Health, drug plan star ratings improve for 2018

CMS issued its star ratings for Medicare health and drug plans for 2018, which according to the agency will assist consumers with information on high-quality health choices for coverage. According to CMS, most areas across the country have Medicare Advantage and Part D plans with four or more stars. In 2018, approximately 73 percent of Medicare Advantage enrollees with prescription drug coverage will be in plans with four and five stars. This rose from the approximately 69 percent of enrollees in four and five star plans in 2017. Approximately 44 percent of Medicare Advantage plans that offer prescription drug coverage will have an overall rating of four stars or higher in 2018.

Medicare Part D prescription drug plan enrollees are also benefiting from improved access to high-quality plans. In 2018, approximately 47 percent of enrollees in stand-alone prescription drug plans will be in plans with four and five stars. This is an increase from the approximately 41 percent of enrollees in four or five star plans in 2017. Approximately 52 percent of stand-alone prescription drug plans will have a rating of four stars or higher in 2018.

The number of Medicare Advantage plans available to individuals to choose from is increasing from about 2,700 to more than 3,100 nationwide. More than 85 percent of people with Medicare will have access to 10 or more Medicare Advantage plans.

Premiums

CMS also estimated that the Medicare Advantage average monthly premium will decrease by 6 percent to $30 in 2018 from an average of $31.91 in 2017. About 77 percent of Medicare Advantage enrollees remaining in their current plan will have the same or lower premium for 2018. CMS noted that the average basic premium for a Medicare prescription drug plan in 2018 is projected to decline to an estimated $33.50 per month.

$9.8M in refunds for consumers purchasing ‘fat burning’ health products

Almost a quarter of a million refund checks totaling more than $9.8 million will be issued to consumers who purchased “fat burning” and “weight loss” products and other dietary supplements, DVDs, or skin creams, including Pure Green Coffee Bean Plus and RKG Extreme, from Health Formulas LLC and related companies. The Federal Trade Commission (FTC) noted that the average refund per consumer will be $43.

According to the FTC’s original complaint, Health Formulas LLC, its owners, and its related companies, including Simple Pure Nutrition, advertised their products using fake “free trials,” tricked people into disclosing credit and debit card information, and then enrolled them without their permission in a costly negative-option membership program that charged them monthly for new shipments.

A subsequent court order in 2016 settled the FTC’s charges by permanently banning Health Formulas and the other 41 related companies from advertising or selling weight-loss supplements and negative option sales plans, and prohibited them from making unsupported health claims for other products, debiting people’s bank accounts without their consent, and calling consumers who asked not to be called again. It also required them to turn over approximately $10 million in assets.

Narrow MA networks reduce cost at what price?

More than one-third (35 percent) of Medicare Advantage enrollees were in “narrow” network plans, which insurers create to greater control the costs and quality of care provided to enrollees in the plan. According to a Kaiser Family Foundation (KFF) report, the size and composition of Medicare Advantage provider networks is particularly important to enrollees when they have an unforeseen medical event or serious illness. As of 2017, 19 million of the 58 million people on Medicare are enrolled in a Medicare Advantage plan, yet KFF noted that little is known about their provider networks.

Accessing this information may not be easy for enrollees and comparing networks could be especially challenging. The report noted that beneficiaries could face significant costs if they unknowingly went out-of-network. In addition to the differences across plans, the report discussed questions for policymakers about the potential for wide variations in the healthcare experience of Medicare Advantage enrollees across the country.

Findings

KFF examined data from 391 plans, offered by 55 insurers in 20 counties, which accounted for 14 percent of all Medicare Advantage enrollees nationwide in 2015. In addition to the narrow network plans, Medicare Advantage networks included less than half (46 percent) of all physicians in a county, on average. The network size also varied greatly among Medicare Advantage plans offered in a given county.

For example, while enrollees in Erie County, NY had access to 60 percent of physicians in their county, on average, 16 percent of the plans in Erie had less than 10 percent of the physicians in the county while 36 percent of the plans had more than 80 percent of the physicians in the county. Access to psychiatrists was more restricted than for any other specialty. Medicare Advantage plans had 23 percent of the psychiatrists in a county, on average; 36 percent of plans included less than 10 of psychiatrists in the county. Some plans provided relatively little choice for other specialties as well—20 percent of plans included less than 5 cardiothoracic surgeons, 18 percent of plans included less than 5 neurosurgeons, 16 percent of plans included less than 5 plastic surgeons, and 16 percent of plans included less than 5 radiation oncologists.

Conversely, broad network plans tended to have higher average premiums than narrow network plans, and this was true for both HMOs ($54 versus $4 per month) and PPOs ($100 versus $28 per month).

KFF noted that CMS should consider strategies to improve the quality of information available to current and prospective Medicare Advantage enrollees. For instance, accurate, up-to-date provider directories to inform beneficiaries as they choose plans, along with the agency’s proposal to review all Medicare Advantage networks at least every three years.

FDA effectively spends prescription drug user fee collections

After conducting its 2017 review of FDA policies and procedures and financial records related to the FDA’s use of prescription drug user fee collections, the Office of Inspector General (OIG) concluded that, overall, the FDA spent prescription drug user fee collections appropriately. Since the passage of the Prescription Drug User Fee Act (PDUFA) of 1992 (P.L. 102-571), prescription drug user fees have significantly helped in expediting the drug approval process and eliminating backlogs of pending human drug applications. The average approval time for an application prior to the PDUFA was two years (OIG Report, A-05-16-00040, September 2017).

The PDUFA

The PDUFA, which must be reauthorized by Congress every five years, authorizes the FDA to collect user fees from pharmaceutical and biotechnology companies that are seeking FDA approval of certain human drug and biological products to expedite the review of human drug applications. The user fees provide the FDA with resources, including the ability to hire more reviewers and support staff and upgrade information technology systems. According to the OIG, these resources help the FDA meet its goal of timely review of human drug and supplement applications.

Inadequate documentation

The OIG reviewed $796,065,980 in prescription drug user fees reported for October 1, 2014, through September 30, 2015, and determined that the FDA did not have adequate supporting documentation for $6,402 in travel expenses, made a duplicate payment for airfare of $1,213, and overpaid a traveler $587. The OIG attributed the inadequate documentation to oversight by FDA staff rather than a systemic issue. Therefore, the OIG made no recommendations.