Healthcare payer trends in 2021

By Christie Smith; Kristy McGowan

What do specialty practices need to know about the impact of reimbursement changes?
Black female doctor looks at iPad

New healthcare payer trends will impact specialty physician practices in 2021. What should they be on the lookout for? How can they optimize both their reimbursement and the quality of their patient care?

Drug exclusions and funneling to specialty pharmacies

Drug exclusions by the big three pharmacy benefit managers (PBMs) are one notable healthcare payer trend. Instead of making a drug non-formulary or non-preferred—meaning a member could still obtain that medication at a higher copay—they have excluded some drugs from being covered at all.

The three largest PBMs have each deployed this strategy to varying degrees. In the oncology space, the number of drugs on exclusions lists vary widely. Some PBMs instruct prescribers to use specific replacement medications for drugs on their inclusion lists. One PBM does not specify substitutions, only instructing they be filled at a specialty pharmacy. 

Exclusion lists are not limited to oncology but span many specialties. Xcenda's research has found 846 medications excluded from at least one of the three major PBM's formularies.

When providers have to send a drug out to a specialty pharmacy due to contracting issues, there may be a delay in access to that medication. Giving patients and their specialty physicians timely access to the medications deemed medically necessary ensures the best care.

Patient access and choice at risk

There's disparity in access to care depending on where patients live, how old they are, and numerous other factors. Some patients may face a more precarious situation than others, depending upon what the insurance company decides.

For example, Med Advantage Medicare plans can now require a cancer patient, who may not have a lot of time to waste on unsuccessful treatments, to first try a couple of less expensive drugs and only approve the drug originally recommended by the oncologist if they fail.

Payers are also adding new utilization policies for cost containment. Practices must go through third-party tools that require additional time to generate the authorization. These policies create another hurdle for physicians to treat patients with clinically appropriate drugs.

DIR fee changes

Another healthcare payer trend involves Direct and Indirect Remuneration fees (DIR). When providers adjudicate a claim, they can see upfront if the pharmacies are going to make a positive margin on that product. With DIR fees, a physician doesn't get charged when they dispense the drug. PBMs take back their fees later.

Some contracts we have seen allow for claw backs of up to 14 percent. This is incredibly challenging for specialty physicians, not only for their ability to plan for the future but also the lack of transparency when trying to breakdown specific charges. Providers primary focus is always patient need and clinical decision making yet providers can't determine if they are solvent on a particular product at the time they prescribe. High DIR fees can cause reimbursement to drop below what it costs dispensing providers to purchase the drugs in the first place.

Providers need education on DIR fees and how they are calculated, based on the contract. The process is not very intuitive, so analysts can help decipher it, allowing practices to better predict DIR fees.

Changes to reimbursement structure

Another new trend involves updates to the coding requirements for in-office visits, known as Evaluation/Management codes. These changed for the first time since 1995. If a specialty practice is not following the changes, they may experience a reduction in the amount of reimbursement received

Instead of increasing their reimbursement, payers tell the practice that they have increased the dollar amount on evaluation and management codes. The contracts tell a different story. They are not paying more. They're forcing the patients to pay the providers more. Adding more patient financial responsibility only compounds reimbursement problems, especially with so many patients unemployed and uninsured.

Predictions around telehealth reimbursement

The telehealth trend, which arose out of necessity from the COVID-19 pandemic, is likely to continue its growth. What began as something payers had to embrace during pandemic-related shutdowns has evolved into something more sustainable. Some payers have even mandated patients use their own panel of telehealth providers, which generates revenue streams. However, for patients to embrace telehealth further, they need to be able to see their own physician, rather than a stranger.

Ease of access is one of the attractions of telehealth. When the pandemic began, CMS relaxed the access guidelines. Conversations with physicians over Skype or FaceTime conversations will likely decline, as CMS mandates more secure, compliant platforms.

It's important for both healthcare payers and providers to acknowledge when a telehealth visit isn't appropriate. As a vital next step, the healthcare community needs to develop a standard of care for the use of telehealth. When telehealth is not an option, communities need a safe place to receive in-person care besides the emergency room.

Managing information and keeping the lines of communication open

To ensure patients get the right drugs at the right time and at the best reimbursement, practices need to stay abreast of policy changes. PBM changes, for example, must be posted within a certain period of time for public review before they are implemented. Some trends, such as drug exclusions, may be prohibited in certain states, so knowledge of state law is helpful. Practices should leverage their relationship with the medical plans of PBMs to potentially get better rates on the pharmacy side.

Xtelligent Healthcare Media found only four percent of providers had a lot of trust in private payer partners. The best way to build a rapport is to communicate with payers every quarter. Providers shouldn't only talk to payers when they are disappointed with their contract or the payer has implemented a new process. Ongoing conversations build trust.

Physician practices need to educate themselves on the latest healthcare payer trends. Supporting patient access and choice must remain top of mind.

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About the Authors

Christie Smith

Director, Payer Strategy
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Kristy McGowan

Senior Business Optimization Consultant
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