Value-Based Care News Digest - May 2020

May 26, 2020

As COVID-19 transforms health care, it's also reshaping the pursuit of value. After a brief hiatus, the digest is back with two-plus months of news about deals, policies, regulations and innovations.

Top Trending Themes

  1. Investors are eager to jump into telemedicine as COVID-19 has accelerated its growth, and widespread adoption indicates that it may continue to reshape care delivery post-pandemic.*
  • According to a study conducted at NYU Langone Health, virtual urgent care visits increased by 638% while non-urgent virtual visits grew by 4,345% between March 2 and April 14. The study also found an increase in postoperative and post-procedural follow-ups via telemedicine. Although the study focused solely on patients seeking care in New York, the results remain consistent with the widespread adoption of telemedicine during the pandemic.
  • Medici, an Austin-based virtual health care company, saw a 1,409% increase in patient registrations from February to April. The company also raised $24 million in Series B funding. Medici offers a HIPAA-compliant virtual health care platform for more than 25,000 health care providers and their patients to securely communicate via text, voice and video chat. Unlike some other platforms, Medici also allows patients to connect with their regular doctor rather than matching them with a random provider.
  • Vida, a virtual health care platform that focuses on behavioral health, saw 500,000 new users since the beginning of COVID-19, bringing its total lives covered to 1.4 million. Vida recently raised an additional $25 million. Founded in 2014, Vida pairs users with a health coach knowledgeable in the area of need, addressing nutrition, fitness, weight loss, stress management, diabetes or other conditions.
  1. Payers have been largely spared from the financial losses that health systems and providers are experiencing due to COVID-19. Some are attempting to ease the burden on providers and employers.
  • United Health announced in early April that it was accelerating payments of more than $2 billion to providers to help offset the influx of COVID-19 patients and sharp decreases in elective procedures. This effort applies to UnitedHealth commercial, Medicare Advantage and Medicaid beneficiaries.
  • BCBS of Arizona has developed a partial prepayment plan for primary care providers enrolled in their Patient Centered Medical Home program. Receiving a partial prepayment of their estimated annual quality incentive payment will allow providers to potentially cover monetary shortfalls due to COVID-19.
  • Premera Blue Cross announced in early April that it would provide up to $100 million in advance payments of claims to medical, dental and behavioral health providers in Washington State and Alaska in response to their financial challenges from the pandemic. These funds will be recouped by Premera as a percentage of claims over the course of nine months beginning January 1, 2021.
  • Priority Health of Michigan will provide premium rate relief for individual plan members and small group employers for June and July, and it will waive cost-sharing for Medicare Advantage members for in-person and telehealth primary care services until the end of the year.
  1. Medicare Advantage (MA) insurers and dialysis providers are raising funds and launching initiatives to manage beneficiaries with end-stage renal disease (ESRD), who will be able to enroll in MA plans for the first time later this year.
  • Currently, ESRD patients are the only patient group barred from enrolling in Medicare Advantage, except in limited circumstances. The 21st Century Cures Act, signed into law by former President Barack Obama in 2016, lifted that restriction beginning in 2021. The Centers for Medicare and Medicaid Services (CMS) said it expects 83,000 ESRD patients to switch to MA due to the Cures Act provision, with half of those enrolling in 2021 alone.
  • Medicare Advantage plans are bracing for a flood of patients with ESRD. According to Modern Healthcare, Emblem Health and Humana, for example, are working with dialysis providers to develop value-based care arrangements, and Priority Health in Michigan is training care managers about the disease and investing in analytics to identify opportunities to improve care. For plans seeking to offer more services in patients' homes, CVS has a home hemodialysis device now in clinical trials, which could be on the market by the second half of 2021.
  • DaVita launched DaVita Venture Group (DVG) to facilitate efforts to develop solutions for patients with kidney disease and related chronic conditions. "DaVita Venture Group aims to find new solutions for our patients that go beyond dialysis," said Steve Phillips, vice president of innovation for DVG.
  • Monogram Health, which provides kidney disease patients with at-home care management,  secured $7 million in funding through the closing of a Series A-1 financing round. The new round brings the total funds raised to $12 million in the past 15 months. Monogram currently operates its programs for thousands of patients across the U.S., including Humana Medicare Advantage and commercial plan members in Louisiana and Mississippi.

COVID-19 News

Visit Evolent's COVID-19 Resource Center for additional information about regulatory changes, policies and other actions taken in response to the pandemic. Click here to jump to our roundup of non-COVID-19 news related to value-based case.

General News

Payers

Health Systems

Federal Government

  • Over the past two months, the federal government has committed more than $6 trillion, through legislation and the Federal Reserve, to address the coronavirus pandemic and economic recovery. Approximately $250 billion is going out through the U.S. Department of Health and Human Services (HHS). These include a $175 billion Provider Relief Fund to reimburse providers for COVID-19-related expenses and lost revenue; more than $55 billion for vaccines, medical supplies and testing; roughly $14 billion for HHS agencies including the CDC and NIH; and $6 billion for community health centers. Medicare will see a 2% reimbursement bump in May through December and a 20% add-on payment for inpatient COVID-19 DRGs. States will see a 6.2% boost in their federal Medicaid match if they meet certain conditions around maintenance of coverage and premiums.
  • Some health care providers who fit the small business criteria are taking advantage of the SBA's Paycheck Protection Program (funded at $659 billion) to cover up to eight weeks/$10 million toward expenses such as payroll, utilities, mortgage/rent—a forgivable loan if certain conditions are met. For others, the Fed has stepped in to cut interest rates and support up to $2.3 trillion in lending, some of which backed by $454 billion in new funds from the CARES Act.
  • CMS expanded its Accelerated and Advanced Payments Program to provide upfront cash flow for Medicare providers in response to COVID-19. By late April it had already paid out $100 billion to about 45,000 applicants and had suspended the program. CMS has also postponed certain reporting deadlines and produced interim rules to mitigate risk and provide alternate participation options for Medicare Shared Savings Program ACOs.

State Government

People on the Move


Non-COVID-19 News

Payers and Providers

General Industry News

Survey Says/Studies Show

  • The medical loss ratio rule, designed to lower premiums and protect consumers, has shown mixed results in practice. While many experts agree the rule helped ensure members got more value for their premiums and encouraged insurers to reduce administrative costs and operate more efficiently, they also believe the rule may have increased M&A activity and medical claims costs. "It's evidence that the medical loss ratio was an extremely blunt tool for what it was trying to accomplish," said Steve Cicala, an assistant professor at the Harris School of Public Policy at the University of Chicago. "When you try to regulate profit margins, firms have an incentive to respond by strategically adjusting their costs." Payers were driven to merge in order to reduce overhead, thereby decreasing competition. They also may have increased medical claims costs, rather than reducing administrative spend, in order to meet the minimum threshold.
  • Comprehensive care programs reduced inpatient, emergency department, and overall health care spend for children with medical complexity, a study found. After two years, the group in the study saw a 4.6% decrease in overall per member, per year spending, 7.7% in inpatient spending, and 11.6% in emergency department spending. The study leveraged a dynamic care team of providers, development of specific care plans, individualized access and contingency plans, and a patient registry to address the patients' needs.

People on the Move

*These descriptions solely represent summaries of recent events in value-based care and do not contain any endorsements for any of the companies named.

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