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In the News: November 29–December 6

CMS Releases 4 Section 1332 Waiver Concepts

CMS recently released 4 section 1332 waiver concepts to introduce different financing options for states. States can apply for section 1332 waivers, also known as state innovation waivers, that allow them to pursue different health insurance coverage strategies.

The 4 concepts include account-based subsidies, where states can provide consumers a subsidy to pay for health insurance premiums; state-specific premium assistance, where states can create a new, state-administered subsidy program; adjusted plan options, where states can provide financial assistance for different types of insurance plans; and risk stabilization strategies, where states can address the financial risk associated with individuals who have high health care costs. States must satisfy 4 statutory requirements regarding health insurance affordability, comprehensiveness, coverage and federal deficit neutrality for their request to be approved.

Despite the increased flexibility recently afforded to state governors to implement these waivers, it remains uncertain whether states will adopt these new concepts. Seven of the eight section 1332 waivers that have been approved have been for reinsurance programs. For answers as to how state governments may use these waivers to change their state’s health insurance landscape, join the Sg2 Payment & Policy team for this year’s last Experts Live Q&A: Payment and Policy Update (Winter 2018).


A Rise in Drug Overdoses and Suicides Contributes to Declining Life Expectancy

A recent article in The Atlantic comments on the decreasing life expectancy reported by the Centers for Disease Control and Prevention in 3 reports last week. The average life expectancy in the US, 78.6 years, decreased by roughly 0.1 year since 2016. This is substantially lower than the average life expectancy of 81 years reported in Europe in 2016. A significant contributor to the decline in life expectancy throughout the United States is drug overdoses, with 70,237 deaths in the last year alone.

In addition to overdose, the US continues to lose people to suicide and to chronic lower respiratory disease, which is commonly attributed to smoking; all of these are preventable causes of death. While life expectancy decreased, the CDC reported a 0.4% increase in the rate of deaths in the past year.  Younger populations especially are contributors to this growth, as there was a 3% increase in death rates for individuals 25 to 34 years old, and a 1.6% increase in death rates for the population aged 35 to 44 years old.

As mortality from drug overdoses and suicides in the US continues to grow, these statistics are a clear indication that the behavioral health needs of our country continue to be unmet. With health systems already struggling to secure access to behavioral health services, Sg2 believes that behavioral health community partnerships are a critical component of the behavioral health System of CARE. To learn more about developing and leveraging hospital-community partnerships for behavioral health, read our FAQ: Behavioral Health Community Partnerships.


HHS Finalizes 340B Rule Imposing Price Ceiling

On Thursday, the US Department of Health and Human Services finalized a rule imposing limits on the 340B drug discount program, which is set to go into effect on January 1, 2019. This rule prevents pharmaceutical companies from overcharging 340B program participants by placing a price ceiling on what providers are required to pay.

HHS had previously delayed the start date of the rule 5 times, stating at one point that it needed additional time to consider new regulations proposed by the Trump administration that would replace Obama-era regulations. However, HHS changed its position after the American Hospital Association and other health care trade groups sued HHS with the intention of forcing the government agency to finalize the rule.

As changes to the 340B program are implemented, Sg2 believes that hospital and health systems will need to more effectively manage drug utilization and costs. Drug spending will be especially relevant in oncology given the emergence of novel therapies that drive up the overall cost of care. For strategies on navigating oncology drug costs, watch the on-demand webinar Cancer Update 2017: Navigating the Murky Waters of Drug Costs.

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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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