medicare and the private sector, according to a new Altarum analysis.

Why it matters: Privately-insured Americans are about to pay more for their health care, if they aren't already.

The big picture: Economy-wide inflation has outpaced health care inflation over the last year — an anomaly, since medical prices typically rise faster.

• Last month, overall prices were 8.5% higher than in July 2021, but prices for medical care were only 4.8% higher, per KFF.
• Medical prices have risen by 110.3% since 2000, whereas economy-wide prices have risen by 71%.

Yes, but: July also saw a substantial divergence in what Medicare and the private sector pay for goods and services, which essentially cancelled each other out in the aggregate, according to the Altarum analysis.

• Medicare prices fell by almost an entire percentage point last month, which dropped them below where they were in January 2021.
• The drop was due to low or no increases in the reimbursement rates for hospitals and physician services, which are decided by the federal government, and mandatory cuts for Medicare provider payments kicking in this year.

In the private sector, the opposite happened: prices rose last month and reached 5.4% above what they were in January 2021.

• "We believe many of these increases are occurring as new contracts or updated rates are slowly taking effect, and further expect there may be a noticeable discrete jump in private prices beginning in 2023," the authors write.
• Hospital rates have risen the most and are 7.2% higher than January 2021. They've risen by nearly a full percentage point in each of the past three months alone.
• Faster increases within the hospital sector may be a result of greater negotiating power with insurers amid ongoing consolidation, the authors note.

The bottom line: There's already a huge difference between what Medicare and private insurers pay for health services, and that disparity is on track to only grow.

Fighting Current and Future Coronaviruses with a Single Vaccine

National Institutes of Health | By Sharon Reynolds

Vaccines against SARS-CoV-2, the virus that causes COVID-19, have greatly reduced the risk of severe disease and death. However, SARS-CoV-2 continues to mutate in unpredictable ways that can reduce the effectiveness of the current vaccines. The risk of a new coronavirus spilling over from animals to people also remains a serious concern.

Researchers are trying to produce a vaccine that would protect people from both future SARS-CoV-2 variants and related coronaviruses that might pose a threat. To this end, an NIH-funded team led by Dr. Pamela Bjorkman from the California Institute of Technology created a nanoparticle-based vaccine that prompts B cells, which produce antibodies, to recognize parts of coronaviruses that mutate less often.

Current COVID-19 vaccines target parts of the SARS-CoV-2 virus that quickly mutate. Like those, the nanoparticles in the investigational vaccine display a part of the coronavirus spike protein called the receptor binding domain (RBD), which coronaviruses use to enter human cells.

However, the team combined RBDs from eight different coronaviruses for their vaccine. Each nanoparticle included 60 RBDs, so that any two adjacent RBDs were rarely from the same coronavirus. B cell receptors bind strongly to identical targets that are near each other. So, this design encouraged B cells to target areas that were similar across the RBDs—ones that tend to mutate more slowly.

The researchers tested the new vaccine, called mosaic-8, as well as a nanoparticle vaccine made only with RBDs of SARS-CoV-2. Results were published on August 5, 2022, in Science.

The team used mice that were engineered to make the human ACE2 protein—the target of the SARS-CoV-2 spike. Following vaccination with mosaic-8, the mice produced antibodies that recognized a range of coronaviruses. As expected, the antibodies recognized parts of the RBDs that remained similar between coronaviruses.

When challenged with SARS-CoV-2, mice that received either of the nanoparticle vaccines were protected against symptoms of severe COVID-19. However, only the mosaic-8 vaccine also protected mice against a related virus, SARS-CoV, which caused the SARS outbreak of 2003. This protection occurred even though SARS-CoV wasn’t part of the mosaic-8 nanoparticle.

Similar results were seen in non-human primates. Monkeys that received either the mosaic-8 nanoparticle or the SARS-CoV-2 nanoparticle were protected against severe COVID-19. But those that received the mosaic-8 vaccine were also protected against the SARS-CoV-2 Delta variant and SARS-CoV, neither of which were included in the vaccine.

“We can't predict which virus or viruses among the vast numbers in animals will evolve in the future to infect humans to cause another epidemic or pandemic,” Bjorkman says. “What we're trying to do is make an all-in-one vaccine protective against SARS-like [coronaviruses]. This sort of vaccine would also protect against current and future SARS-CoV-2 variants without the need for updating.”

The researchers are now preparing to test mosaic-8 in a human clinical trial.

Your Assistance Needed to Combat Medicare Payment Reductions for Home Health

The Health Group 

The National Association for Home Care & Hospice (“NAHC”) needs the industry to be vocal regarding the CY 2023 Medicare home health services Proposed Rule, which includes 2023 payment rates and a variety of other changes.

NAHC has submitted comments on the proposed rule which include:

• More than 300,000 Medicare beneficiaries have lost access to home health services in recent years, with over 1,000 HHAs having closed, and Medicare spending in 2020-2021 at its lowest point since 2010.
• Congress required that CMS institute a budget neutral payment model in 2020. That model underpaid home health agencies by 2.5 to 3.2 percent in contrast to the 6.9 percent overpayment alleged by CMS.
• CMS’s evaluation as to whether the new payment model was “budget neutral” is fatally flawed in its methodological approach and is inconsistent with comparable evaluations that CMS applied in other sectors.
• CMS’s evaluation methodology is at odds with the clear mandates established by Congress in 2018 in all respects.
• CMS compounds the risks to patient care by adding new, unnecessary costs while failing to adequately recognize the significant labor and transportation cost inflation that has hit home health services.
• CMS is pulling resources from home health care at a time it is depending on that care to reduce Medicare spending on hospitalizations and other care.

You can go to Ask Congress to Prevent Home Health Cuts that Will Devastate Access to Care. Support S.4605/H. R. 8581 (p2a.co) to show your support for the Preserving Access to Home Health Care Act and help to avoid home health payment cuts.  NAHC has also scheduled September 14, 2022 for a Capitol Hill Day of Advocacy. You can register for this event at NAHC Advocacy Day • RSVPify.

The proposed payment rate cut of 7.69 percent will place many home health agencies at financial risk.

Here are 4 Key Health Policy Items in the Inflation Reduction Act

Fierce Healthcare | By Robert King

The House passed on late Friday a sweeping healthcare, climate and taxes package that includes major reforms on drug prices and extends boosted Affordable Care Act subsidies through 2025.

But the sweeping Inflation Reduction Act, which now heads to President Joe Biden for his signature, could reshape many other aspects of the healthcare industry. It would give Medicare the power for the first time to negotiate a small subset of Part D and Part B drugs.

Here are four other health policy changes to look for in the bill:

• Expands eligibility for low-income Part D subsidies. The bill expands who can qualify under the Low-Income Subsidy Program that helps meet Part D cost-sharing burdens like deductibles. Currently, a beneficiary qualifies for the program if they earn up to 135% of the federal poverty level and get partial benefits for 135% to 150% of the level. The law would expand full benefits to those who earn between 135% and 150%, according to an analysis from the Kaiser Family Foundation.

• Gets rid of the cost sharing for adult vaccines for Medicare Part D. It also requires states to cover all vaccines for Medicaid and Children’s Health Insurance Program beneficiaries. The benefit though only applies to any vaccines that get cleared by the Centers for Disease Control and Prevention's Advisory Committee on Immunization Practices.

• Delays the controversial Part D rebate rule, again. The Trump-era rule would get rid of the safe harbor for Part D rebates, leaving them open to prosecution under federal anti-kickback laws. The rule passed at the tail end of Trump’s term but has never gone into effect. The law would delay the rule from going into effect again into 2032.

• Limits the premium growth on Medicare Part D to no more than six percent a year from 2024 through 2029. The cap on premium growth is intended to mitigate the impact of other changes to Part D, said Ryan Urgo, managing director of the policy practice at consulting firm Avalere Health. The legislation includes a $2,000 out-of-pocket cost cap on Part D drugs, spread out in installments for the beneficiary over a calendar year. Part D plans will also have to pick up more of the costs for spending in the catastrophic coverage phase, which a beneficiary reaches when their drug costs reach a certain level.

Experts say regulating the bill will have a big impact on providers, including those that rely heavily on reimbursements for Medicare Part B drugs. 

Some providers purchase their own products under a buy and bill model and then get reimbursed by Medicare for the average sales price of the Part B drug plus 4% for storage and handling costs. The problem is that model doesn’t work if Medicare will reimburse for a smaller negotiated rate, experts say.

“If you are buying high and getting paid low you are, in essence, underwater,” Urgo told Fierce Healthcare. “If you are buying a drug at $1,000 and the reimbursement under Medicare with [the negotiated price] is only $800 you are $200 in the red. To address that there is going to be a need for providers to purchase products at the [negotiated rate] as opposed to market prices.”

The Community Oncology Alliance has raised concerns about this potential change. 

“History has clearly documented that bluntly cutting Medicare payments like proposed in the reconciliation bill, will lead to cancer practice closures and consolidations,” said COA Executive Director Ted Okon in a statement back in July when the drug price reform text was introduced. 

Sen. John Barrasso, R-Wyoming, proposed an amendment to the bill that would have required drugmakers to rebate the government any excess costs above the negotiated prices. The amendment was not agreed to before the final passage earlier this month.