West Virginia and Kentucky Institute Medicaid Program Changes

Changes to West Virginia's and Kentucky's Medicaid programs, allowed for under the 2005 Deficit Reduction Act, were approved by the U.S. Department of Health and Human Services (HHS) in May. As an alternative to the basic plan, West Virginia will offer Medicaid enrollees an enhanced package option with benefits such as smoking cessation help, nutritional education, diabetes care, and mental health services. To encourage enrollees to adopt healthy behaviors, those in the enhanced plan must sign an agreement with the state promising to comply with all recommended treatment and wellness behaviors. In the first year, the state will track whether the enrollees adhere to screening directions and health improvement programs, attend scheduled appointments, and take medication as indicated. Access to the enhanced benefits may be lost by those who do not keep the agreement. Kentucky will offer enrollees customized benefits according to their age and health status, with one package aimed at healthy children and other plans to serve more complex needs. Enrollees with health conditions such as diabetes or chronic obstructive pulmonary disease will be offered “Get Healthy” benefits including dental and vision services and nutrition counseling. Cost sharing will be reduced through a $10 co-pay for inpatient admission and the waving of co-pays for physician, vision, dental and other services. Kentucky also will help enrollees purchase health care through their employers, if they choose. For more information, visithttp://www.hhs.gov/news/press/2006pres/20060503.html (West Virginia) orhttp://www.hhs.gov/news/press/2006pres/20060503a.html (Kentucky).

Stable Formularies Guaranteed for Medicare Part D Beneficiaries

A new policy from the Centers for Medicare and Medicaid Services requires Medicare Part D drug plans to continue coverage of medications for Medicare beneficiaries even if the drugs are dropped from their formularies. The policy is in response to concerns about the potential use of “bait-and-switch” tactics, in which plans could offer coverage of certain drugs only to drop that coverage after enrollees had signed up. The new policy ensures that beneficiaries have coverage of drugs that were on the plan when they enrolled; beneficiaries would not be subject to a discontinuation or reduction in coverage of drugs they are using without clear scientific or cost reasons (e.g., generic availability). Previously, plans could change their formularies by dropping drugs, changing co-payments, or introducing use requirements each month, although patients could not change their plan enrollment for one year. The new policy will be effective at least through 2006, and provisions will be included in future contracts. For more information, visithttps://www.aafp.org/online/en/home/publications/news/news-now/government-medicine/20060503stableformularies.html.

HHS Awards Contracts to Develop Cell-Based Influenza Vaccine

Continuing preparations for a possible influenza pandemic, the HHS awarded contracts totalling more than $1 billion to speed the development and production of cell-based influenza vaccines within the United States. Cell-based technology, rather than egg-based production, is used in many other vaccines and is a reliable, flexible, and scalable method, the HHS stated. With a cell-culture approach, manufacturers can bypass steps needed to adapt virus strains to grow in chicken eggs. The approach enables the quick production of large volumes of vaccine, which would help meet surge capacity needs in an emergency; secures against the risk of egg shortages caused by poultry-based diseases; and provides an option for those allergic to eggs. Five companies were awarded contracts, including Solvay Pharmaceuticals ($298.59 million), GlaxoSmithKline ($274.75 million), and Novartis Vaccines and Diagnostics ($220.51). For more information, visithttp://www.hhs.gov/news/press/2006pres/20060504.html.

AHRQ Partners with Business Coalitions to Improve Diabetes Care

The Agency for Health Care Research and Quality (AHRQ) is partnering with three business coalitions—Greater Detroit Area Health Council, MidAtlantic Business Group on Health, and Memphis Business Group on Health—to help improve the quality of diabetes care across communities. According to an AHRQ report, only about 50 percent of persons with diabetes routinely receive recommended health care services such as eye and foot examinations and A1C tests. The Improving Diabetes Care in Communities Collaborative will support the efforts of local communities to reduce obesity and other diabetes risk factors, and will work to ensure the appropriate health care services are given to persons with diabetes. The coalitions will work with businesses, health care providers, and insurers to develop strategies such as a return on investment calculator to estimate the financial benefits of disease management, and a guide for employers on managing diabetes care with health plans. Lessons learned will be shared with communities nationwide. AHRQ resources are available athttp://www.ahrq.gov/qual/diabqualoc.htm. For more information, visithttp://www.ahrq.gov/news/press/pr2006/diabcolpr.htm.

Annual Report Raises Concern for Medicare's Financial Outlook

The financial outlook for the Medicare program continues to raise serious concerns, according to the Medicare Trustees Annual Report, released in May. Medicare covered 42.5 million people in 2005. Income was $357 billion and expenditures totalled $336 billion. Expenditures are expected to increase at a faster rate than workers' earnings and the overall economy. The Hospital Insurance trust fund, the report projects, will be exhausted in 2018—two years earlier than the previous year's estimate. Part B benefits have increased by an annual 10.6 percent on average over the last six years, and Part D benefits are expected to increase an average of 11.5 percent annually through 2015. The difference between overall expenditures and dedicated revenues is expected to reach 45 percent of outlays by 2012, leading the Board of Trustees to issue a determination of “excess general revenue Medicare funding”; a second determination next year would require a legislative proposal to address the issue in the next budget. The full report is available athttp://www.cms.hhs.gov/ReportsTrustFunds/. For more information, visithttp://www.hhs.gov/news/press/2006pres/20060501.html orhttp://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1846.

AHRQ Study Finds Increased Medicaid Spending on Outpatient Drugs

A study conducted by the AHRQ found that Medicaid spending on outpatient prescription drugs increased from $11.6 billion in 1997 to $23.7 billion in 2002, an average increase of 20 percent per year. The number of prescriptions written for enrollees also rose, as did the use of newer, more expensive classes of drugs including antidepressants, cyclooxygenase-2 inhibitors, proton pump inhibitors, and cholesterol-lowering medications. Use of generic drugs overall declined only slightly, but changes for individual drugs were more substantial. The AHRQ said the data help identify classes of medications for which more evidence is needed on the effectiveness of new drugs, and could help contain costs without reducing the quality of medical care. For more information, visithttp://www.ahrq.gov/news/press/pr2006/meddrugpr.htm.

CDC Awards $10 Million to Research Health Care–Associated Infections

As part of its Prevention Epicenter grant program, the Centers for Disease Control and Prevention (CDC) is awarding $10 million for research into reducing infections in health care settings. Each year, about 2 million infections are acquired in health care settings, causing around 90,000 deaths and costing more than $4.5 billion, the CDC said. Increasing drug resistance and new pathogens make the development of strategies to detect and reduce health care–associated infections more critical. Five academic centers, representing 58 hospitals, will receive the grants. For more information about the program, visithttp://www.cdc.gov/ncidod/dhqp/epicenter.html.