The Manatt State Cost Containment Update - March 20, 2023 - State Benchmarking Updates: The State of Play

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The State of Play: Cost Growth Benchmarking Programs (as of March 23, 2023)

Detailed State Updates as of March 20, 2023

State Update Detail
CA Benchmarking Update Members of California’s Office of Health Care Affordability’s Affordability Board have been appointed by state leadership. The Board will begin regular meetings through 2023 and will soon begin appointing members to the Health Care Affordability Advisory Committee.
CT Benchmarking Update The Office of Health Strategy (OHS) Healthcare Benchmark Initiative Steering Committee met in February to discuss the state’s approach to considering inflation in the state’s cost growth benchmark, discuss benchmark timeline and performance reporting, and present updated commercial and Medicaid cost driver analyses.
The Committee also engaged in cross-state dialogue with other cost growth benchmarking states (including Rhode Island and Oregon) around their strategies for addressing pharmaceutical costs, advancing value-based payment models, and accountability measures.
MA Benchmarking Update On March 13, the Massachusetts Center for Health Information and Analysis (CHIA) published its Annual Report on the Performance of the Massachusetts Health Care System, which examines state trends in costs, coverage, and quality indicators. Key findings include:
  • Total health care expenditures (THCE) totaled $67.9 billion in 2021. From 2019 to 2021, THCE per resident increased at an annualized rate of 3.2%. THCE per capita increased 9.0% in 2021 to $9,715 per resident, following a 2.3% decline in 2020.
  • From 2019 to 2021, pharmacy spending increased at an annualized rate of 7.5% net of rebates and 9.6% gross of rebates, resulting in the fastest rate of three-year service category growth in Massachusetts.
  • In 2021, spending on behavioral health (BH) services comprised 6.6% of total health care spending for commercial members, 15.9% for Medicaid MCO/ACO-A members, and 1.9% for Medicare Advantage members.
On March 15, the Massachusetts HPC will hold the annual hearing on the potential modification of the health care cost growth benchmark. The hearing will feature a presentation from the HPC on the Health Care Cost Growth Benchmark modification process, national health care spending trends, and affordability implications for Massachusetts residents. Staff from the Center for Health Information and Analysis (CHIA) will also present its Annual Report on the Performance of the Massachusetts Health Care System.
ME Benchmarking Update Gov. Janet Mills has nominated Meg Garratt-Reed to serve as the Executive Director of the state’s new Office of Affordable Health Care. Garratt-Reed currently leads the state’s office of the Health Insurance Marketplace.
MN Legislative Update Minnesota has introduced legislation to create a health affordability board that would establish health care spending targets for hospitals and providers, measure and publish health care system performance, develop accountability mechanisms, and collaborate with state agencies using APCD data to analyze and understand specific drivers of health care cost growth.
NV Benchmarking Update From January through March of 2023, the Patient Protection Commission (PPC) will be validating, analyzing, and reviewing baseline benchmark findings with Nevada insurers who responded to the State’s request for the aggregated baseline benchmark data in late 2022. Additionally, the Commission will be working to further develop cost growth mitigation strategies.
NV Legislative Update Nevada’s Gov. Lombardo has stated he will not support proposed legislation to establish into law the executive order former Governor Steve Sisolak signed in 2021, which created the state’s health care cost growth benchmark program.
OR Benchmarking Update The Oregon Cost Growth Target Advisory Committee met in January to discuss findings from the 2021 Oregon Health Insurance Survey, review 2013-2019 cost growth data, and discuss state approaches to incorporating inflation into state cost growth benchmarking accountability measures.
WA Benchmarking Update The Washington Healthcare Cost Transparency Board met with the Advisory Committee on Data Issues at a public meeting on February 7 that included a presentation on preliminary findings from a study on cost growth drivers in the state using APCD data and an update on the WA multi-payer Primary Care Model Framework.
WA Legislative Update Washington advocates introduced HB 1508 to empower the Health Care Cost Transparency Board (HCCTB) and incorporate an accountability framework into the state’s cost growth benchmarking program.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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