Federal Antitrust Regulators Approve Cigna’s Proposed Acquisition of Express Scripts

On Monday, September 17, 2018, the Antitrust Division of the United States Department of Justice (the “DOJ”) cleared Cigna’s proposed $67 billion acquisition of Express Scripts, the country’s largest pharmacy benefit manager. While the transaction still needs the approval of certain state regulatory agencies, obtaining the DOJ’s approval was widely seen as the transaction’s most significant obstacle to overcome. Continue Reading

CMS’ Medicare Advantage Overpayment Rule: Arbitrary, Capricious, and Vacated

In a key case being watched by the industry, Judge Collyer of the United States District Court for the District of Columbia issued an opinion today granting UnitedHealthcare’s Motion for Summary Judgment in UnitedHealthcare Insurance Co. v. Azar, No. 16-157 (D.D.C.), which challenged CMS’ 2014 Overpayment Rule (the “Rule”). Judge Collyer’s decision vacated the Rule in its entirety, finding that, by effectively imposing a 100% accuracy requirement on the data that Medicare Advantage organizations (“MAOs”) report to CMS for risk adjusted payment purposes, the Rule violated the statutory mandate of “actuarial equivalence” between CMS payments for healthcare coverage under traditional Medicare and Medicare Advantage (“MA”). Moreover, the Court found that the Rule’s facilitation of False Claims Act liability for MAOs’ failures to engage in “reasonable diligence” overshot CMS’ statutory authority, and that its definition of when an overpayment is “identified” was finalized without adequate notice as required by the Administrative Procedure Act. These latter two holdings may also have significant implications in the context of CMS’ separate but similar overpayment rule for Medicare Part A and Part B providers. Continue Reading

The Blame Game: Senators Clash with the Trump Administration

Why are prescription drug prices so high in the U.S.? While this question can hardly be considered a new topic in American healthcare, the recent clash of words between the Trump Administration and Democratic Senators has once again brought focus to the issue of prescription drug prices. According to the Administration, pharmacy benefit managers (“PBMs”) and drug distributors – who President Trump has dubbed as “middlemen” – are largely to blame for higher drug prices. However, Democratic Senators, PBMs, and drug distributors have recently pushed back against the Administration’s claims, arguing that the Administration’s claims are not supported by any evidence, and, in some cases, are contrary to the core functions of PBMs and drug distributors. Continue Reading

CMS Proposes Massive Changes to ACO Program – Pushing Providers to Accept Downside Risk

On Thursday, August 9, 2018, the Centers for Medicare & Medicaid Services (“CMS”) published a Proposed Rule (the “Proposed Rule”)[1] regarding the Medicare Shared Savings Program (“MSSP” ) for Accountable Care Organizations (“ACOs”). The Proposed Rule would require ACOs to accept downside risk or shared losses sooner than under the current MSSP and would promote entities that have shown the greatest cost savings since implementation of the MSSP in 2012. Although not discussed in this article, the Proposed Rule also contains refinements to the methodology concerning ACO benchmarks and a modification to the current approach to risk adjustments, as well as changes to the MSSP’s claims-based assignment methodology and allowing beneficiaries to voluntarily align to ACOs in which their designated primary clinician is an ACO professional. Continue Reading

Reimbursement for and Documentation of Evaluation and Management Services: CMS Proposes Important Modifications

On July 12, 2018, the Centers for Medicare & Medicaid Services (“CMS”) issued a proposed rule (“Proposed Rule”) that would, among other changes: (1) reduce the documentation requirements with which physicians and other practitioners must comply in providing and billing for Evaluation and Management (E/M) services under the Medicare Physician Fee Schedule (“PFS”) on or after January 1, 2019; and (2) revise the current reimbursement methodology for E/M services under the PFS. CMS is seeking comment on the Proposed Rule through September 10, 2018. Continue Reading

CMS Continues to Push for Hospital Price Transparency in Final Rule

As discussed in our previous blog, “CMS Pushes for Hospital Price Transparency in Proposed Rule”, on April 24, 2018, the Centers for Medicare & Medicaid Services (“CMS”) announced a proposed rule (CMS-1694-P) aimed at empowering patients through better access to hospital charge information. In an effort to fulfill the proposed rule’s objective, CMS suggested an amendment to the requirements previously established by Section 2718(e) of the Affordable Care Act. Continue Reading

The Risk Corridor is Closed: Insurers Seek Recourse in the Federal Circuit

On July 30, 2018, two insurers – Moda Health Plan, Inc. (“Moda”) and Land of Lincoln Mutual Health Insurance Company – petitioned the U.S. Court of Appeals for the Federal Circuit to reconsider the Court’s June 14, 2018 ruling in which the Court held that the U.S. Department of Health and Human Services (“HHS”) is not responsible for making past-due “risk corridor payments” to insurance companies as required by Section 1342 of the Patient Protection and Affordable Care Act (“ACA”) (the “June Ruling”). Continue Reading

The Trump Administration Allows for Longer “Short-Term” Health Insurance Policies, but Coverage Stays the Same

On Wednesday, August 1, 2018, the Trump Administration issued the Short-Term, Limited-Duration Insurance Final Rule (the “Final Rule”), expanding the coverage length of “short-term, limited-duration insurance” policies under the Patient Protection and Affordable Care Act (“ACA”). Continue Reading

No Longer in Suspense: CMS Issues Final Rule Announcing that Risk Adjustment Program Transfers for 2017 will be Distributed in September

The Final Rule. In a Final Rule posted by CMS last Tuesday, July 24, 2018, CMS announced that $10.4 billion in “risk adjustment transfers” (“Risk Transfers”) for benefit year 2017 (as calculated pursuant to the Affordable Care Act’s Risk Adjustment Program (the “Risk Program”)) would be distributed to eligible exchange-participating insurers in September, 2018. The Final Rule adopts the previously published methodology for the 2017 benefit year with additional explanation. CMS says that it intends to issue a new proposed rule on the risk adjustment methodology for the 2018 benefit year. Continue Reading

AmEx Ruling May Have Big Impact on Health Insurance

The Supreme Court recently established a new rule requiring plaintiffs to analyze both sides of a two-sided credit card market, which may be applicable to health insurance – arguably one of the biggest and most complex two-sided markets in the United States. There are a number of ongoing antitrust cases involving health insurance networks that may be susceptible to the type of two-sided market analysis required by the Supreme Court in Ohio v. American Express. David Garcia and Nadezhda Nikonova discuss the AmEx case, explain the economic rationale behind the rule, and analyze its possible applicability to healthcare antitrust cases. Continue Reading

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