Pa. Medicaid plans get Hepatitis C help
The insurer Health Partners Plans had 32 percent of the Medicaid market in Southeastern Pennsylvania last year, but accounted for 70 percent of regional spending on hepatitis C drugs.
The insurer Health Partners Plans had 32 percent of the Medicaid market in Southeastern Pennsylvania last year, but accounted for 70 percent of regional spending on hepatitis C drugs.
That meant the Philadelphia company spent $32 million on expensive new drugs to treat the disease that damages the liver - and had to absorb 60 percent of that outlay as a loss because its contract did not include enough money to cover a surge in hepatitis C treatments.
But this year, Pennsylvania regulators launched a risk-sharing plan to help its Medicaid contractors withstand the crippling costs of hepatitis C drugs, which cure the disease but are so expensive that states and Medicaid plans have struggled with how to pay for them.
Officials at Health Partners, a tax-exempt organization owned by a group of Philadelphia hospitals, said Thursday that if the plan had been in place last year, its loss on hepatitis C drugs could have been cut in half, to $10 million - a big help in an industry that has very narrow profit margins.
"We are grateful to the state for creating a risk pool that goes a long way to balancing out the varying experiences levels of the Medicaid plans," Health Partners Plans chief executive William S. George said.
One popular drug has a list price of $84,000 for a 12-week treatment.
Pennsylvania's program, which also covers drugs for cystic fibrosis, has two components, said Leesa M. Allen, a deputy secretary in the Pennsylvania Department of Human Services.
Under the first part of the program, the state has agreed to assume a larger percentage of the drugs' cost than it did previously.
The second component rewards plans based on quality - determined by the success of treatments, which typically take three months and are complicated by the fact that many hepatitis C patients have other conditions that made it difficult for them to stay on course.
"If we are going to accept some of the risk for payment, we want the plans to be managing these folks in a way that gets them to the cure," Allen said.
Pennsylvania's approach is one of several being used by states to help plans in hepatitis C hot spots avoid serious financial strain, said Jeff Myers, chief executive of Medicaid Health Plans of America, a trade group in Washington.
In Health Partners' case, "it will result in additional money, but the key here is that they are not going to make money. It just means they are going to lose less," Myers said.
So far this year, Health Partners has paid for the treatment of 400 hepatitis C victims and has already spent about as much as it did in all of last year.
The total number of hepatitis C patients it had last year was about 500.
The Philadelphia region's biggest Medicaid contractor, Keystone First, a unit of Independence Blue Cross subsidiary AmeriHealth Caritas, on Thursday did not provide details on its exposure to hepatitis C drugs.
Alan Krigstein, Independence's chief financial officer, said in April that Independence spent $155 million on drugs to treat hepatitis C in 2015, up from $116 million in 2014.
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