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We examine the key healthcare topics on the 2018 Congressional agenda.

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Jan. 12, 2018

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FEATURED STORY
 

YAY! Job Security for Your Editors: 2018 Congressional Agenda

 
 

The Congressional agenda for 2018 is packed with healthcare-focused topics that could have wide-ranging impact on how patients will access care and how participating Medicare and Medicaid providers will be reimbursed.

Key focus areas include:

  • Entitlement reform. While House Republican Speaker Paul Ryan has voiced interest in overhauling and scaling back entitlement programs including Medicare and Medicaid in 2018, he may not have the support needed from members of his own political party. Republican Senators and moderate Republican Representatives predict such reform efforts could mean a brutal and unpopular legislative battle that may be too costly in an election year when the GOP’s control of Congress is at stake. Bipartisan support would be necessary to make any lasting cuts in entitlement programs. So this issue may be more talk and less action.
  • Medicare disproportionate share hospital (DSH) cuts. Hospitals were disappointed that a delay of the Medicaid DSH cuts—which passed the House—were not included in year-end legislation. Supporters are hoping that Congress sometime in January will pass the House version of the temporary delay in implementation. Hospitals that serve a high volume of low-income and uninsured patients have said they likely will have to scale back services or even close if the DSH cuts are not reversed.
  • Medicare extenders. On December 21, Congress passed temporary government-spending legislation (so-called “extenders”) that funds until March 31, 2018 the Children’s Health Insurance Program (CHIP), community health centers, National Health Service Corps, graduate medical education, and the Special Diabetes Program. However, funding for some programs may run out before Congress is able to address shortfalls. At risk are the Medicare Dependent and Low Volume Hospital program, a permanent fix to the policy capping therapy (eg, physical, occupational, speech-language, etc), a delay of the Medicaid DSH pay cuts, and the Maternal, Infant, and Early Childhood Home Visiting Program. Supporters hope to get the programs additional funding as part of the January government spending bill, but that is not guaranteed.
  • Insurance market stabilization. With the end of the individual mandate and the decision by the Trump Administration to end the cost-sharing reduction subsidies, there is a lot of uncertainty for insurers in the health insurance exchange marketplace. There is bipartisan talk in Congress to continue the federal payments to insurers through 2019, hoping that would help to stabilize insurance rates. The measure, which was widely supported by state governors, also authorized funding to:
    • Help states create reinsurance programs for insurers hit with unusually high claims
    • Restore federal funding for advertising and outreach efforts to get Americans to sign up for coverage through health insurance exchanges
    • Allow states more flexibility in the types of health plans they could offer, such as expanding availability of high-deductible, lower-premium “catastrophic plans”

Uncertainty and policy confusion will continue this year, since House and Senate Republicans are at odds over the future of healthcare reform. It appears unlikely that Congress will be able to muster enough support to repeal the law—a dynamic exacerbated by election year politics. That leaves more focus on administrative actions that might be used to undermine the Affordable Care Act (ACA). President Trump could attempt to further unravel the ACA, though it’s unlikely he’ll be able to completely wipe out some of the more popular pieces of the healthcare reform law.

 

How Biosimilars Will Continue to Evolve in 2018

 
 
Managed Healthcare Executive

How will the biosimilars market continue to evolve in 2018?

In her interview with Managed Healthcare Executive, our own Amanda Forys, Senior Director of Reimbursement and Policy Insights, talks about competition and patient access in 2018. Learn more

 

 

 
LEGISLATIVE UPDATES
 

Azar-o World: Once He Was Seen as the “Problem,” and Now the Solution

 
 

On January 9, the Senate Finance Committee held a hearing on the nomination of Alex Azar as Secretary of the Department of Health and Human Services (HHS). By most accounts, Azar was conciliatory, promising bipartisan cooperation and an openness to new ideas, within certain parameters. He repeatedly said drug prices were “too high”; however, he warned that “there is no silver bullet” and that high drug prices are the result of a complex system that encourages manufacturers to continuously raise prices.

Azar generally deflected calls for Medicare negotiation, price controls, and government-controlled formularies; rather, he said the “most important thing” regarding drug prices is “to figure out how we can reverse the incentives on list prices.”

If confirmed, Azar said he would tackle the issue of drug costs by focusing on competition, including a “robust generic market” and more competition for branded medicines and biosimilars. He also said he would “go against gaming of exclusivity and patents by branded drug companies.” In somewhat surprising comments, Azar seemed to suggest support for mandatory demos in Medicare and a potential role for pharmacy benefit managers (PBMs) in the Part B program.

Senate Democrats were largely skeptical of Azar’s commitment to lowering drug prices, often citing double-digit prices of Eli Lilly products during his tenure with the company.

Despite general Democratic opposition, Azar is expected to be confirmed, joining President Trump’s other pro-competition, anti-pricing control administrators within the department and subordinate agencies.

 

Legislative Byte

 
 

 
CODING CONCEPTS CORNER
 

Editor’s Note: We welcome you to the first of a new, occasional series of articles discussing notable billing and coding issues. Our inaugural piece touches on a coding adjustment for one of the most controversial Medicare payment policies in recent years—the alternative payment methodology for drugs obtained via the 340B Drug Payment Program.

 

The Razzle Dazzle of Modifiers in 340B

 
 

As if the reduction in Outpatient Prospective Payment System (OPPS) payment starting January 1 for certain separately payable drugs that are acquired through the 340B program wasn’t enough to keep hospital administrators up at night, getting paid at the reduced rate of average sales price (ASP) minus 22.5% just got more complex, as the Centers for Medicare & Medicaid Services (CMS) issued guidance regarding its 2 new Health Care Procedure Coding System (HCPCS) Level II modifiers to identify 340B-acquired drugs.

The new coding rules apply to hospitals paid under the OPPS that are not excepted from the payment adjustment policy, and also apply to institutions exempt from the payment cuts (eg, PPS-exempt cancer hospitals, etc) that continue to be paid at ASP plus 6%, yet still obtain drugs through the 340B program.

Hospitals must report 1 of 2 new HCPCS Level II pricing modifiers to identify 340B-acquired drugs:

  • Modifier “JGDrug or biological acquired with 340B drug pricing program discount
    • This modifier will trigger Medicare payment reduction to ASP -22.5%
  • Modifier “TBDrug or biological acquired with 340B drug pricing program discount, reported for informational purposes
    • This modifier will maintain Medicare payment at ASP +6%

A drug acquired through the 340B program is one that was purchased at or below the 340B ceiling price from the manufacturer and includes 340B drugs purchased through the Prime Vendor Program (PVP).

Separately payable drugs include pass-through drugs assigned an OPPS status indicator (SI) “G” and non-pass-through drugs assigned an OPPS SI “K.” (OPPS SIs are listed in the Addendum B updates and are posted quarterly by CMS.) All drugs with pass-through status (SI = G) acquired through the 340B program must be reported with modifier TB and will be reimbursed at ASP +6%. Reporting for non-pass-through drugs is a bit trickier.

The following table may help with understanding the new 340B coding rules and their effect on OPPS payment to hospitals. Reporting the modifiers is mandatory unless otherwise specified.


These pricing modifiers are reported in addition to other modifiers that may apply to the HCPCS drug code.

For an analysis of how these and other modifiers may affect Medicare reimbursement for interested products, reach out to your Xcenda contacts or to Milda Kaitz at milda.kaitz@xcenda.com.

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REGULATORY UPDATES
 

CMMI Ups the A-APM Ante

 
 

On Tuesday, CMS announced that the Center for Medicare and Medicaid Innovation (CMMI) would be launching a new payment model for 90-day inpatient/outpatient episodes.

The Bundled Payments for Care Improvement Advanced (BPCI Advanced) is a voluntary program that builds lessons learned in the BPCI initiative, an inpatient payment model that expires this year. The new model has 1 track (rather than 4) and will make additional payments to providers in 32 different episodes (29 inpatient, 3 outpatient) if costs are less than the spending target and certain quality measures are met.

Because participants will need to bear financial risk, have payments tied to quality performance, and require use of electronic health records, the BCPI Advanced will qualify as an Advanced Alternative Payment Model (A-APM) under the Quality Payment Program (QPP), thus allowing providers to bypass the Merit-based Incentive Payment program and, instead, get the 5% A-APM bonus payment. The BCPI Advanced is accepting applications through the CMMI website until March 12. The model would start October 1, 2018 and run through 2023.

 

Charitable Copay Organizations Shaken at the Foundation by OIG

 
 

On the heels of the late November retraction of the Office of Inspector General (OIG) approval for Caring Voices Coalition (CVC), CVC will not be offering any funds in 2018. The OIG, in turn, published a letter to Pharmaceutical Research and Manufacturers of America stating it will not pursue administrative sanctions against drug companies for providing free drugs in 2018 to any patients who were receiving cost-share support from CVC as of November 28, 2017. The OIG listed a number of safeguards in the letter to ensure compliance with the Anti-Kickback Statute (AKS).

While CVC closed because the OIG stated the charity provided too much information to drug companies who donated funds, Patient Services Inc. (PSI) filed a lawsuit Monday against the federal government alleging unlawful federal restrictions impacting its ability to communicate with donors as a violation of free speech. The lawsuit states the restrictions are hampering their ability to establish funds to assist patients with their out-of-pocket costs.

There has been increased pressure on charitable copay organizations to maintain arm’s length from their donors, which could threaten the availability of donations. If charitable copay funds are less available for patients who require life-saving, high-cost medication, patients could be the real losers.

 

Apples Aren’t Oranges: Level of Insurance Matters for Specialty Drugs

 
 

A new study on specialty drug usage comes with some surprising findings. The authors show that some common assumptions about exchange and non-exchange plans do not adequately explain significant differences in drug utilization.

In this study, specialty drugs for the treatment of chronic inflammatory diseases (CIDs), such as ORENCIA® (abatacept), HUMIRA® (adalimumab), and REMICADE® (infliximab), were examined for nearly 1 million exchange members and 2.5 million non-exchange members. Exchange and non-exchange differences in age and sex were negligible, while comorbidity scores, rates of CID, and mean total expenditures were very similar.

However, utilization of specialty drugs to treat CID averaged 20% lower for the exchange plan populations. A further breakdown among exchange plans compared to non-exchange plans showed utilization at:

  • 69% below non-exchange (Bronze plans)
  • 23% below non-exchange (Silver plans)
  • 35.6% above non-exchange (Gold plans)
  • 57.5% above non-exchange (Platinum plans)

Following adjustments at the local level for enormous variations in utilization, these general observations continued to hold. Some conflicting data exist, such as a 2014 report by Express Scripts which showed 9% higher use of specialty drugs by exchange plan members.

Attempting to explain their observations, the authors proposed that exchange plans:

  • Require more cost-sharing by members
  • Have less robust networks and offer less provider access (Bronze and Silver)
  • Are subject to patient self-selection, with sicker patients gravitating toward premium plans (Gold and Platinum)

The newness of the ACA exchange is also likely accounting for members who, previously uninsured, are more apt to first try less-expensive drug options. The study did not examine the role of medical vs pharmacy benefit type or consider the impact of tiers within plans.

 

Information Buffet (AKA, Other Stuff That Caught Our Attention)

 
 

We kept running into stories we wanted to bring to your attention, so here’s a quick hit list of other news we thought you should know:

 
HEARD ON THE STREET
 

“Rebates being paid by pharmaceutical companies, it’s about a third of what branded [drug] companies actually have as a list price…. A third of that goes into the distribution system through insurance companies, PBMs, and others through rebates.

“I think what’s really broken, if you want to call it that, [is] that those rebates are not passed on to consumers…. We think what we really have to do is get some of those rebates, which are the product of intense negotiations with the supply chain, on to the people who need it at the pharmacy counter
.”

 

– Merck CEO Ken Frazier, interviewed by CNBC at the J.P. Morgan Healthcare Conference

Source: “Merck CEO says more of drug rebates should end up with consumers,” CNBC, January 8

 
POLICY BY NUMBERS
 

22 vs 20

 

There were more men named Michael (22) than female CEOs (20) who gave company presentations at this week’s J.P. Morgan Healthcare Conference.

Source: “Men named Michael outnumber female CEOs presenting at #JPM18,” STAT, January 7

 
UPCOMING MEETINGS & CONFERENCES
 

CBI 10th HUB and SPP Model Optimization Conference

February 27–28 l Philadelphia, PA
Join AmerisourceBergen sister company Lash Group at CBI’s 10th Annual HUB and SPP Model Optimization Conference in Philadelphia. Mark Sypkerman, Senior Vice President of Premier Source at Lash Group, will present a session titled, “Implement New Technology Innovations to Improve Speed, Scale, and Patient and Provider Experience for Electronic Benefit Verification and Prior Authorization.” Learn more.

 

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Count on Health Policy Weekly for an at-a-glance view of legislative and regulatory developments and news that impacts the healthcare industry.

 
 
 
 

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FEATURED CONTRIBUTORS
 

EDITOR-IN-CHIEF:
Jennifer Snow
Senior Director,
Health Policy
Xcenda

MANAGING EDITOR:
Scott Shields
Associate Director,
Health Policy
Xcenda

 

ADVISORY BOARD:

Peyton Howell, MHA
President | Global Sourcing & Manufacturer Relations | AmerisourceBergen Corporation

Amy Grogg, PharmD
Senior Vice President | Strategy & Commercialization | AmerisourceBergen Corporation

Kristine Flemister, PharmD
President | Xcenda

Tommy Bramley, PhD, RPh
President | Lash Group

Stacie Heller
Vice President | Government Policy | AmerisourceBergen Corporation

Rita Norton
Senior Vice President | Government and Public Policy | AmerisourceBergen Corporation

Ana Stojanovska
Vice President | Reimbursement & Policy Insights | Xcenda

CONTRIBUTING AUTHORS:

Milda Kaitz | Scott Shields | Diane Smith | Jennifer Snow | Aileen Soper | Stephen Wilson

PRODUCTION:

Laurie Kozbelt | Ellen Olson | Tia O’Brien

HPW Rebuild

 

Jan. 12, 2018

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