Nevada – The National Academy for State Health Policy

Nevada Enacts a Public Option

Governor Sisolak signed legislation last week that gives Nevada the authority to establish a public option that is intended to provide consumers with comprehensive, but lower cost health insurance. The second state to enact such a law (Washington was first in 2019), Nevada is tasked with creating state-designed coverage to be administered by private insurers that are required to reduce premiums by addressing high health care costs.

An Overview of the Basics

Nevada’s Senate Bill 420 directs the state’s Department of Health and Human Services (DHHS), the Division of Insurance (DOI), and the Silver State Health Insurance Exchange to design, establish, and operate a public option effective 2026.

The public option must meet criteria to be classified as a qualified health plan, which includes offering the essential health benefits and will be available to individuals and possibly to small employers and their employees. The public option will be sold through the state’s health insurance exchange and as a result must meet the silver and gold actuarial values (70 and 80 percent respectively).

Reference Based Premium is based on the lower of either:

the premiums for the second lowest priced silver level plan sold on the exchange during the prior year or
the premium for the second lowest cost silver plan sold on the exchange in 2024 and adjusted based on the Medicare Economic Index.

As one means to achieve affordability, until 2030, public option premiums in each zip code must be at least five percent lower than the reference premium for that zip code. In addition, the average public option premiums must be at least 15 percent lower than the average reference premium in the state. Lastly, premiums can’t increase by a percentage greater than the increase in the Medicare Economic Index (i.e., inflation) for that year.

To fund the public option, the law created the Public Option Trust Fund to be administered by the state treasurer. Important to the affordability of public option plans, the balance in the Public Option Trust Fund at the end of each fiscal year carries into the next fiscal year rather than reverting to State General Fund. As such, if the Treasurer deems that there are additional funds available for the fiscal year, these can be used to increase affordability of the plans (e.g., lower premiums). To start, the legislature appropriated $1,639,366 to the Public Option Trust Fund for use by June 2023, and appropriated relevant funds to DHHS and the Exchange.

The bill also directs DHHS, DOI, and the Exchange to apply for federal funding that may be available to help finance operation of the program (to be held in the Fund). Additionally, it directs the agencies to apply for any relevant federal waivers that may be necessary to implement the program, including 1115 demonstration and 1332 innovation waivers that can be used to secure federal insurance subsidies to purchase public option QHPs, as well as to combine the risk pools for the public option and Medicaid. The latter is contingent on analysis projecting that combining risk pools can lower costs. The law requires relevant agencies to apply for federal waivers by 2024 but to also conduct an actuarial study of the bill’s impact on premiums prior to applying.

Specifically, the legislature seeks to determine the impact of repealing one controversial component: requiring specific providers to participate in the public option networks.

Assuring Provider Participation

Nevada will conduct a statewide competitive bidding process for insurers to administer the public option and requires all managed care organizations contracted to deliver services for the state’s Children’s Health Insurance Program (CHIP) and Medicaid to submit a proposal.

The state aims to prioritize insurer applicants with networks that:

align the providers across the public option and state Medicaid program,
include rural and safety-net providers,
strengthen the primary care and behavioral health workforce (particularly in rural areas),
accept value-based payment models,
decrease disparities in access and outcomes and provide culturally competent care.

Ultimately, DHHS is authorized to administer the public option if these goals cannot be accomplished by contracting with a private insurer.

Similar to the requirement of insurers, every provider that participates in Medicaid, provides care for enrollees of the state employee health plan, or provides care to injured workers who receive workers compensation must enroll as a participating provider in at least one network of providers established in the public option.

Addressing Health Care Costs

Recent research indicates that commercial insurers reimburse hospitals, on average, 247 percent of what Medicare pays for the exact same services. With an interest to contain rising health costs, a growing number of states are exploring policies to lower commercial reimbursement rates to be more in line with Medicare’s cost-based rates. For example, Washington’s public option legislation capped reimbursement rates to providers at 160 percent of Medicare, with a minimum reimbursement of 101 percent to rural hospitals and 135 percent to primary care providers.

However, Nevada’s law doesn’t set a specific rate or reimbursement cap. Instead, the law includes a provision that, in the aggregate, reimbursements by the public option must be comparable to, or “better than,” those paid by Medicare. The lack of specificity leaves room for interpretation and debate among stakeholders that will likely need to be addressed through regulation.

The enactment of Nevada’s public option provides a pathway to leverage its state-based exchange to further reduce the state’s uninsured rate while addressing health care costs by targeting reimbursements on hospitals’ costs more so than on its charges. As the price of care continues to rise, and the federal government explores a possible federal public option, state action to address health care costs continues to create meaningful change and serves as a laboratory for nationwide policy. As additional states pursue such policies, NASHP will continue to update its tracker of state legislative action to lower health system costs.

Federal and State Special Enrollment Periods Increase Access to Insurance Coverage

February 1, 2021/in Policy California, Colorado, Connecticut, District Of Columbia, Idaho, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Washington Blogs, Featured News Home Eligibility and Enrollment, Health Coverage and Access, State Insurance Marketplaces /by Christina Cousart

What We’ve Learned from Early Adopters of Drug Price Transparency, and What We’ll Learn from the Next Wave

December 2, 2019/in Policy California, Maine, Nevada, Oregon, Vermont Blogs, Featured News Home Administrative Actions, Cost, Payment, and Delivery Reform, Health System Costs, Model Legislation, Newly-Enacted Laws, Prescription Drug Pricing, State Rx Legislative Action /by Jennifer Reck

As prescription drug price increases greatly outpace inflation and new specialty drugs priced in the millions of dollars enter the market, several states have led the way as early adopters of drug price transparency legislation and are taking the first steps to curb costs with the help of transparent drug pricing information.

Read NASHP’s new report, What Are We Learning from State Reporting on Drug Pricing?, to discover what early reports from California, Maine, Nevada, Oregon, and Vermont’s drug price transparency laws reveal.

A new National Academy for State Health Policy (NASHP) report, What Are We Learning from State Reporting on Drug Pricing?, offers a cross-state analysis of drug price transparency findings through August 2019, based on reports from California, Maine, Nevada, Oregon, and Vermont. States are:

Learning which drugs cost the most – and are the best targets for focused strategies;
Tracking the percentage of health premiums attributed to drug spending – and identifying opportunities to leverage reporting on drug spending, such as implementing spending caps; and
Beginning to capture information on net price – and profit – along the supply chain to inform fair and balanced policy approaches to ensure affordability.

Honing in on the Costliest Drugs to Take Action Where It Matters Most

States with transparency laws are identifying the drugs creating the greatest affordability challenges for both payers and consumers. State transparency laws require gathering data from a variety of sources, including through required reporting by public and private health plans (California, Oregon, Vermont), or through all-payer claims databases (Maine), or proprietary databases (Nevada), in order to report lists of:

The costliest drugs in the state based on price and utilization;
The drugs with the highest year-over-year cost growth; and
The most commonly prescribed drugs.

A cross-state analysis of these reports identified 30 drugs that appear in common across drugs reported in three of five states. Many of the drugs reported are used for the treatment of diabetes, including Humalog, Lantus Solar, Novolog, Januvia, Metformin, and Victoza. Multiple drugs for the treatment of arthritis were also identified across states: Stelara, Cosentyx, Enbrel, and Humira.

Identifying the classes of drugs – and specific drugs within those categories – that are creating the greatest affordability challenges can help states hone in on strategies to address drug costs. For example, states working to leverage their purchasing power across agencies are seeking this type of information to guide potential approaches such as bulk purchasing or establishing single preferred drug list. State officials from Nevada have credited their transparency law, initially limited to diabetes medications and since expanded to include asthma medications, with bringing payers to the table to leverage their purchasing power through Nevada’s Silver State Scripts program.

Illuminating the Link between Rising Drug and Insurance Premium Costs

Several states (California, Vermont, and Oregon) require commercial health plans subject to state regulation to submit information on the impact of prescription drug spending on premiums rates. Results shared publicly to date include a range of prescription drug spending accounting for, on average, 13 percent in California, 15.67 percent in Vermont, and up to 18 percent of premiums in Oregon. Tracking prescription drug spending, as part of rate review or other initiatives, represents an important leverage point for states to take action on drug spending. Doing so can enable, for example, monitoring and enforcement of prescription drug spending caps. Several states, including New York, Massachusetts, and Maine, have established caps for drug spending – New York and Massachusetts have the authority to negotiate supplemental rebates to meet their caps while Maine tasks its Drug Affordability Review Board with identifying strategies to meet its voluntary cap on drug spending for public plans.

Uncovering the Factors Driving Up Prices along the Drug Supply Chain

One of the questions at the heart of drug price transparency laws is: What factors are driving high price increases and high launch prices? The only way for a state to determine the actual causes of high drug prices – and the relative profit accrued by players in the supply chain – is by requiring reporting across the entire supply chain, including manufacturers, pharmacy benefit managers (PBMs), wholesalers, and health plans. In order to be meaningful, this information must shed light on the net cost of drugs – an otherwise closely guarded secret behind a black box of secret rebate negotiations between manufacturers and PBMs.

Some of the early adopter states, while laying the foundation for future transparency efforts, enacted laws with limitations in terms of their ability to shine a light on net prices or to uncover the interplay between players in the drug supply chain. California, for example, limits manufacturer reporting to information that is already in the public domain. While Nevada did require reporting of some information considered to be trade secrets, and required reporting by both manufacturers and PBMs, the lack of alignment in reporting requirements (e.g., state versus national level) makes it difficult to “follow the money” across the supply chain.

A new wave of tougher state transparency measures, including a 2019 Maine law, An Act To Further Expand Drug Price Transparency, will have the ability to shine a light on net drug prices – and profits – in order to guide fair and effective state policy solutions. The Maine law, based on NASHP’s model legislation, requires reporting by entities across the entire drug supply chain, including manufacturers, PBMs, wholesalers, and health plans.

Enforcement

In addition to establishing reporting requirements with the ability to produce meaningful, actionable data, states must also have the ability to enforce reporting their new requirements. Early efforts at collecting data from manufacturers have yielded imperfect compliance at best. California received data justifying price increase from only one-third of manufacturers required to report, and Nevada recently levied $17.4 million in fines on manufacturers for failure to report in that state. While non-reporters in Nevada face fines up to $5,000 a day, Maine’s new law increases that penalty to up to $30,000 a day.

Taking Action on What Transparency Reveals

As actionable information on net drug prices and profits across the supply chain becomes available, states will use the data to make informed, impactful policy decisions. Though state policymakers are challenged by a number of limits on their authority to regulate drug prices, and meaningful action at the federal level currently remains pending, states are advancing a number of policy options to address drug prices building on what transparency laws are revealing. One model is a state Drug Affordability Review Board (DARB) with the authority to review data on drugs deemed unaffordable, and if warranted, set an upper payment limit for that drug within the state. Transparency data is essential to DARBs and related efforts. Such approaches do not seek to prohibit profit along the supply chain, but to ensure that those profits are reasonably balanced with the need to preserve access to essential drugs by ensuring their affordability.

What Are We Learning from State Reporting on Drug Pricing?

December 2, 2019/in Policy California, Maine, Nevada, Oregon, Vermont Featured News Home, Reports Administrative Actions, Cost, Payment, and Delivery Reform, Health System Costs, Legal Resources, Model Legislation, Newly-Enacted Laws, Prescription Drug Pricing, State Rx Legislative Action /by Deborah Chollet, PhD, William Mulhern, JD and Jia Pu, MA, PhD, Mathematica

This report summarizes what states are learning from reporting required by prescription drug price transparency laws, which include reports on data submitted by health insurers, manufacturers, and pharmacy benefit managers (PBMs). The review period includes reports published by states through August 2019. The National Academy for State Health Policy’s Center for State Rx Drug Pricing, with support from Arnold Ventures, commissioned this analysis from experts affiliated with Mathematica.

Executive Summary

This report summarizes what states are learning from reporting required by prescription drug price transparency laws, including reports on data submitted by health insurers, manufacturers, and pharmacy benefit managers (PBMs). The review period includes reports published by states through August 2019.

Costliest Drugs across States

Five states — California, Nevada, Maine, Oregon and Vermont — have published reports identifying specific drugs that are high cost, for which costs are rising fastest, and/or that are most frequently prescribed. In Nevada, these drugs include only those related to the treatment of diabetes. California, Maine, Oregon, and Vermont reported up to 126 prescription drugs across therapeutic uses. These states reported many of the same drugs—including five drugs used for treatment of diabetes and four drugs used for treatment of psoriasis, psoriatic arthritis, or rheumatoid arthritis.

Impact on Premiums

California, Vermont, and Oregon have reported impacts of retail prescription drug costs on insurance premiums, averaging 13 percent in California (before accounting for manufacturer rebates, which averaged 10.1 percent of insurers’ retail drug costs) in 2017, 15.67 percent of premiums in Vermont in 2018 (before accounting for rebates), and up to 18 percent of premiums in Oregon (after accounting for rebates) in 2018.

Manufacturer and PBM Reporting

Requiring both manufacturers and PBMs to report allows states to track drug pricing along the supply chain. As of August 2019, only Nevada had publicly reported information about manufacturer and PBM costs, focused on essential diabetes drugs. Nevada’s report indicates that:

Production costs accounted for 29 percent of manufacturers’ estimated average revenue in 2018 for essential diabetes drugs after rebates. Administrative costs and profit each accounted for 25 percent. On average, manufacturers earned $42 in profits for every $100 spent on production and administrative cost for these drugs.
Financial assistance to consumers accounted for 14 percent of the manufacturers’ estimated total revenues after rebates, although most manufacturers reported offering no financial assistance.
Most of the rebates that PBMs in Nevada negotiated nationally for essential diabetes drugs were on behalf of private insurers and self-insured employer plans. PBMs retained 6.6 percent of all rebates, whether negotiated on behalf of private third parties or Medicaid.

Early Lessons

The information these states have made public suggests some early lessons:

States share concerns about the affordability of many of the same drugs. There may be substantial value in sharing information across states with similar confidentiality protections while reducing the burden of redundant reporting to multiple states.
Understanding pricing across the entire supply chain, from the manufacturer to the consumer, is critical. Reporting that uses consistent concepts and measures can foster mutual understanding of facts among policymakers and stakeholders in a complex system.
The agency responsible for obtaining data must have the authority and resources to follow up when the data are not complete or credible, if drug transparency laws are to help states develop a fair approach to ensuring that prescription drugs are affordable.

Introduction

This report summarizes what states are learning from reporting required by prescription drug price transparency laws, including data reported by health insurers, manufacturers, and pharmacy benefit managers (PBMs). Since 2017, nine states have enacted drug price transparency legislation that requires such reporting.[1]

Five of these states — California, Nevada, Maine, Oregon, and Vermont — have published reports identifying specific drugs that are high cost (defined by total spending), for which costs are rising fastest (defined as year over year increase), and/or that are most frequently prescribed (so represent high consumer exposure).[2] In Nevada, these drugs include only those related to treatment of diabetes. California, Maine, Oregon, and Vermont included prescription drugs across all therapeutic classes. In Section 1, we present the drugs of interest that these states reported and look, in particular, at the 30 drugs of interest reported by at least three of these states.

In Section 2, we describe the impact of drug prices on health insurance premiums, as reported by three states, California, Oregon, and Vermont. These states have published the dollar amounts and/or the percentage of premiums attributed to retail prescription drugs — in California and Vermont, before manufacturer and other rebates and price discounts to insurers; and in Oregon, after rebates and price discounts.

In Section 3, we describe what Nevada is learning from the reporting required of manufacturers and PBMs. Currently, eight states have enacted laws requiring PBMs to report rebate amounts either for specific drugs or in the aggregate. These laws have taken effect in four states (Connecticut, Nevada, Texas, and Washington) as part of each state’s drug pricing transparency effort, but as of August 2019, only Nevada (for specified essential diabetes drugs) had made summary information public.

Reporting of High-Cost, High Cost-Growth, and Most Prescribed Drugs

California, Maine, Nevada, Oregon, and Vermont have reported drugs that account for high total cost or high cost growth, or because they are frequently prescribed, represent high consumer exposure. Maine derived its lists from analysis of the state’s all-payer claims database (APCD) system; California and Oregon relied on insurer reporting under special statutory authority; and Vermont relied on both insurer and Medicaid reporting. Nevada derived it list of drugs from analysis of a purchased database.

Table 1 lists the number of unique drug names reported in each state. California and Vermont reported the most extensive list of drugs: each reported on more than 120 unique drug names; Nevada, Maine, and Oregon each reported on approximately 50 unique drug names.

Table 1. Number of drugs listed in state public reports, by state

Reporting state	Reference period	Number of unique drug names reported*
CA	CY2017	126
ME	FY2018	51
NV	CY2018	53
OR	CY2018	56
VT	CY2018	121

*The number of unique drugs was developed by merging separate lists of drugs, if the state reported separate lists by reason for reporting and/or by insurer.

Source: Mathematica analysis of data reported in these reports: California Department of Managed Health Care (2018); Maine Health Data Organization (2018); Nevada Department of Health and Human Services (2018b); Oregon Department of Consumer and Business Services (2019); and State of Vermont Green Mountain Care Board (2019). See full references at the end of this report.

We matched drugs reported across these states by National Drug Code (NDC) and identified 128 unique NDCs that at least two states selected in common (shown in Appendix 1). The 30 drugs that at least three states selected in common are shown in Table 2.

These 30 drugs span multiple therapeutic classes, but several have similar therapeutic uses. Eight of the drugs are used for treatment of diabetes myelitis — including five drugs, Lantus Solostar, Novolog, Januvia, Metformin, and Victoza, which four of the five states reported in common.

At least three of the four states that did not focus only on essential diabetes drugs — California, Maine, Oregon, and Vermont — selected in common a number of additional drugs that clustered around treatment for asthma (Fluticasone Prop, Ventolin, Proair, and Symbicort); depression (Bupropion Hcl and Sertraline); hepatitis C (Harvoni and Epclusa); multiple sclerosis (Copaxone and Tecfidera); psoriasis, psoriatic arthritis, and/or rheumatoid arthritis (Stelara, Cosentyx, Enbrel, Humira Syringe, and Humira Pen); and a range of cardiovascular concerns (Eliquis, Xarelto, Hydrochlorothiazide, Atorvastatin).

Table 2. Drugs reported by three or more states, 2017-2018 (in alphabetic order of primary therapeutic use)

NDC	Drug name	States	Therapeutic class	Primary therapeutic use	Reasons for reporting
00054327099	Fluticasone Prop	CA, ME, VT	Respiratory tract agents	Treatment of allergic and non-allergic nasal symptoms; long term management of asthma, COPD	Most frequently prescribed (CA, ME, VT)
00173068220	Ventolin	CA, ME, OR, VT	Autonomic drugs; respiratory tract agents	Treatment of asthma, acute bronchitis	Most costly (CA); highest cost increase (CA); most frequently prescribed (CA, ME, OR, VT)
59310057922	Proair	CA, ME, OR, VT	Beta-Adrenergic agents	Treatment of asthma, acute bronchitis	Most frequently prescribed (CA, ME, OR, VT)
00186037020	Symbicort	CA, ME, VT	Antiasthmatic and bronchodilator agents	Treatment of asthma, chronic obstructive pulmonary disease (COPD)	Most frequently prescribed (ME); most costly (ME, CA); highest price (VT)
00003089421	Eliquis	CA, ME, OR	Blood formation, coagulation, and thrombosis agents	Prevention of blood clots/stroke in people with atrial fibrillation.	Most frequently prescribed (ME); highest price increase (CA, ME); most costly (CA, ME)
50458057930	Xarelto	CA, ME, VT	Anticoagulants, coumarin type	Treatment/prevention of blood clots	Most costly (CA, ME); highest cost increase (CA, ME, VT)
50111078751	Azithromycin	CA, ME, OR	Antibacterials	Treatment of bronchitis; pneumonia, sexually transmitted diseases, and infections of the ears, lungs, sinuses, skin, throat, and reproductive organs.	Most frequently prescribed (CA, ME, VT)
45963014205	Bupropion Hcl	CA, VT, OR	Antidepressants	Treatment of depression	Most frequently prescribed (VT); most costly (CA); highest price increase (CA)
68180035302	Sertraline	CA, ME, OR, VT	Antidepressants	Treatment of depression, obsessive-compulsive disorder (OCD), posttraumatic stress disorder (PTSD), premenstrual dysphoric disorder (PMDD), social anxiety disorder, panic disorder	Most frequently prescribed (CA, ME, OR, VT)
00002771559	Basaglar (Kwikpen)	ME, NV, OR	Hormones and synthetic substitutes	Treatment of diabetes myelitis type 1 and 2	Highest price increase (ME, NV)
00002879959	Humalog (Kwikpen)	ME, NV, OR	Hormones and synthetic substitutes	Treatment of diabetes myelitis type 1	Most costly (CA, ME); highest price increase (CA, ME, NV); most frequently prescribed (CA)
00002751001	Humalog	CA, ME, NV, OR	Hormones and synthetic substitutes	Treatment of diabetes myelitis type 1	Most costly (CA, ME, OR); most frequently prescribed (CA); highest price increase (CA, ME, NV)
00088221905	Lantus Solostar	CA, ME, NV, VT	Hormones and synthetic substitutes	Treatment of diabetes myelitis type 1 and 2	Most costly (CA, ME); highest price (VT); Most commonly prescribed (ME, VT); highest cost increase (NV)
00169633910	Novolog	NV, ME, OR, VT	Hormones and synthetic substitutes	Treatment of diabetes myelitis type 1 and 2	Most costly (ME); highest price (OR, VT); highest cost increase (NV); most frequently prescribed (CA)
00006027731	Januvia	CA, ME, NV, VT	Blood glucose regulators	Treatment of diabetes myelitis type 2	Most costly (CA, ME); highest cost increase (CA, ME, VT); most commonly prescribed (CA)
Multiple NDCs	Metformin	CA, NV, OR, VT	Blood glucose regulators	Treatment of diabetes myelitis type 2	Most frequently prescribed (CA, OR); highest cost increase (NV, VT); most costly (CA)
00169406013	Victoza	CA. ME, NV, VT	Hormones and synthetic substitutes	Treatment of diabetes myelitis type 2	Most costly (CA, ME); highest cost increase (CA, NV); most frequently prescribed (CA); highest price (VT)
61958180101	Harvoni	CA, ME, VT	Anti-infective agents	Treatment of hepatitis C	Most costly (CA, ME); highest cost increase (CA); highest price (VT)
61958220101	Epclusa	CA, ME, OR, VT	Antivirals	Treatment of hepatitis C	Most costly (CA, ME); highest price (OR, VT); highest cost increase (CA)
16729018317	Hydrochlorothiazide	CA, ME, OR, VT	Diuretics	Treatment of high blood pressure, edema, kidney stones	Most frequently prescribed (CA, ME, OR, VT)
60505258009	Atorvastatin	CA, ME, OR, VT	Antihyperlipidemics	Treatment of high cholesterol and triglyceride levels	Most frequently prescribed (CA, ME, OR, VT); most costly (CA); highest cost increase (CA)
61958200201	Descovy	CA, ME, VT	Antivirals	Treatment of HIV-1	Most costly (CA); highest cost increase (CA, ME, VT); most frequently prescribed (CA)
68546032512	Copaxone	CA, ME, OR, VT	Miscellaneous therapeutic agents	Treatment of multiple sclerosis	Most costly (CA, ME); highest cost increase (CA); highest price (OR, VT)
64406000602	Tecfidera	CA, ME, OR, VT	Psychotherapeutic and neurological agents – misc.	Treatment of multiple sclerosis	Most costly (CA, ME, OR); highest cost increase (CA); highest price (VT)
57894006103	Stelara	CA, ME, VT	Immunological agents	Treatment of plaque psoriasis, psoriatic arthritis	Most costly (CA, ME); highest cost increase (CA, ME, VT); highest price (VT); most frequently prescribed (OR)
Multiple NDCs	Cosentyx	CA, ME, OR, VT	Immunological agents	Treatment of plaque psoriasis, psoriatic arthritis, ankylosing spondylitis	Highest price (VT); most costly (CA); highest cost increase (CA, ME, OR); most frequently prescribed (OR)
58406044504	Enbrel	CA, ME, OR, VT	Miscellaneous therapeutic agents	Treatment of plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, juvenile idiopathic arthritis	Most costly (ME, CA); highest cost increase (CA, OR, VT); most frequently prescribed (CA, OR); highest cost (VT)
00074379902	Humira (Syringe)	CA, ME, OR, VT	Gastrointestinal drugs; miscellaneous therapeutic agents	Treatment of rheumatoid arthritis, plaque psoriasis, ankylosing spondylitis, Crohn’s disease, ulcerative colitis	Most costly (CA, ME, OR); highest price (VT); highest cost increase (CA, OR, VT); most frequently prescribed (CA)
00074433902	Humira (Pen)	CA, ME, OR, VT	Gastrointestinal drugs; miscellaneous therapeutic agents	Treatment of rheumatoid arthritis, plaque psoriasis, ankylosing spondylitis, Crohn’s disease, ulcerative colitis	Most costly (CA, ME, OR); highest price (VT); highest cost increase (CA, OR, VT); most frequently prescribed (CA)
69097081412	Gabapentin	CA, ME, OR, VT	Anticonvulsants	Treatment/prevention of seizures, pain	Most frequently prescribed (CA, ME, OR, VT); highest expenditure (CA)

Source: Mathematica analysis of drug website data and data reported in: California Department of Managed Health Care (2018); Maine Health Data Organization (2018); Nevada Department of Health and Human Services (2018b); Oregon Department of Consumer and Business Services (2019); and State of Vermont Green Mountain Care Board (2019).

Impact on Insurance Premiums

Three states — California, Oregon, and Vermont — have reported impacts of rising drug prices on insurance premiums. California[3] reported that insurer payments for retail prescription drugs totaled $8.7 billion in 2017, accounting for 13.1 percent of health plan premiums that year. Specialty drugs accounted for a small minority of prescriptions (1.6 percent), but more than half (51.5 percent) of all insurer spending on retail prescription drugs.

Manufacturer rebates and consumer cost sharing lessened the impact of retail prescription drugs on premiums in California, compared to what it might otherwise have been. Manufacturer rebates to insurers equaled about 10.5 percent ($915 million) of the $8.7 billion insurers spent on retail prescription drugs. Among the 25 most frequently prescribed drugs (representing 42.8 percent of total spending on retail prescription drugs), health plan enrollees paid approximately 3 percent of the cost overall — ranging from 2.9 percent of the cost of specialty drugs to 56.6 percent of the cost of generics. Enrollees paid about 8.8 percent of the cost of the 25 most costly drugs (91.2 percent of total spending on retail prescription drugs) reported by insurers.

Vermont [4] reported that prescription drugs accounted for 15.67 percent of premium rates in 2018 (before accounting for manufacturer rebates and other price concessions). Expressed as a per member per month (PMPM) amount, that averaged $81.65 PMPM in 2018. Vermont also identified the three drugs contributing the most to premiums: Humira Pen, Harvoni, and Enbrel Sureclick. Specialty drugs as a category contributed most to premium increases, compared with generic or brand name drugs.

Oregon[5] reported the impact of prescription drugs on premium rates PMPM in 2018 after accounting for manufacturer rebates or other price concessions to insurers. Insurers reported impacts that ranged from a low of 2.5 percent of premiums ($13 PMPM, or about $154 per member annually, for one insurer’s small-group plans) to 18 percent of premiums (about $85 PMPM, or more than or $1,000 per member annually, for two insurers’ small group plans, respectively. At the median, prescription drugs accounted for 11.9 percent of the premiums — nearly $53 PMPM in 2018, or about $635 annually.

Manufacturer and PBM Reporting

At present, five states — Nevada, Connecticut, Maine, Texas, and Washington — have enacted laws that require both manufacturers and PBMs to report annually. Manufacturers are required to report information on specified drugs. PBMs are required to report information about the rebates they have obtained from manufacturers — either in the aggregate (for all drugs) or for specified drugs. Requiring both manufacturers and PBMs to report offers the potential for states to track pricing along the supply chain for drugs of interest, if the state aligns the level of information that each must report.

The drug cost transparency reporting requirements in these states are shown in Table 3. Washington will require PBMs to report information for each covered drug—a provision that will enable the Washington Health Care Authority to track prices across the supply chain for each drug.[6] Nevada requests PBM reporting on essential diabetes drugs (collectively), as specifically identified by the Nevada Department of Health and Human Services. Connecticut and Texas will require PBMs to report aggregate rebates obtained across all drugs from pharmaceutical manufacturers. In Maine, the Maine Health Data Organization will adopt rules specifying the data elements to be reported.

Table 3. States that require reporting by both manufacturers and PBMs^*

State	Manufacturers must report:**	PBMs must report:
Connecticut	· Total company level research and development costs for the most recent year	· The aggregate dollar amount for all rebates concerning drug formularies that PBM collected from pharmaceutical manufacturers, Including those that manufactured outpatient prescription drugs covered by the health carriers and are attributable to patient utilization of such drugs under the health care plan · The aggregate dollar amount of all rebates excluding rebates received by health carriers
Nevada	· Total administrative expenditures (including marketing and advertising costs) · Profit earned and percentage of total profit attributable to the drug · Total amount of financial assistance provided through patient assistance · Cost associated with coupons · Wholesale acquisition cost · History of any increase over the 5 years including percentage increase, date of increase, and explanation · Aggregate amount of all rebates provided to PBM’s	· Total (aggregate) amount of rebates negotiated with manufacturers during the previous year · Total amount of rebates retained by the PBM · Total amount of rebates negotiated for purchases of drugs for use by Medicare and Medicaid recipients, and persons covered by third parties that are or are not governmental entities
Texas	· Total company level research and development costs for the previous calendar year	· Aggregated rebates, fees, price concessions, and other payments from manufacturers · Aggregated dollar amount of rebates, fees, price concessions from manufacturers that were (a) passed to insurers, (b) passed to enrollees at point of sale; and (c) retained by the PBM
Washington	· Annual manufacturing costs · Annual marketing and advertising costs · Total research and development costs · Total costs of clinical trials and regulation · Total costs for acquisition of the drug · Total financial assistance given by the manufacturer through assistance programs, rebates, and coupons	· All discounts (total dollar amount and percentage discount) and all rebates received from manufacturers for each drug on the PBM’s formularies · Total dollar amount of discounts and rebates that are retained by the PBM for each drug · Actual total reimbursement amounts for each drug the PBM pays retail pharmacies after all fees · Negotiated price health plan pays PBM for each drug · Amount, terms, and conditions relating to copayments, reimbursement policies, etc. · Disclosure of any ownership interest the PBM has in a pharmacy or health plan with which it conducts business

Sources: Connecticut HB 5384/Public Act 18-41(2018); Nevada Department of Health and Human Services (2018a); Texas HB 2536 (2019); and Washington HB 1224, Chapter 334 (2019).

^*Maine also requires reporting from manufacturers and PBMs. The Maine Health Data Organization will adopt rules specifying the data elements to be reported.

^** In addition to the items indicated, each state requires manufacturers to report reasons for price increases, if any.

As of August 2019, Nevada was the only state that had publicly reported information about manufacturer costs and the role of PBMs in the final cost of drugs to consumers that are privately insured or enrolled in Medicare or Medicare.[7] Together with manufacturer reporting, reporting by PBMs offers a reasonably complete (if aggregated) picture of factors that contribute to essential diabetes drug costs in Nevada.

Nevada asks both manufacturers and PBMs to report pricing information for essential diabetes drugs in the aggregate and, in general, at the national level. Manufacturers report only one item specific to Nevada: rebates paid to PBMs for essential diabetes drugs in Nevada.

A summary of the information reported by manufacturers and PBMs, as shown in Nevada’s public report, is shown in Table 4. Because Nevada reported PBM-negotiated rebates for essential diabetes drugs ($1.9 billion) at the aggregate national level and manufacturer rebates only in Nevada and as the average aggregated across manufacturers, they cannot be compared. Such discrepancies make it impossible to track the supply chain for these drugs nationally or in Nevada. Nevertheless, some insights can be drawn within the information reported by manufacturers and PBMs, respectively.

Table 4. Summary of data reported by manufacturers and PBMs in Nevada for essential diabetes drugs

	Average amount per manufacturer (simple averages)	Percent of estimated average manufacturer revenue after rebates
*Manufacturer-reported data for essential diabetes drugs*
Estimated total revenue after rebates (national)^*	$204,353,658	100.0 percent
Production cost	$58,934,388	28.8 percent
Administrative expenses	$65,548,748	32.1 percent
Profit	$51,979,630	25.4 percent
Cost of consumer financial assistance	$27,890,892	13.6 percent
Total provided through any patient prescription assistance program	$12,874,326	6.3 percent
Consumer coupons and consumer copayment assistance programs	$14,036,828	6.9 percent
Manufacturer cost of redeeming coupons and use of consumer copayment assistance programs	$979,738	0.5 percent
Aggregate rebates to PBMs in Nevada	$3,039,646	1.5 percent
	Total amount (all PBMs)	Percent of PBMs’ total negotiated rebates
*PBM-reported data for essential diabetes drugs (Nevada only):*
Total rebates negotiated with manufacturers	$1,922,857,158	100.0 percent
Total rebates negotiated for persons covered by
Medicaid	$31,648,939	1.6 percent
3rd party governmental entities, not Medicare or Medicaid	$597,759,023	31.1 percent
3rd parties that are not governmental entities (potentially including self-insured employer plans)	$1,293,449,196	67.3 percent
Total rebates retained by the PBM	$126,754,864	6.6 percent

Source: S. Jones, et al. (2019), Tables 4, 5 and 6.

*Calculated as the sum of all shown manufacturer-reported amounts excluding aggregate rebates to PBMs in Nevada.

Manufacturer cost, profit, and consumer assistance

In 2018, average manufacturer costs and profits for essential diabetes drugs, reported at the national level, totaled nearly $204.4 million (Figure 1). Drug production costs accounted for just 29 percent of the total ($58.9 million).

Figure 1. Reported profits and production and administrative costs for essential diabetes drugs (Nevada)

Source: S. Jones, et al. (2019), Tables 4 and 5.

Manufacturers’ administrative expenditures, which may include executive compensation, accounting and legal fees, marketing, advertising, and other administrative expenses as each manufacturer deems reasonable, accounted for $65.5 million. This amount exceeded their reported average production costs (although the Nevada report indicates multiple drug manufacturers reported $0 for total administrative expenditures, and likely included all their costs for manufacturing the drug in the drug production costs).

Manufacturers reported average profits (nearly $52.0 million) — equal to 25.4 percent of the sum of production cost, administrative cost, consumer assistance, and profit — or 41.8 percent of total production and administrative cost. That is, aggregated across reporting manufacturers, manufacturers of essential diabetes drugs earned $42 in profits for every $100 they spent on production and administrative cost.[8]

Nationally, financial assistance to consumers accounted for an estimated 13.6 percent ($27.9 million) of manufacturers’ estimated average total revenues after rebates for essential diabetes drugs. This financial assistance included patient prescription programs, coupons, or copayment assistance programs. However, more than half of the reporting manufacturers indicated that they provided no financial assistance through patient prescription assistance programs (58 percent), and also provided no rebates to PBMs or pharmacies (55 percent). By inference, the average dollar amount of financial assistance among manufacturers that provided any financial assistance (presumably the larger manufacturers) was more than twice the average across all manufacturers (including those that provided none).

PBM negotiated and retained rebates

PBMs reported negotiating more than $1.9 billion in rebates for essential diabetes drugs for Nevadans (Table 4). Nearly this entire amount was negotiated on behalf of private third parties—predominantly private insurers and self-insured employer plans ($1.3 billion) or other nongovernmental third parties ($598 million). PBMs reported retaining 6.6 percent of all rebates that they negotiated, whether on behalf of private third parties or Medicaid.

Differences in how Nevada’s public report summarized the data obtained from manufacturers and PBMs make it impossible to develop a picture of the supply chain from the information offered—although it seems likely that Nevada has the information necessary to do this. Nevada’s report demonstrates the crucial importance of requiring manufacturers and PBMs to report information at the same level of aggregation—at the state level or nationally (but not either/or), and for the same individual drugs or narrowly specified groups of drugs—in order to build a coherent picture of the factors that contribute to high consumer cost.

Summary

This report summarizes information that five states—California, Maine, Nevada, Oregon, and Vermont—have obtained from insurers, manufacturers, and/or PBMs to achieve greater drug price transparency. Each of these states is in a relatively early stage of obtaining and understanding their data. Nevertheless, the information they have made public suggests some early lessons for states interested in obtaining meaningful reporting for drug price transparency.

States share concerns regarding the affordability of many of the same drugs. We identified 120 drugs that concern at least two of the five states—due to high cost, fast-rising cost, and/or the frequency with which the drug is prescribed. The large number of drugs that are of concern across states indicates that there might be substantial value in sharing information across states. State efforts such as Maryland’s recently enacted Drug Affordability Review Board might initially focus on many of these same drugs.[9] States that are developing statutory authority to require manufacturer reporting for these drugs might consider explicitly authorizing data sharing with other states that have compatible confidentiality protections—or else explore other options available in current law or regulation to reduce manufacturers’ burden of redundant reporting to multiple states.
There is substantial value in understanding pricing across the entire supply chain, from the manufacturer to the consumer, for drugs that drive increases in health insurance premiums and consumer costs. States that design reporting templates using consistent and compatible concepts and measures, and report those measures publicly, can foster mutual understanding of facts among policymakers and stakeholders in a complex system. However, if rebates and other information are reported collectively for all drugs, it frustrates the ability of policymakers to understand impacts on costs for specific drugs. PBM reporting by manufacturer/product code (if not by NDC) is critical to understanding the supply chain for the specific drugs of interest to the states. Nevada’s PBM reporting requirement — for a list of specified NDCs—demonstrates that PBMs are able to report on specific drugs, not only on their aggregate business.[10]
When requiring manufacturers, PBMs, or other entities to report drug price data, it is critical that the responsible agency be given the authority and resources necessary to follow up when reported data are not complete or credible. Especially in the first years of implementation, the reporting entities may be learning how to report, and they may be reluctant to invest in getting the data right. Accurate reporting is essential for drug transparency laws to help states develop a fair approach to ensuring that prescription drugs are affordable.

References and Appendix

Arkansas

Arkansas SB 520/Act No. 994, 2019. Available at: http://www.arkleg.state.ar.us/assembly/2019/2019R/Acts/Act994.pdf. Accessed August 1, 2019.

California:

California Department of Managed Health Care. “Prescription Drug Cost Transparency Report (SB 17): Measurement Year 2017.” Sacramento, CA: Department of Managed Health Care, December 2018. Available at https://www.dmhc.ca.gov/Portals/0/Docs/DO/sb17.pdf. Accessed July 31, 2019.

California Office of Statewide Health Planning and Development. “Cost Transparency: Prescription Drugs (CTRx),” 2019. Available at https://oshpd.ca.gov/data-and-reports/cost-transparency/rx/. Accessed July 31, 2019.

Connecticut:

State of Connecticut, Substitute House Bill No. 5384/Public Act No. 18-41. Available at https://www.cga.ct.gov/2018/ACT/pa/pdf/2018PA-00041-R00HB-05384-PA.pdf. Accessed July 31, 2019.

Iowa:

Iowa SF 563, 2019. Available at: https://www.legis.iowa.gov/legislation/BillBook?ga= 88&ba=SF percent20563. Accessed August 1, 2019.

Louisiana:

Louisiana SB 283/Act No. 371, 2018. Available at: https://legiscan.com/LA/text/SB283/id/1799999/Louisiana-2018-SB283-Chaptered.pdf. Accessed August 1, 2019.

Maine:

Maine Health Data Organization. “MHDO Prescription Drug Reports,” June 2018. Available at https://mhdo.maine.gov/tableau/prescriptionReports.cshtml. Accessed July 31, 2019.

Minnesota:

Minnesota SF 278, 2019. Available at: https://www.revisor.mn.gov/bills/bill.php?b=senate&f=SF0278&ssn=0&y=2019. Accessed August 1, 2019.

Nevada:

Nevada Department of Health and Human Services, SB539 Reporting Timeline v08.10.2018, August 10, 2018a. Available at: http://dhhs.nv.gov/uploadedFiles/dhhsnvgov/content/HCPWD/SB539 percent20Drug percent20Transparency percent20Reporting percent20Timeline_v08.10.2018_website.pdf. Accessed July 31, 2019.

Nevada Department of Health and Human Services. “Essential Diabetes Drugs Price Increase Report.” Carson City, NV: Division of Public and Behavioral Health, Primary Care Office. September 2018. Available at http://dhhs.nv.gov/uploadedFiles/dhhsnvgov/content/HCPWD/09.11.2018 percent20Nevada percent20Essential percent20Diabetes percent20Drugs percent20Price percent20Increase percent20Report_Final.pdf. Accessed July 31. 2019.

Jones, S., P. Thompson, J. Tucker, H. Mitchell, T. McKnight, H. Wallace, and K. Devine. “Drug Transparency Report 2019 Essential Diabetes Drugs” Carson City, NV: Nevada Department of Health and Human Services, Division of Public and Behavioral Health, May 2019. Available at http://dhhs.nv.gov/uploadedFiles/dhhsnvgov/content/HCPWD/DHHS percent202019 percent20Drug percent20Transparency percent20Report percent205-31-2019(1).pdf. Accessed July 31, 2019.

Oregon:

Oregon Department of Consumer and Business Services. “Insurer Reports on Prescription Drugs Drug Price Transparency Program,” 2019. Available at https://dfr.oregon.gov/drugtransparency/data/Documents/insurer-reports-rx-drugs-2019.pdf. Accessed October 16, 2019.

Texas:

Texas HB 2536, 86th Legislature, 2019-2020. Available at: https://legiscan.com/TX/text/HB2536/id/2027782/Texas-2019-HB2536-Enrolled.html. Accessed July 31, 2019.

Vermont:

Office of the Vermont Attorney General. “Prescription Drug Cost Transparency-Manufacturer and Health Insurer Annual Reporting” (undated). https://ago.vermont.gov/drug-price-transparency-manufacturer-and-health-insurer-annual-reporting/. Accessed July 31, 2019.

State of Vermont Green Mountain Care Board. “Impact of Prescription Drug Costs on Health Insurance Premiums.” Montpelier, VT: State of Vermont Green Mountain Care Board, January 2019. Available at https://legislature.vermont.gov/assets/Legislative-Reports/Act-193-Report-Impact-of-Prescription-Drug-Costs-on-Health-Insurance-Premiums.pdf. Accessed July 31, 2019.

Washington:

Washington HB 1224/Chapter 334, 2019. Available at: http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/House percent20Passed percent20Legislature/1224-S2.PL.pdf

Appendix 1: Drugs reported by two or more states: California, Maine, Nevada, Oregon, and Vermont

NDC	Drug	States	Therapy Class
00173069600	Advair (Diskus)	CA, ME	Respiratory Tract Agents
Multiple NDCs	Amlodipine Besylate	CA, OR	Antihypertensives
Multiple NDCs	Amoxicillin	CA, OR	Antibacterials
60505258009	Atorvastatin	CA, ME, OR, VT,	Antihyperlipidemics
60505257909	Atorvastatin	CA, OR, VT,	Antihyperlipidemics
50111078766	Azithromycin	CA, VT	Antibacterials
50111078751	Azithromycin	CA, ME, OR	Antibacterials
00002771559	Basaglar (Kwikpen)	ME, NV, OR	Hormones and Synthetic Substitutes
00173085910	Breo Ellipta	CA, ME	Respiratory Tract Agents
45963014205	Bupropion Hcl	CA, OR, VT,	Antidepressants
10370010150	Bupropion Hcl	CA, OR, VT,	Antidepressants
00069046903	Chantix	CA, VT	Antidotes, Deterrents, and Toxicological Agents
00069047103	Chantix	CA, VT	Antidotes, Deterrents, and Toxicological Agents
68546032512	Copaxone	CA, ME, OR, VT,	Miscellaneous Therapeutic Agents; Miscellaneous Therapeutic Agents (Platelet-Aggregation Inhibitors)
	Cosentyx	CA, ME, OR, VT,	Immunological Agents
61958200201	Descovy	CA, ME, VT	Antivirals
00024591401	Dupixent	ME, OR	Immunological Agents
00003089421	Eliquis	CA, ME, OR	Blood Formation, Coagulation, and Thrombosis Agents
58406044504	Enbrel	CA, ,ME, ,OR, VT	Miscellaneous Therapeutic Agents; Miscellaneous Therapeutic Agents (Platelet-Aggregation Inhibitors)
61958220101	Epclusa	CA, ME, OR, VT,	Antivirals
00173071920	Flovent	CA, VT	Corticosteroids
Multiple NDCs	Fluoxetine	CA, OR	Antidepressants
00054327099	Fluticasone Prop	CA, ME, VT	Respiratory Tract Agents
60505082901	Fluticasone Prop	CA, VT	Respiratory Tract Agents
69097081412	Gabapentin	CA, ME, OR, VT,	Anticonvulsants
61958190101	Genvoya	CA, OR	Antivirals
00078060715	Gilenya	CA, VT	Immunological Agents
68084011201	Glipizide ER	CA, NV	Blood Glucose Regulators
68084029521	Glipizide ER	CA, NV	Blood Glucose Regulators
68084011101	Glipizide ER	CA, NV	Blood Glucose Regulators
61958180101	Harvoni	CA, ME, VT	Anti-infective Agents
00002879959	Humalog (Kwikpen)	ME, NV, OR	Hormones and Synthetic Substitutes
00002751001	Humalog	CA, ME, OR	Hormones and Synthetic Substitutes
00074433902	Humira (Pen)	CA, ME, OR, VT,	Gastrointestinal Drugs; Miscellaneous Therapeutic Agents; Miscellaneous Therapeutic Agents (Platelet-Aggregation Inhibitors)
00074379902	Humira (Syringe)	CA, ME, OR, VT,	Gastrointestinal Drugs; Miscellaneous Therapeutic Agents; Miscellaneous Therapeutic Agents (Platelet-Aggregation Inhibitors)
00002880559	Humulin N	CA, NV	Blood Glucose Regulators
00002831501	Humulin N	CA, NV	Blood Glucose Regulators
00002831517	Humulin N	CA, NV	Blood Glucose Regulators
00002821501	Humulin R	CA, NV	Blood Glucose Regulators
00002821517	Humulin R	CA, NV	Blood Glucose Regulators
00002882427	Humulin R U-500 KwikPen	CA, NV	Blood Glucose Regulators
00002850101	Humulin R U-500	CA, NV	Blood Glucose Regulators
16729018317	Hydrochlorothiazide	CA, ME, OR, VT,	Diuretics
00406012301	Hydrocodone/Acetaminophen	ME, OR, VT,	Analgesics – Opioid
00069018921	Ibrance	CA, VT	Antineoplastics
50458014030	Invokana	CA, NV	Blood Glucose Regulators
50458014090	Invokana	CA, NV	Blood Glucose Regulators
50458014130	Invokana	CA, NV	Blood Glucose Regulators
50458014190	Invokana	CA, NV	Blood Glucose Regulators
00006057761	Janumet	CA, NV	Blood Glucose Regulators
00006057762	Janumet	CA, NV	Blood Glucose Regulators
00006057782	Janumet	CA, NV	Blood Glucose Regulators
00006057561	Janumet	CA, NV	Blood Glucose Regulators
00006057562	Janumet	CA, NV	Blood Glucose Regulators
00006057582	Janumet	CA, NV	Blood Glucose Regulators
00006027731	Januvia	CA, ME, NV, VT	Blood Glucose Regulators
00006011254	Januvia	CA, NV	Blood Glucose Regulators
00006027733	Januvia	CA, NV	Blood Glucose Regulators
00006027754	Januvia	CA, NV	Blood Glucose Regulators
00006027782	Januvia	CA, NV	Blood Glucose Regulators
00006022128	Januvia	CA, NV	Blood Glucose Regulators
00006022131	Januvia	CA, NV	Blood Glucose Regulators
00006022154	Januvia	CA, NV	Blood Glucose Regulators
00006011228	Januvia	CA, NV	Blood Glucose Regulators
00006011231	Januvia	CA, NV	Blood Glucose Regulators
00006027702	Januvia	CA, NV	Blood Glucose Regulators
00006027728	Januvia	CA, NV	Blood Glucose Regulators
00597015230	Jardiance	CA, NV	Blood Glucose Regulators
00597015237	Jardiance	CA, NV	Blood Glucose Regulators
00597015290	Jardiance	CA, NV	Blood Glucose Regulators
00597015330	Jardiance	CA, NV	Blood Glucose Regulators
00597015337	Jardiance	CA, NV	Blood Glucose Regulators
00597015390	Jardiance	CA, NV	Blood Glucose Regulators
00088222033	Lantus	ME, NV	Hormones and Synthetic Substitutes
00088221905	Lantus Solostar	CA, ME, NV, VT	Hormones and Synthetic Substitutes
00169643810	Levemir	ME, NV	Hormones and Synthetic Substitutes
00378180310	Levothyroxine Sodium	,CA, OR, VT	Hormonal Agents – Thyroid
00185060501	Lisinopril	CA, ,OR, VT	Antihypertensives
68180098103	Lisinopril	CA, ME, OR	Antihypertensives
65862020390	Losartan Potassium	CA, ,OR, VT	Antihypertensives
00071101668	Lyrica	CA, VT	Neuropathic Pain
60687014301	Metformin HCL	CA, NV	Blood Glucose Regulators
49483062350	Metformin Hcl Er	CA, VT	Blood Glucose Regulators
62037083101	Metoprolol Succinate Er	CA, ,OR, VT	Beta Blockers
Multiple NDCs	Montelukast Sodium	CA, OR	Respiratory Tract Agents, Asthma
55513019001	Neulasta	OR, VT	Blood products and modifiers (Anti-infective for chemotherapy)
00169633910	Novolog	ME, NV, OR, VT,	Hormones and Synthetic Substitutes
00052027303	Nuvaring	CA, VT	Contraceptives, Intravaginal, Systemic
61958210101	Odefsey	CA, OR	Antivirals (HIV Treatment)
55111015810	Omeprazole	ME, ,OR, VT	Gastrointestinal Drugs
00378773293	Ondansetron	CA, OR	Antiemetics
53885024510	Onetouch Ultra Test Strip	CA, VT	Blood Sugar Diagnostics
Non-matching NDCs	Orkambi	ME, VT	Respiratory Agents – Misc.
59310057922	Proair	CA, ME, OR, VT,	Beta-Adrenergic Agents
00023530105	Restasis (Multidose)	CA, ME	Eye, Ear, Nose, and Throat (EENT) Preparations
59572041028	Revlimid	CA, ME, OR	Antineoplastics
59572041000	Revlimid	CA, ME, OR	Antineoplastics
68180035302	Sertraline	CA, ME, OR, VT,	Antidepressants
69097083502	Sertraline	CA, VT, OR	Antidepressants
65862001305	Sertraline	CA, VT, OR	Antidepressants
16729000517	Simvastatin	CA, VT	Antihyperlipidemics
16714068202	Simvastatin	CA, VT	Antihyperlipidemics
16714068101	Simvastatin	CA, VT	Antihyperlipidemics
16714068201	Simvastatin	CA, VT	Antihyperlipidemics
00093715498	Simvastatin	CA, VT	Antihyperlipidemics
00093715598	Simvastatin	CA, VT	Antihyperlipidemics
16729000617	Simvastatin	CA, VT	Antihyperlipidemics
Non-matching NDCs	Spiriva (Respimat/Handihaler)	ME, VT	Autonomic Drugs; Respiratory Tract Agents
12496120803	Suboxone	ME, VT	Central Nervous System Agents; Miscellaneous Therapeutic Agents; Miscellaneous Therapeutic Agents (Platelet-Aggregation Inhibitors)
52268001201	Suprep Bowel Prep Kit	CA, OR	Gastrointestinal Agents (Colonoscopy prep)
57894006103	Stelara	CA, ME, OR, VT,	Immunological Agents
00186037020	Symbicort	CA, ME, VT	Antiasthmatic And Bronchodilator Agents
64406000602	Tecfidera	CA, ME, OR, VT,	Psychotherapeutic And Neurological Agents – Misc.
49702022813	Tivicay	CA, VT	Antivirals, Hiv-Spec, Non-Peptidic Protease Inhib
00597014030	Tradjenta	CA, NV	Blood Glucose Regulators
00597014061	Tradjenta	CA, NV	Blood Glucose Regulators
00597014090	Tradjenta	CA, NV	Blood Glucose Regulators
50111043301	Trazodone	ME, OR, VT,	Antidepressants
00169255013	Tresiba (Flextouch)	ME, NV	Hormones and Synthetic Substitutes
49702023113	Triumeq	CA, OR, VT,	Antivirals
Non-matching NDCs	Trulicity	ME, NV	Hormones and Synthetic Substitutes
61958070101	Truvada	CA, OR	HIV Treatment
61958070301	Truvada	CA, OR	HIV Treatment
00173068220	Ventolin	CA, ME, OR, VT,	Autonomic Drugs; Respiratory Tract Agents
00169406013	Victoza (3-Pak)	ME, NV, VT	Hormones and Synthetic Substitutes
50458057930	Xarelto	CA, ME, VT	Anticoagulants,Coumarin Type
54092060601	Xiidra	CA, VT	Opthalmic Agents
Non-matching NDCs	Metformin	CA, NV, OR, VT,	Blood Glucose Regulators
57894019506	Zytiga	ME, OR	Antineoplastics

Source: Mathematica analysis of data reported in: California Department of Managed Health Care (2018); Maine Health Data Organization (2018); Nevada Department of Health and Human Services (2018b); Oregon Department of Consumer and Business Services (2019); and State of Vermont Green Mountain Care Board (2019).

Notes

[1] These states are California, Connecticut, Maine, New Hampshire, Nevada, Oregon, Washington, Texas, and Vermont. See: National Academy for State Health Policy Center for State Rx Pricing, Newly Enacted Laws at https://www.nashp.org/new-laws/, accessed August 8, 2019.

[2] See: California Office of Statewide Health Planning and Development (2018), Nevada Department of Health and Human Services (2018b), Maine Health Data Organization (2018), and State of Vermont Green Mountain Care Board (2019).

[3] See: California Department of Managed Health Care (December 2019).

[4] See: Vermont Green Mountain Care Board (January 2019).

[5] See: Oregon Department of Consumer and Business Services (2019).

[6] Washington defines a covered drug as one that “is currently on the market, is manufactured by a covered manufacturer, and has a wholesale acquisition cost of more than one hundred dollars for a course of treatment lasting less than one month or a thirty-day supply, and … the manufacturer increases the wholesale acquisition cost at least … [20] percent, including the proposed increase and the cumulative increase over one calendar year prior to the date of the proposed increase [or] [50] percent, including the proposed increase and the cumulative increase over three calendar years prior to the date of the proposed increase.” See: Washington HB 1224/Chapter 334 (2019), Section 2.

[7] A number of other states recently passed (but have not yet enacted) legislation that would require PBM reporting. Such states include Arkansas, Iowa, Louisiana, and Minnesota. These states variously would require PBM reporting of total rebates (all states); rebates retained by the PBM (Minnesota—like Nevada, Texas, and Washington); rebates the PBM did (or did not) pass through to insurers (Arkansas, Iowa, Louisiana, and Minnesota—like Connecticut and Texas); rebates passed through to enrollees at point of sale (Arkansas—like Texas); the amount paid for pharmacy services (Arkansas—like Washington); administrative fees received by the PBM (Iowa and Louisiana); and the highest, lowest, and mean aggregate retained rebate percentage (Iowa, Louisiana, and Minnesota). See: Arkansas SB 520/Act No. 994 (2019); Iowa SF 563 (2019), Louisiana SB 283/Act No. 371 (2018); and Minnesota SF 278/Session Law Chapter 39 (2019).

[8] Nevada’s report notes that the variation among manufacturers (and potentially among drugs produced by the same manufacturer) is significant: a simple unweighted average per manufacturer, then calculated across manufacturers, produced an average profit of 152 percent of the sum of production and administrative cost—that is, for every dollar spent on combined production and administrative costs, the manufacturers earned, on average, $1.52 in profit. The report states that larger manufacturers (with lower profit rates) tend to reduce the aggregate profit ratio, as calculated in Figure 1.

[9] Built on the National Academy for State Health Policy’s model legislation, Maryland’s Prescription Drug Affordability Board is an independent body with the authority to review high-cost prescription drugs and identify fair, appropriate rates for Marylanders to pay.

[10] To obtain consistent information from all reporting entities, NASHP’s model legislation and reporting templates call for reporting at the NDC level, and they align national and state-level reporting to support a coherent picture of pricing along the supply chain for each drug. See: https://www.nashp.org/policy/prescription-drug-pricing/model-legislation/#toggle-id-1, accessed August 9, 2019.

Acknowledgements: The National Academy for State Healthy Policy’s Center for State Rx Drug Pricing, with support from Arnold Ventures, commissioned this analysis from experts affiliated with Mathematica Policy Research.

State Insurance Reforms Tackle Price Transparency, Rising Costs, and the Uninsured

October 8, 2019/in Policy California, Connecticut, Nevada Blogs, Featured News Home Cost, Payment, and Delivery Reform, Eligibility and Enrollment, Essential Health Benefits, Health Coverage and Access, Health System Costs, State Insurance Marketplaces /by Christina Cousart

September was a busy time for state insurance regulators as they worked to finalize rate filings and prepare for the upcoming health insurance open enrollment season. While initial filings indicate nominal increases to individual market premiums for the 2020 plan year, insurance costs are escalating for individuals and families who receive coverage through their employers.

Beyond monitoring rates, state regulators continue to take action to ensure that all consumers across their markets have access to affordable, high-value coverage. Below are a few notable updates from states:

California enacts bills to address cost transparency. During the last month of its legislative session, California enacted two new laws that require insurers to provide enhanced reporting on health costs and quality.

AB 731 (Health Care Coverage: Rate Review) requires insurers, including large group health plans, to submit data to the state on medical use trends by geographic region and enhances requirements for plans to report data on spending compared to Medicare rates. The law will go into effect by July of 2021.
AB 929 (California Health Benefit Exchange: Data Collection) mandates that insurers provide data to the health insurance marketplace so that it can evaluate progress toward lowering costs, improving quality, and reducing disparities in the state. The law also requires that the marketplace make data on costs, quality, and health disparities public.

Connecticut seeks to “redefine the health care dynamic” through state employee plans. The state comptroller recently issued a request for proposals for insurers to administer state health benefits. The request for proposal carves out a role for the state to act as an active participant in negotiations between insurers and providers on reimbursement rates, including access to full details about negotiated payments.

Nevada releases detailed report on its uninsured. Reports estimate that nearly 400,000 Nevadans are currently uninsured. Among the uninsured, nearly 22 percent are young adults, 60 percent are Latino, and 63 percent are employed. Nevada’s recently implemented state-based marketplace will use this detailed data to target outreach efforts for the upcoming open enrollment period.

The National Academy for State Health Policy will continue to track and report on these and other insurance initiatives as they unfold in the coming months.

Nevada Fines Rx Manufacturers $17.4 Million for Failing to Explain Diabetes Medications’ Price Hikes

October 8, 2019/in Policy Nevada Blogs, Featured News Home Cost, Payment, and Delivery Reform, Health System Costs, Newly-Enacted Laws, Prescription Drug Pricing, State Rx Legislative Action /by Jennifer Reck

Last week, Nevada fined 21 pharmaceutical companies $17.4 million for failing to submit a report explaining recent, significant price hikes to essential diabetes drugs, as required by the state’s drug cost transparency law.

Faced with drug price increases far outpacing rates of inflation, states across the country are enacting transparency laws designed to shed light on what’s driving drug price hikes. Nevada’s 2017 transparency law is unique among these laws in its specific focus on public health. Initially, the law required manufacturers to report only on essential diabetes medications, with an additional requirement mandating reporting on asthma medication prices scheduled to go into effect next year.

The law gives Nevada the authority to levy fines of $5,000 a day for failure to report by the April 1 deadline. After warning letters to non-reporting companies generated a sizable uptick in reporting, last week the state sent notice of fines totaling $17.4 million to 21 non-compliant companies. The companies have 30 days to pay the fines or request a dispute resolution meeting with the state within 10 days. Companies have cited a range of reasons for their failure to comply with the transparency law, ranging from a lack of awareness of the new law to personnel transitions.

Other states’ transparency laws also include fines for failure to report information explaining high drug prices, ranging from fines of $1,000 a day in California, Vermont, and Washington State, to a high of $30,000 a day in Maine. Nevada may or may not receive the entire amount assessed in its proposed fines, pending outcomes of resolution meetings with manufacturers. If necessary, the state’s attorney general may seek a court order requiring payment.

While $17.4 million is a notable amount to cash-strapped states, that number pales in comparison to the estimated $2.7 billion that diabetes costs Nevada each year. The state reports that 12.6 percent of its adult population has diabetes, and this group incurs 2.3-times the medical expenses than those without diabetes.

Ensuring compliance with a law that has the potential to help the state monitor the extent, impact, and causes of price increases for essential diabetes medication remains a focus for Nevada’s Department of Health and Human Services drug transparency program.

States Continue to Implement Surprise Medical Billing Protections

June 17, 2019/in Policy Colorado, Nevada, New Mexico, Texas Blogs, Charts Consumer Affordability, Health Coverage and Access, Health IT/Data, Health System Costs /by Christina Cousart

By Christina Cousart
Updated June 24, 2019
During the 2019 legislative session, states have continued to advance protections for consumers against surprise medical balance bills – charges for unexpected, out-of-network medical care. To date, four new states have enacted multi-pronged policies that prohibit balance bills, institute a process for providers and carriers to resolve billing disputes, and foster pricing transparency between providers, carriers, and consumers to avoid situations that lead to balance bills. Texas also approved legislation strengthening its existing consumer protections. Here are highlights of the new legislation.

	Colorado (HB 1174)	Nevada (AB 469)	New Mexico (SB 337)	Texas (SB 1264; HB 2041)[1]	Washington (HB 1065)
Balance billing protections
Holds consumers harmless	✓	✓	✓	✓*	✓
Prohibition in case of emergencies	✓	✓[2]	✓	✓[3]	✓
Prohibition in case of out-of-network (OON) services delivered at an in-network facility	✓[4]		✓[5]	✓[6]	✓
Applicable providers/ facilities	Person who is licensed or otherwise authorized in the state to furnish health care services including: ● Physicians ● Dentists ● Optometrists ● Anesthesiologists ● Hospitals ● X-ray ● LaboratoryExcludes ambulance providers, but charges the insurance commissioner with setting payment methods for ambulance services.	Physician or other health care practitioner who is licensed or otherwise authorized in this state to furnish any health care service; and institutions providing health care services including: ● Hospitals ● Surgical centers for ambulatory patients ● Skilled nursing facilities ● Residential facilities for groups ● LaboratoriesEmergency facilities include hospitals or independent centers for emergency medical care	Licensed health care professionals, hospitals, or other facilities licensed to furnish health care.Facilities include entities providing health care services including: ● Hospitals; ● Ambulatory surgical centers; ● Birth centers; ● Drug and alcohol treatment centers; ● Laboratory, diagnostic, and testing centers; ● Health provider’s offices or clinics ● Urgent care centers ● Freestanding emergency rooms ● Therapeutic health care settings	Individual licensed under the laws of this state to practice medicine or health care facilities.Facilities include: ● hospitals; ● Licensed ambulatory surgical centers ● Licensed chemical dependency treatment facility ● Renal dialysis facilities ● Birthing centers; ● Rural health clinics; ● Federally qualified health centers ● Freestanding imaging centers; ● Freestanding emergency medical care facilities*	Person licensed under state law to practice health or health-related services, or an employee or agent of such a person acting in the scope of their employment.Facilities include: ● Hospices ● Hospitals ● Rural health care facilities ● Psychiatric hospitals ● Nursing homes ● Community mental health center ● Kidney disease treatment centers ● Ambulatory diagnostic treatment or surgical facilities ● Drug and alcohol treatment facilities; ● Home health agencies.Carriers may not balance bill in the case of emergency services delivered by out-of-state providers.
Billing dispute and resolution procedures
Reimbursement standard	For emergency services the greater of: ● In non-Denver areas: o 105% of carrier’s median in-network rate for services provided at a similar facility in the same geographic area; or o Median in-network rate for the same service at a similar facility in the same geographic area based on all-payer claims database (APCD) data. ● In the Denver area: o Carrier’s median in-network rate for the same service in a similar facility in the same geographic area; o 250% Medicare rate for the same service in a similar facility in the same geographic area; or o Median in-network rate for the same service in a similar facility in the same geographic area based on APCD data. For OON services at an in-network facility, the greater of: ● 110% of carrier’s median in-network rate for the service in the same geographic area; or ● 60^th percentile of the in-network rate for the same service in the same geographic area based on APCD data.	For facilities: ● 108% of the previously contracted rate if the facility had been in-network within the last 12 months.● 115% of the previously contracted rate if the facility had been in-network within the last 12-24 months.● If no such contract existed, an amount the carrier determines to be fair and reasonable.For providers:If a provider had been in-network within the past 12 months: ● The previously contracted rate, if the provider terminated the contract before it was set to expire without cause; ● 108% of the previously contracted rate if the provider terminated the contract for cause; ● A fair and reasonable amount, determined by the carrier, if the carrier terminated the contract for cause; ● The previously contracted rate adjusted by the Consumer Price Index, Medical Care Component for the prior year, if neither party terminated the contract.If a provider had not been in-network in the preceding 12 months, carrier may remit whatever payment it determines.	A 60^thpercentile of the allowed commercial reimbursement rate for the service performed by a provider in a similar specialty in the same geographic area. Should not be less than 150% of 2017 Medicare rate. A stakeholder group will convene annually to review the reimbursement rate.	The usual and customary rate or an agreed-to rate, meaning the allowable amount as described by the applicable master benefit plan document or policy.*	Commercially reasonable amount based on similar services provided in a similar geographic area.
Process for arbitration	Baseball arbitration (arbiter will pick the final payment offer submitted by either the health plan or the provider/facility), if carrier and provider do not agree to initial payment. Arbiter will consider: ● Provider training, education experience, and specialization ● Previously contracted rate, if the provider had a contract with the carrier within a year of the dispute	Arbiter will either require the provider to accept the payment issued by the carrier as payment in full, or to demand that the carrier remit an additional amount requested by the provider.		Mediation may be requested through the Department of Insurance.[7] In the case of mediation of facilities, the mediator shall determine if the amount charged by provider is excessive, and if the amount paid by the insurer is unreasonably low or not the usual and customary rate. In the case of mediation for other providers, the mediator shall take into account whether there is gross disparity between the amount charged by the provider and how much the provider or similarly qualified providers receive for similar services. Other factors may include:* ● Patient characteristics and complexity of the services ● Provider training, education experience, and specialization ● 80th percentile of all billed charges for the service ● 50th percentile of rates for the service ● History of network contracts	Baseball arbitration (arbiter will pick the final payment offer submitted by either the health plan or the provider/facility), if carrier and provider do not agree to initial payment. Arbiter may consider: ● Evidence from the parties to assert the reasonableness of their offer ● Patient characteristics and complexity of the services ● Other relevant information include data from the state APCD
Data collection and reporting tools	State APCD		Benchmarking database maintained by a nonprofit organization specified by the insurance commissioner. Enables the commissioner to require carriers to report: ● The annual percentage of claims and expenditures paid to OON providers ● Changes to the percent of claims paid as emergency claims	The insurance commissioner is charged with selecting an organization to maintain a benchmarking database.	Requires state APCD to establish a dataset that provider, facilities, and carrier s may use to determine reasonable rates and to resolve payment disputes. Carriers shall provide information concerning the utilization of OON providers and cost savings yielded from the law as part of their annual rate filing.
Penalties
Provider must refund excess payments made by consumers	✓[8]		✓[9]		✓[10]
Penalty for violations	✓[11]		✓[12]	✓[13]*	✓[14]
Transparency standards
Must provide disclosure of potential repercussions of OON services	● Carriers ● Providers		● Providers[15]		● Carriers ● Providers
Requires cost estimates to consumers	✓[16]				✓[17]
Additional requirements:		On carriers: ● Must arrange for patient transfer within 24 hours of receiving notice that person is stable and can be transferred.On providers: ● Must send notice to carrier, no later than eight hours after person presents at an OON facility ● Must send notice to carrier that the beneficiary has stabilized and may be transferred to an in-network facility within 24 hours of stabilization	On carriers: ● Must make claims status information available to providers.On providers: ● Must post in a publicly accessible manner and online information about which carriers it contracts with. ● Must notify the carrier of a beneficiary’s admission within a reasonable period after stabilization. ● Any communication regarding bills, shall clearly state that the beneficiary is responsible only for in-network cost sharing amounts.	On carriers: ● Explanation of benefits must include information about balance billing protections; the total amount the provider may bill the enrollee under the enrollee’s health benefit plan; and an itemization of cost-sharing included in that total.* [18] On providers: ● Facilities must post notice that o it may charge a facility fee o it may charge rates comparable to a hospital emergency room o the facility or a physician at the facility may be OON and bill separately o Lists all the carriers it contracts with ● Facilities must provide patients with a disclosure that:* o Lists the facility fees that may result from the visit o Lists the carriers the facility is in-network with o Lists other cost information such as median facility fees and observation fees. ● Prohibits facilities from using logos or language to misrepresent that it might be in an insurers network.	On carriers: ● Must immediately arrange for an alternate plan of treatment if an agreement on post-stabilization services cannot be reached with the emergency provider. ● Must update provider directory within 30 days after the addition or termination of a provider.On providers: ● The provider must contact the carrier within 30 minutes of stabilization before rendering further services. ● Must post online information about which carriers it contracts with. ● Must provide carriers with updated lists of non-employed providers working at the facility

*Indicates changes made by the new Texas law.
[1] Texas’ 2019 law amends and enhances already existing protections in the state. Changes made by the new law are noted by asterisk.
[2] Does not apply when: 1) Services are received at a critical access hospital; 2) A person is covered by insurance sold outside of the state; 3) Services provided more than 24 hours after notification has been provided and a person has been stabilized.
[3] In the case of a beneficiary who cannot reasonably access a preferred provider, the protections extend to 1) medical screening and examinations require to determine if a medical emergency exists; 2) necessary emergency services to treat and stabilize; 3) services originating in an emergency facility following stabilization; and 4) supplies related to the services rendered by that facility.
[4] Does not apply if the consumer affirmatively consented to receive OON services.
[5] Only applies when; 1) A participating provider is unavailable; 2) Medically necessary care is unavailable in the beneficiary’s network (determined by the provider in conjunction with the health plan); or 3) the patient did not consent to receive services from the OON provider.
[6] Does not apply in the case of a beneficiary that elects, in writing and in advance, to receive services from the out-of-network provider, or in the case that the provider does provide the enrollee with a written disclosure that they are out-of-network and provides an estimate of the projected amount the enrollee will be responsible for. Explicitly includes protections for OON services delivered by diagnostic imaging or labs.
[7] Prior law allowed mediation requests only in the case of claims over $500 and that were for either emergency services, or services rendered by a provider or supplier at an in-network facility.
[8] Refund must be issued within 60 days, or interest will accrue.
[9] Refund must be issued within 45 days, or interest will accrue.
[10] Refund must be issued within 30 days, or interest will accrue.
[11] Punished by a fine of not more than one thousand dollars, or by imprisonment in the county jail for not more than one year, or both.
[12] Insurance superintendent may impose a fine on any provider that offers an unlawful rebate or inducement to entice a person to seek OON services
[13] The Attorney General may bring civil action against entities that exhibit a pattern of repeatedly violating billing protections. Authorizes applicable agencies to take action against providers or facilities who violate billing protections. The Secretary of State may suspend or revoke a license, or bring civil action against entities who violate the disclosure requirements outlined under Texas law. The Department of Health may impose penalties up to $1,000 for certain violations.
[14] Authorizes the Department of Health or an appropriate authority to levy fines against providers or facilities who violate these policies. Commissioner may levy a fine against carriers who violate these policies. Repeated violation may constitute unprofessional conduct and risk licensure of a provider or facility.
[15] If an OON provider has advanced notice that the beneficiary is OON, they must notice the beneficiary of their OON status and recommend the beneficiary contact their carrier to discuss options.
[16] A provider must issue a cost estimate within three days if requested by a patient.
[17] Carrier must provide an estimate of out-of-pocket costs for OON services upon request.
[18] Applicable to Health Maintenance Organizations.

Webinar: So You Think You Want a State-based Marketplace? Here’s How!

May 10, 2019/in Policy District Of Columbia, Idaho, Massachusetts, Nevada Webinars Eligibility and Enrollment, Health Coverage and Access, Medicaid Expansion, State Insurance Marketplaces /by NASHP Staff

Friday, May 10
2-3 p.m. (ET)

View Webinar Download Webinar

State-based health insurance marketplaces (SBMs) outperform those using the federal platform – achieving lower premium rate hikes and providing more competition and plan choices. As a result, some states are thinking about converting to an SBM, but what does it take for a state to make the switch? During this webinar, SBM executives from Washington, DC, Idaho, and Massachusetts will share lessons in how to build effective SBMs based on their years of experience.

Nevada Health Link Executive Director Heather Korbulic will share how her state’s transition to an SBM, for the 2020 open enrollment period, is faring.

Read this NASHP Q&A with Heather Korbulic: Nevada’s Insurance Exchange Director Talks about Transitioning to a State-based Marketplace and Saving Millions, April 2018

NASHP Issues RFP for Partner to Help States Develop a Drug Cost Transparency Database

September 18, 2018/in Policy California, Connecticut, Nevada, Oregon, Vermont Administrative Actions, Legal Resources, Prescription Drug Pricing, State Rx Legislative Action /by Jennifer Reck

Photo credit: Shutterstock

NASHP’s Center for State Rx Drug Pricing seeks a partner to provide technical and strategic expertise to help a workgroup of state officials from California, Nevada, Oregon, Connecticut, and Vermont implement their drug cost transparency laws and help Maine and New Hampshire develop transparency programs as mandated by recent legislation. This work will help all states maximize cross-state drug cost comparability.
The partner must have expertise in data collection, presentation skills, and analysis to provide guidance in the creation of a prescription drug transparency roadmap and template that states can use to create a searchable database for prescription drug cost information.
NASHP’s new State Transparency Implementation Network is supported by the Laura and John Arnold Foundation.
Read or download the RFP here.
Proposals must be submitted to Jennifer Reck by Oct. 5, 2018 by 5 p.m. (EST). For additional information, review NASHP’s chart comparing enacted transparency laws across states.

Nevada’s Insurance Exchange Director Talks about Transitioning to a State-Based Marketplace and Saving Millions

April 24, 2018/in Policy Nevada Blogs Eligibility and Enrollment, Health Coverage and Access, State Insurance Marketplaces /by Corinne Alberts

NV Exchange Director Heather Korbulic

Nevada’s marketplace is poised to become the first to transition from the federal platform to an entirely state-run exchange. Its director explains how the move will save millions and improve residents’ health insurance.
Under the Affordable Care Act, states can either administer their own health insurance marketplaces as state-based marketplaces (SBMs), or default to the federally-run marketplace. Nevada is one of five states that operate a hybrid model – a state-based marketplace that uses the federal platform. These hybrid states are responsible for plan management and outreach and recruitment, which includes marketing activities, running local call centers, and coordinating with the state insurance department, while using the federal government’s technology platform and website to perform eligibility and enrollment functions.
Nevada’s marketplace – Nevada Health Link — is poised to become the first state in the nation to move away from the federal marketplace and transition to a full SBM. By transitioning, Nevada seeks greater flexibility to operate a marketplace tailored for its residents, while enabling the state to save millions in operational costs.
NASHP sat down with Nevada Health Link Executive Director Heather Korbulic to discuss the motivation behind Nevada’s transition, the value of state autonomy, and the future of the marketplaces.
Can you share the history of Nevada Health Link and why you are making this change?
To provide some history, in 2011, Nevada had approved statute to operate an SBM. However, when that SBM launched in 2014, the system did not work, creating significant issues for our consumers and carriers. Nevada had to decide whether to try again or begin using the federal platform—mostly to conduct required eligibility and enrollment functions. The FFM [federally facilitated marketplace] was essentially working at that time, and our board decided to transition to the SBM-FP model [state-based model that used the federal platform].
For the first two years as an SBM-FP, Nevada did not pay to use the federal platform, but in 2015, we were given notice that SBM-FPs would be required to pay a user fee. In 2017, the fee was set at 1.5 percent of premiums of plans sold through the marketplace, going up to 2 percent in 2018, and 3 percent thereafter. For comparison, the FFM collects a 3.5 percent assessment from insurers who offer coverage in FFM states.
In total, Nevada charges insurers in our state an assessment rate of 3.15 percent of premiums to [sell plans and] operate the marketplace. With the planned increases to the user fee, in 2019, Nevada would be left with only 0.15 percent of the assessment to conduct all of the functionality required of the SBM-FPs. We believe this would make the marketplace insolvent and unable to adequately perform its required functions.
Could you help us understand what these functions are—what distinguishes you from the FFM?
SBM-FPs operate local consumer assistance centers and conduct plan certification. We do stakeholder engagement in coordination with sister agencies like Medicaid and the state health department. As a state agency, we comply with all state oversight requirements along with federally-required oversight requirements for the marketplace. We operate the state navigator program, and do all our own marketing and outreach. A significant portion of our budget goes to outreach, as we have seen this as key to generating robust enrollment [which helps drive competition and affordability]. The federal government is responsible for the Healthcare.gov website and operating the integrated eligibility system for the state. (See Table 1 for a comparison of marketplace models.)
I think the role of the SBM-FPs is overlooked in discussions of the marketplace. The Nevada exchange has really honed in on our capabilities as a resource for Nevadans. We have become an important part of our community and have demonstrated success. Our consumers, carriers, state agencies and lawmakers have come to depend on us to answer their questions. Nevada lawmakers and our governor have shown commitment to the value that our marketplace has brought to our state.
This past year has given us some of the best insight into the value of having some state authority over our functionality. The national cuts to marketing and outreach this open enrollment period, and the confusion surrounding the existence of financial subsidies led to enrollment declines in many FFM states. By contrast, Nevada saw an increase in enrollment this year of 2.2 percent. We believe it had everything to do with our marketplace being a resource for Nevadans to connect to subsidies, and our work with our navigators and stakeholders to hammer the message of this year’s shortened enrollment period through focused marketing.

Table 1. State or Federal Authority over Marketplace Functions in Different Marketplace Models
Marketplace Functions	State-Based Marketplaces (SBM)	State-Based Marketplaces Using the Federal Platform (SBM-FP)	Federally Facilitated Marketplaces (FFM)
Plan Management
Set and collect plan assessments	State	Both*	Federal
Qualified health plan review and certification	State	State	Federal**
Outreach and Marketing
Navigator/Assister program	State	State	Federal
Marketing and advertising	State	State	Federal
Agent/broker program	State	State	Federal
IT/Operations
Integrated eligibility system	State	Federal	Federal
Enrollment website	State	Federal	Federal
Online consumer tools (e.g., calculators, provider directories, formularies)	State	Federal**	Federal
Call center	State	Federal**	Federal
Set special enrollment periods	Both***	Federal	Federal

*Plan assessments are fees paid by insurers to sell their insurance product through a marketplace. In SBM-FP states, the FFM collects a portion of assessments, known as a user fee, to operate the FFM. The SBM-FP user fee was 1.5% of premiums in 2017, 2% in 2018, and will be 3% in 2019.
** While the federal government has primary responsibility for these functions, many states also perform these functions to assure compliance with state standard or to ensure consumers have access to resources tailored to state-specific needs.
*** The parameters for special enrollment periods (SEPs) are defined by federal statute and regulation, but SBMs have flexibility to institute SEPs responsive to exceptional circumstances identified by the SBM.
What sort of improvements and savings do you anticipate after moving to the SBM model?
Nevada is in a good position to negotiate, we are essentially asking vendors for a “marketplace in a box” with all the pieces we need to make this work. We are a state agency with finite resources and want to clearly understand the costs of this packaged system — including technology and call center operations — so we can assess if it is affordable and whether it will be at a lesser cost than the FFM. Many vendors have now developed tested and proven products in this regard, with a limited market to sell them to—it is a win-win for them to work with us. Together, we will find savings and efficiencies to offer a better user experience and help our consumers.
From our initial research, we have found that Nevada could save significantly by moving to a fully functional, demonstrated product. In 2020, the 3 percent user fee will be approximately $12 million for our state, but we estimate that with our own platform operational costs will be closer to $6 million — a savings of 50 percent!
We also believe this is a chance for us to control our own destiny by managing our own marketplace. Having been an SBM-FP for several years now, we have seen the limitations that come with working with the FFM. There is very little flexibility given to states — any small change we request to try to tailor the system is almost impossible to accomplish.
There is also a lack of insight into our own state’s data. Without data, we have no sense of who our consumers are at any given moment. We are periodically provided zip code-level data breakdowns from CMS [Centers for Medicare & Medicaid Services] during the year but, for the most part, we do not know who is actively engaged in the system during the open enrollment season or other detailed information necessary to conduct truly targeted outreach. We think there are budgetary efficiencies to be found by having access to our own data — it will enable us to potentially increase enrollment and gain efficiencies from more direct consumer targeting.
What have you learned from other SBMs that helped guide Nevada’s approach?
I have learned a tremendous amount from my colleagues across the country as far as the technical components of how an SBM operates, however, what I have really walked away with is that no two SBMs are alike. There are so many differences in the ways that SBMs operate depending on how the marketplace fits in the state. This has been a helpful observation for Nevada because we know how we operate now, and we want to bring on a system that can accommodate what we want to do and will work with our state’s insurers and agencies like Medicaid.

“What I have really walked away with is that no two SBMs are alike. There are so many differences in the ways that SBMs operate depending on how the marketplace fits in the state.”

What advice do you have for states that are exploring a transition to an SBM?
Potentially, a state would need to pass some enabling legislation. Then they would need to invest in state agency staff and a small budget to operate the marketplace before it can begin collecting revenue. In Nevada, we have set aside $1 million for design, development, and implementation of our marketplace. Ultimately, it is a matter of investing and committing to the values that a SBM brings to a state and finding long-term savings.
There are many pending federal policy changes that bear national significant implications for health insurance coverage and marketplaces. What could these changes mean for consumers in Nevada?
In 2017, and continuing into 2018, we have seen uncertainty related to the ACA. We have come through the legislative endeavors to repeal the ACA last year, and now we are looking at executive rulemaking processes that could create disruption for our markets in Nevada.
I am concerned about rule-making related to Association Health Plans and what ability the state has to regulate those plans. I am also concerned about the Short Term Limited Duration Insurance proposed regulation. There is a time and place for short-term plans — for when consumers are between jobs or if they missed the open enrollment period — but these plans are not long-term solutions. We are concerned that consumers who do not qualify for premium subsidies will see these short-term plans as viable alternatives to qualified health plans, even though they do not offer the same level of benefits or consumer protections. We have seen some brokers try to game the system by directing consumers to enroll in a string of short-term plans, so that they can gain commissions for each enrollment, but ultimately that is not in the best interest of the consumer [who will have limited coverage, and have to manage constant shifts in benefits and networks].
During this upcoming open enrollment period, our marketplace will be focused on education campaigns to make sure we demonstrate to our consumers the value of having continuous coverage that meets the standards required for qualified health plans.
Is there anything else you feel it is important for leaders and consumers to know about your transition?
Everything that Nevada has had control over has been a demonstrable success. We have successfully made ourselves known as a resource in our community and for our consumers; we really are an important institution in our state. I believe the investments we are making in our new platform and the resulting savings we will achieve should be of interest to every state that wants to bring value to their insurance landscape.
View Nevada’s Request for Proposal for a technology vendor to help the state become a fully state-operated program.
Thank you to Heather Korbulic and Janel Davis of Nevada Health Link for their time and contributions to this article. Thank you to Christina Cousart, Trish Riley, Chris Kukka, and Rohan Narayanan for their critical support and feedback to this blog.
NASHP supports the State Health Exchange Leadership Network that provides a platform for state health insurance marketplaces staff and leaders to participate in peer-to-peer dialogue, discuss emerging issues, and share best practices. To learn more about the Network or NASHP’s work with the state-based marketplaces, contact Christina Cousart (ccousart@nashp.org)