VBID to end Dec. 31, 2025
CMS will terminate the Medicare Advantage Value-Based Insurance Design (VBID) model at the end of 2025. The reason? Its “substantial and unmitigable costs” to the Medicare Trust Funds, totaling $2.3 billion in 2021 and $2.2 billion in 2022. Since its launch in 2017, the VBID model aimed to lower Medicare spending and improve care quality through various interventions. The model offered flexibility for high-value services and cost-sharing assistance for prescription drugs to chronically ill and underserved populations to improve health and reduce avoidable medical spending. (Healthcare Finance News; CMS)
Fighting AI with AI?
As insurers use AI for coverage decisions, providers and patients are turning to AI to accelerate approval processes. Startups are creating seamless methods for challenging denials. Reducing hassle is crucial: Over 80% of AMA members don’t always appeal denials due to perceived futility, limited time, or urgent care needs. Concerns about AI in coverage decisions persist, with lawsuits against insurers like UnitedHealth Group and Cigna. Even AI proponents on the patient/provider side acknowledge generative AI products can contain errors, causing more work later. (Modern Healthcare)
Practice Transformation
Proposed HIPAA update aims to bolster cybersecurity
HHS plans to update HIPAA to strengthen protections against cyber threats. It issued a proposed rule on Dec. 27. In 2023, over 167 million were affected by healthcare data breaches. The 2024 numbers are expected to be higher, thanks to the repercussions of the 2024 post-Change Healthcare ransomware attack. Among the changes: providers would be required to: encrypt most electronic health data; implement multifactor authentication “with limited exceptions”; deploy antimalware software; and establish written procedures to restore EHR systems and data within 72 hours of a cyberattack. (Becker’s Hospital Review; proposed rule)
AI, new administration drive 2025 predictions
Healthcare predictions for 2025 highlight AI advancements and Trump’s health-related appointments. Politico focuses on health policy and Robert F. Kennedy Jr.’s confirmation hearings, and ask whether Mehmet Oz — tapped as CMS chief — will extend Medicare coverage for anti-obesity drugs. (Oz and (Kennedy disagree about their value.) In Forbes, Dr. Sachin J. Jain predicts traditional allopathic medicine and public health will be put on the defense and misinformation will worsen. AI advancements, including increased use of AI scribes and virtual care, are high on many lists. (Politico; Forbes; Fierce Healthcare)
Evidence & Innovation
Medicare drug prices capped as costs rise
A key provision of the Inflation Reduction Act went into effect Jan. 1, limiting annual out-of-pocket spending on prescription drugs to $2,000 for Medicare beneficiaries. This annual cap will be indexed to the rate of inflation every year. Meanwhile, also on Jan. 1, drugmakers increased U.S. prices on at least 250 branded medications, including Pfizer’s COVID-19 treatment Paxlovid and Bristol Myers Squibb’s cancer cell therapies. Nearly all the increases are below 10%, and the median price increase is 4.5%, which is in line with 2024. The U.S. pays more for prescription medicines than any other country. (The Hill; Reuters)
Policy Solutions
Transparency is more than posting prices
Posting hospital prices hasn’t brought down the cost of health care. Despite price posting mandates, family insurance costs rose 24% since 2019. Recent efforts focus on empowering employers and communities to negotiate better rates using new transparency tools. For example, Colorado programs incentivizing cost-effective care have saved millions for state employee health plans, with rebates for choosing fair-priced providers. However, confusing pricing structures and market factors limit savings for individuals. Employers play a critical role in leveraging these tools to drive down costs, but it still remains uncertain if transparency will significantly improve healthcare affordability. (Medical Xpress)
