- A federal judge in Texas recently blocked a Biden administration policy designed to prevent Medicare insurers from paying commissions to agents and brokers who enroll people in certain plans. This decision is significant as it undermines efforts by the administration to curb abuses and ensure the accuracy of payments within the Medicare Advantage program. Roughly one-third of Medicare beneficiaries rely on brokers to navigate coverage options, with insurers traditionally paying commissions to brokers for enrolling individuals in Medicare Advantage, prescription drug, or Medigap plans. The Centers for Medicare and Medicaid Services (CMS) had sought to tighten regulations around broker compensation, but insurers had raised objections and legal challenges, arguing that the policy changes could lead to operational cutbacks and potentially threaten their viability. The recent ruling halts the new compensation cap policy pending further review of the lawsuit against it. (Article here)
- An interim study by the US Federal Trade Commission has revealed that pharmacy benefit managers (PBMs) paid their own mail-order pharmacies up to 200 times more than rival pharmacies for commonly prescribed cancer drugs, potentially generating over $1 billion in excessive revenue. PBMs, which negotiate drug prices and manage prescription plans for employers and insurers, were found to exert significant control over drug availability and pricing. The study highlighted how PBMs steer patients towards their own pharmacies, including mail-order and specialty businesses, disadvantaging competitors. The findings underscore growing scrutiny on PBMs from lawmakers and stakeholders alike, amid accusations of inflating medication costs and concerns over industry practices. (Article here)
July 17, 2024
Payers | Tea Leaves