Dose | Health Policy Week in Review + SPAC Corner MA Enrollment on Trend; New Entrants Struggle

Chart of the Week

Congress

Budget Reconciliation. Majority Leader Chuck Schumer announced agreement on the outline of FY 2022 budget reconciliation instructions…with other Democrats. It is not apparent yet, how much of the $3.5T deal is dedicated to health care but likely for inclusion in the final deal are:

• Expansion of Medicare benefits to include hearing, vison and dental. The total cost is about $300B, so large enough to get ditched if moderate Democrats insist on reducing the size of the package. Inclusion of these benefits is a negative for MA plans that have relied in the past on supplemental benefits to sell the plans. That, of course, is part of the point. Progressives like Sen. Bernie Sanders dislike MA which they consider privatization. (UNH, ANTM, CI, CLOV, ALHC)
• Permanently extending tax credits and subsidies to people making over 400% of FPL. This policy is in place now as a result of the American Rescue Plan Act. The cost of extending the subsidies to everyone is about $200B so it may also get chopped if moderates insist on a smaller overall package. The one saving grace of this policy is strong White House support. Extending subsidies to purchase insurance to the well-heeled, if made permanent, is a headwind for PEOs that offer health insurance purchased at scale for small businesses. (NSP)
• Closing the Medicaid Gap for people living in non-expansion states who are not eligible for either ACA exchange subsidies or Medicaid. There is no decision yet on how Congress plans to approach this problem and of all the health provisions it is the most likely to get axed. Making insurance accessible to the uninsured in non-expansion states will defeat the long-term policy goal of national expansion.
• Drug policy seems to be the favorite pay-for necessary to get all of this done. The approach is going to depend on who Democrats need to keep on board. The drug lobby for all of the bruising they have taken, has a lot of bipartisan friends.

Hearings Next Week.

Senate Committee on Health, Education, Labor and Pensions The Path Forward: A Federal Perspective on the COVID-19 Response  | Tuesday, July 20^th, 2021 at 10:00 A.M.

The White House

Medicare Rule-A-Rama. This week, CMS released:

Physicians Fee Schedule for 2022 and “other revisions to Medicare Part B.” It is 1700 pages long and I am still getting through it but here are a few highlights:

• The 3.75% payment increase included in the Consolidated Appropriations Act of 2021 plus a few other factors means the 2022 Conversion Factor is $33.58, a decrease of $1.31 from 2021.
• Refinement to E/M codes that defines a split visits as one provided in a facility by a physician and an NPP in the same group.
• CMS is extended until Dec. 31, 2021, certain telehealth services permitted under the Public Health Emergency.
• As the geographical restrictions were removed and the in-home originating site added for mental health services by the CAA, CMS is implementing this new policy with a few important restrictions:
  • There must be an in-person, non-telehealth service visit with a physician or other clinician at least six-month prior to the first telehealth encounter. Thereafter the physician pr clinician must see the patient in person at least once every six months; Put another way, mental health services delivered via digital means are for established patients.
  • Audio-only visits will be permitted for mental health services provided to patients in their homes.
  • Payments for physical and occupation therapy services are reduced by 15% pursuant to the Bipartisan Budget Act of 2018 beginning Jan. 1, 2022.
  • Pursuant to the CAA, Physicians Assistants will be permitted to bill Medicare directly and reassign payment for their services to a group practice.
  • Implements co-insurance rule for colorectal screening procedures that become diagnostic (e.g., removal of a polyp). Beginning Jan. 1, 2022, the coinsurance amount will be 20% and reduced each year by 5% until it reaches 10% in 2027. Coinsurance is eliminated entirely in 2030.
  • Expands coverage of outpatient pulmonary rehabilitation services to beneficiaries who were hospitalized with COVID-19 and experiencing persistent symptoms.

Still waiting on:

CY 2022 Hospital Outpatient PPS Policy Changes and Payment Rates. Proposed Rule.

FY 2022 Skilled Nursing Facility PPS. Final Rule

FY 2022 Inpatient Rehabilitation Facility PPS. Final Rule

FY 2022 Inpatient Psychiatric Facilities PPS. Final Rule

Most Favored Nation Model (Part B drugs)

Other Stuff

Medicare Advantage Enrollment. The July print for Medicare enrollment suggests growth continues on trend at ~10% YoY growth. As noted above, the political headwinds do blow. Also we must be mindful of penetration. Overall about 43% of the eligible population are enrolled in MA plans as of the end of 2Q. In some places, like south Florida, it approaches 75%.

Not everyone shares in the wealth.

Among the more recent entrants, ALHC has turned in the best enrollment growth although still a very tine company. 

OSCR, which turned to MA as a result of its struggles getting traction in the individual market and difficulty overcoming some anti-competitive practices in Florida, is not moving mountains. Their opportunity probably lies with expansion of the ACA subsidies.

CLOV is a nearly an unqualified mess. Despite being involved in MA plans for years, 2Q enrollment was about 350 people. Of the 227 counties in which they offer a plan, they lost enrollment in 28, had zero enrollment in 143 and had positive gains in 56. It is going to be difficult for the company to hit its 4Q target of 68-70k whic, of course means delivering ME revenue below projections. Of course, the Direct Contracting Program may save the day but visibility there is low.

Note: Enrollment data based on county level disclosures which may vary slightly from Company numbers.

NCD for Aduhelm. As expected, CMS has opened up a National Coverage Determination for Aduhelm. 

SPAC and S-1 Corner.

Interesting S-1s

Quiet week this week.

You can access the updated SPAC spreadsheet %20Congress.%20Budget%20Reconciliation.%20Majority%20Leader%20Chuck%20Schumer%20announced%20agreement%20on%20the%20outline%20of%20FY%202022%20budget%20reconciliation%20instructions…with%20other%20Democrats.%20It%20is%20not%20apparent%20yet,%20how%20much%20of%20the%20$3.5T%20deal%20is%20dedicated%20to%20health%20care%20but%20likely%20for%20inclusion%20in%20the%20final%20deal%20are:%20• 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Closing%20the%20Medicaid%20Gap%20for%20people%20living%20in%20non-expansion%20states%20who%20are%20not%20eligible%20for%20either%20ACA%20exchange%20subsidies%20or%20Medicaid.%20There%20is%20no%20decision%20yet%20on%20how%20Congress%20plans%20to%20approach%20this%20problem%20and%20of%20all%20the%20health%20provisions%20it%20is%20the%20most%20likely%20to%20get%20axed.%20Making%20insurance%20accessible%20to%20the%20uninsured%20in%20non-expansion%20states%20will%20defeat%20the%20long-term%20policy%20goal%20of%20national%20expansion.%20• Drug%20policy%20seems%20to%20be%20the%20favorite%20pay-for%20necessary%20to%20get%20all%20of%20this%20done.%20The%20approach%20is%20going%20to%20depend%20on%20who%20Democrats%20need%20to%20keep%20on%20board.%20The%20drug%20lobby%20for%20all%20of%20the%20bruising%20they%20have%20taken,%20the%20drug%20industry%20has%20a%20lot%20of%20bipartisan%20friends.%20We%20%20The%20White%20House.%20Medicare%20Rule-A-Rama.%20This%20week,%20CMS%20released:%20Physicians%20Fee%20Schedule%20for%202022%20and%20“other%20revisions%20to%20Medicare%20Part%20B.”%20It%20is%201700%20pages%20long%20and%20I%20am%20still%20getting%20through%20it%20but%20here%20are%20a%20few%20highlights:%20• The%203.75%%20payment%20increase%20included%20in%20the%20Consolidated%20Appropriations%20Act%20of%202021%20plus%20a%20few%20other%20factors%20means%20the%202022%20Conversion%20Factor%20is%20$33.58,%20a%20decrease%20of%20$1.31%20from%202021.%20• Refinement%20to%20E/M%20codes%20that%20defines%20a%20split%20visits%20as%20one%20provided%20in%20a%20facility%20by%20a%20physician%20and%20an%20NPP%20in%20the%20same%20group.%20• CMS%20is%20extended%20until%20Dec.%2031,%202021,%20certain%20telehealth%20services%20permitted%20under%20the%20Public%20Health%20Emergency.%20%20• As%20the%20geographical%20restrictions%20were%20removed%20and%20the%20in-home%20originating%20site%20added%20for%20mental%20health%20services%20by%20the%20CAA,%20CMS%20is%20implementing%20this%20new%20policy%20with%20a%20few%20important%20restrictions:%20o There%20must%20be%20an%20in-person,%20non-telehealth%20service%20visit%20with%20a%20physician%20or%20other%20clinician%20at%20least%20six-month%20prior%20to%20the%20first%20telehealth%20encounter.%20Thereafter%20the%20physician%20pr%20clinician%20must%20see%20the%20patient%20in%20person%20at%20least%20once%20every%20six%20months;%20Put%20another%20way,%20mental%20health%20services%20delivered%20via%20digital%20means%20are%20for%20established%20patients.%20o Audio-only%20visits%20will%20be%20permitted%20for%20mental%20health%20services%20provided%20to%20patients%20in%20their%20homes.%20• Payments%20for%20physical%20and%20occupation%20therapy%20services%20are%20reduced%20by%2015%%20pursuant%20to%20the%20Bipartisan%20Budget%20Act%20of%202018%20beginning%20Jan.%201,%202022.%20%20• Pursuant%20to%20the%20CAA,%20Physicians%20Assistants%20will%20be%20permitted%20to%20bill%20Medicare%20directly%20and%20reassign%20payment%20for%20their%20services%20to%20a%20group%20practice.%20• Implements%20co-insurance%20rule%20for%20colorectal%20screening%20procedures%20that%20become%20diagnostic%20(e.g.,%20removal%20of%20a%20polyp).%20Beginning%20Jan.%201,%202022,%20the%20coinsurance%20amount%20will%20be%2020%%20and%20reduced%20each%20year%20by%205%%20until%20it%20reaches%2010%%20in%202027.%20Coinsurance%20is%20eliminated%20entirely%20in%202030.%20• Expands%20coverage%20of%20outpatient%20pulmonary%20rehabilitation%20services%20to%20beneficiaries%20who%20were%20hospitalized%20with%20COVID-19%20and%20experiencing%20persistent%20symptoms.%20Still%20waiting%20on:%20CY%202022%20Hospital%20Outpatient%20PPS%20Policy%20Changes%20and%20Payment%20Rates.%20Proposed%20Rule.%20FY%202022%20Skilled%20Nursing%20Facility%20PPS.%20Final%20Rule%20FY%202022%20Inpatient%20Rehabilitation%20Facility%20PPS.%20Final%20Rule%20FY%202022%20Inpatient%20Psychiatric%20Facilities%20PPS.%20Final%20Rule%20Most%20Favored%20Nation%20Model%20(Part%20B%20drugs)%20Other%20Stuff.%20Medicare%20Advantage%20Enrollment.%20The%20July%20print%20for%20Medicare%20enrollment%20suggests%20growth%20continues%20on%20trend%20at%20~10%%20YoY%20growth.%20%20%20Not%20everyone%20shares%20in%20the%20wealth.%20%20SPAC%20and%20S-1%20Corner.%20%20Interesting%20S-1s%20Quiet%20week%20You%20can%20access%20the%20updated%20SPAC%20spreadsheet%20here.%20%20If%20you%20are%20investing%20in%20SPACs%20but%20not%20super%20familiar%20with%20health%20care,%20hit%%20and%20we%20can%20help.%20Recent%20Events.%20Upcoming%20Events.%20Note%20Date%20&%20Time%20Change:%20Aug.%204%20@%2012:30%20p.m.%20ET,%20Brad%20Smith,%20former%20Director%20of%20the%20Innovation%20Center%20at%20CMS%20and%20I%20will%20be%20talking%20about%20the%20history%20and%20potential%20of%20direct%20contracting.%20%20Emily%20Evans%20Managing%20Director%20–%20Health%20Policy%20%20x%20271%20%%20Twitter%20LinkedIn%20" target="_blank">here.

If you are investing in SPACs but not familiar with health care, hit and we can help.

Upcoming Events.

Note Date & Time Change: Aug. 4 @ 12:30 p.m. ET, Brad Smith, former Director of the Innovation Center at CMS and I will be talking about the history and potential of direct contracting.

Emily Evans
Managing Director – Health Policy



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