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Aug. 4, 2017

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FEATURED STORY
 

Is ACA Repeal as Likely as Spotting Nessie or Bigfoot?

 
 

July started off with a bang, with Independence Day weekend festivities, but ended with a whimper in terms of Affordable Care Act (ACA) repeal. Despite a week’s long effort, healthcare reform has become the party’s albatross.

For now, it appears the Senate is going to table any further votes on healthcare reform. However, some action may be required sooner than expected as President Donald Trump threatened to end cost-sharing reduction (CSR) payments in the health insurance exchanges (HIXs) last weekend. CSR payments go directly to health insurance companies and reduce the cost-sharing responsibility for those enrolled in exchange plans earning less than 250% of the federal poverty level. Insurance companies have already said that, if the CSR payments end, they will raise premiums an additional 11%–20% beyond what they have tentatively requested.

In terms of next steps, members of the Senate Committee on Health, Education, Labor, and Pensions (HELP), chaired by Sen. Lamar Alexander (R-TN), are preparing for bipartisan hearings on temporary assistance to the ACA marketplaces and to prevent premiums from spiking in 2018. Hearings are set to begin after Labor Day, on September 4.

President Trump has repeatedly said he wants to see the ACA “fail” and that Democrats need to concede and work with Republican lawmakers, as they have been unwavering in their opposition to GOP reform efforts. Ending CSR payments could be a strategic move triggering a collapse of ACA marketplaces—and millions without affordable insurance. This could be a huge gamble for the President, and time will tell what is decided.

In the meantime, the rest of the Senate is moving on to other agenda items, such as tax reform, that were postponed to allow for healthcare reform and will let the ACA continue to flounder along, awaiting its fate.

 
XCENDA AND BIOSIMILARS FORUM PARTNER ON ORIGINAL RESEARCH
 

Biosimilar Coding—Could There Be Billions in Hidden Savings?

 
 

In November 2015, the Centers for Medicare & Medicaid Services (CMS) finalized a controversial Medicare payment rule for biosimilars: all biosimilars relative to the same reference product will share the same Healthcare Common Procedure Coding System (HCPCS) code and payment rate, separate from the reference product. This creates a single, blended Medicare reimbursement rate for the biosimilars based on the average sales price (ASP) of all biosimilars to a reference product, plus 6% of the ASP for the reference biologic. Under current policy, reference products will still maintain their separate HCPCS codes and individual ASPs.
 
Xcenda, working with the Biosimilars Forum, modeled alternative methodologies. While CMS’ policy is estimated to save the Medicare program $25.0 billion over 10 years, an alternative coding policy, which would provide each biosimilar with its own billing code and separate payment rate, could increase savings by an additional $6.3 billion, or 25% ($31.3 billion in total over 10 years). A separate coding and payment policy could provide larger savings to the Medicare program, as it could encourage greater price competition and uptake of biosimilar products in the marketplace, representing a win for patients and payers.

The study comes at a fortuitous time, as CMS announced just last month in the Medicare Physician Fee Schedule (MPFS) proposed rule it was revisiting the biosimilars coding and payment policy.

 

Tap Into Payer Market Insights This October in Dallas

 
 

MCN Forum | Monday, October 16 | Dallas

Join Xcenda’s Payer Insights team this October in Dallas, TX and get exclusive access to payer insights at Xcenda’s Managed Care Network (MCN) Forum. Gain real-time, truly interactive qualitative and quantitative insights from up to 30+ payers from across the managed care industry.

Start a conversation to learn more or to schedule your time with this insightful group.

 

 
 

 
 
LEGISLATIVE UPDATE
 

Data Data Everywhere, Not a Drop to Coordinate

 
 

Last week, Rep. Lynn Jenkins (R-KS) and Rep. Mike Thompson (D-CA) introduced HR 3447, the Furthering Access to Coordinated Treatment for Seniors Act (FACTS Act). The FACTS Act would establish a process permitting Medicare Part D prescription drug plans (PDPs) to request Medicare Parts A and B claims data to promote the appropriate use of medications.

The bill’s authors state their intent is to improve outcomes by ensuring patients take medications as prescribed and ultimately save tax dollars. Under HR 3447, PDP sponsors would not be allowed to use the data to:

  • Inform coverage determinations under this part
  • Conduct retroactive reviews of medically accepted indications determinations
  • Facilitate enrollment changes to a different PDP or an MA-PD plan offered by the same parent organization
  • Inform marketing of benefits

A frequent criticism of the Medicare Part D program is that PDPs are too siloed to be able to take full advantage of data from Parts A and B, and vice versa. This isolation can lead to patients receiving care that is fragmented and, therefore, inefficient and less effective. The FACTS Act might provide an opportunity to streamline care for beneficiaries currently using PDPs.

HR 3447 has been referred to the Committee on Energy and Commerce.

 

Amanda Forys Speaks to AJMC on Reimbursement Models and Formulary Placement Strategies for Biosimilars

 
 

Xcenda’s Amanda Forys, MSPH, Director of Reimbursement Policy Insights, speaks with the American Journal of Managed Care (AJMC) and discusses reimbursement models and formulary placement strategies for biosimilar products. Ms. Forys provides insights on how biosimilar products can affect the development of new reimbursement models and formulary placement strategies as more people become educated on biosimilars. Learn more

 

  

 
REGULATORY UPDATES
 

DSHing Out the Latest: IPPS Final Rule Released

 
 

On Wednesday, CMS released the fiscal year (FY) 2018 final rule for the Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Prospective Payment System. This update addresses the IPPS portion of the final rule.

Proposed Payment Changes and Updates
CMS projects a total increase in IPPS operating payments of 2.0%, down from the estimated 2.9% increase from the proposed rule. Other payment adjustments include continued penalties for excess readmissions, a continued 1% penalty for hospitals in the worst-performing quartile under the Hospital Acquired Condition Reduction Program, and continued upward and downward adjustments under the Hospital Value-Based Purchasing Program.

Medicare Disproportionate Share Hospital (DSH) Payments
CMS finalized its proposal to use data from its National Health Expenditure Accounts instead of data from the Congressional Budget Office (CBO) to estimate the percent change in the rate of those without insurance. These data are used to determine the total amount of uncompensated care payments available to Medicare DSHs. CMS is increasing payments to DSHs by $800 million in FY 2018, down from a $1 billion increase it estimated in the proposed rule.

FY 2018 Status of Technologies Approved for FY 2017 Add-On Payments
CMS approved 9 technologies for add-on payments in FY 2017. Below is their add-on payment status for FY 2018:


FY 2018 Add-On Payments for New Services and Technologies
While it received 9 applications for new technology add-on payments for FY 2018, CMS did not consider the 6 technologies below for the following reasons:

  • 3 applicants withdrew their applications before the proposed rule was issued
  • 2 applicants, Kite Pharma and IsoRay Medical (in conjunction with GammaTile), withdrew their applications for KTE-C19 (axicabtagene ciloleucel) and GammaTile™, respectively, before CMS issued the final rule
  • 1 applicant, Celator Pharmaceuticals, did not receive Food and Drug Administration (FDA) approval for its technology, VYXEOS™ (cytarabine and daunorubicin liposome injection), by the July 1, 2017 deadline

Below is the FY 2018 add-on payment status for the remaining 3 technologies. (The EDWARDS INTUITY Elite™ Valve System and Perceval Valve are both prosthetic aortic valves inserted using surgical aortic valve replacement, so CMS considers them as a single technology.)


Hospital-Acquired Conditions (HAC) Reduction Program
CMS is finalizing 2 changes to existing HAC Reduction Program policies:
1. Specifying the dates of the data period used to calculate hospital performance for the FY 2020 HAC Reduction Program
2. Updating the Extraordinary Circumstance Exception policy

Hospital Readmissions Reduction Program (HRRP)
CMS is implementing changes to the payment adjustment factor in accordance with the 21st Century Cures Act. CMS will assess penalties based on a hospital’s performance relative to other hospitals with a similar proportion of patients who are dually eligible for Medicare and full-benefit Medicaid. This has long been a concern for many hospitals that feel their population has a patient mix that puts them at a disadvantage for the HRRP.

Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs
For 2018, CMS is finalizing the modification to the EHR reporting periods for new and returning participants attesting to CMS or their state Medicaid agency from the full year to a minimum of any continuous 90-day period during the calendar year.

CMS Administrator Seema Verma reiterated the Trump Administration’s promise of deregulation in the press release accompanying the final rule: “This final rule will help provide flexibility for acute and long-term care hospitals as they care for Medicare’s sickest patients. Burden reduction and payment rate increases for acute care hospitals and long-term care hospitals will help ensure those suffering from severe injuries and illnesses have access to the care they need.”

The final rule is scheduled to be published in the Federal Register’s August 14 issue. The changes will affect discharges occurring on or after October 1, 2017. Interested parties can also review the final rule’s fact sheet.

 
 

Think the Mercury Is High? Check Out Projected Exchange Premium Increases

 
 

As Health Policy Weekly noted in June, 45 US counties are expected to be without insurers for the HIXs effective next year.

Current data released from CMS last week projects:

  • 9 states with only a single carrier (AK, AL, DE, IA, MS, NE, OK, SC, and WY)
  • 40 counties projected to have no carriers
  • 1,332 counties projected to have 1 carrier
  • 27,660 exchange participants projected without coverage
  • 2,344,592 exchange participants projected without choices

These projections, however, do not include the likelihood of these figures being higher by the end of the year. The lack of federal assurances over funding the $8 billion in annual subsidies and the general lack of federal support for the program is causing instability and pushing insurers to exit the markets or raise rates to make up for that uncertainty.

Anthem, Cigna, Health Care Service Corp, and Molina Healthcare have all indicated they will reserve their right to continue mulling over withdrawing from markets up until the September 27 participation deadline. And this week, Anthem made big news in California by announcing it was pulling back its offerings in the state.

Other payers are resigned to substantial 2018 rate increases. Blue Cross Blue Shield of Michigan anticipates individual averages of 27% and network averages of 14% with federal assistance; without it, rates will only climb higher. Covered California announced this week that premiums on the state exchange will increase an average of 12.5% next year if the Trump Administration continues to pay key cost-sharing insurance subsidies; if the cost-sharing payments stop, however, premiums will rise another 12.4% on benchmark silver-tiered plans.

 

The Largest PBMs Are Throwing Down the Gauntlet

 
 

Express Scripts and CVS Health, the country’s 2 largest pharmacy benefit managers (PBMs), released their 2018 national formularies this week. In the last couple of years, both have been clamping down on their formularies and excluding a number of drugs.

This year is no different. Express Scripts announced it will exclude an additional 64 branded drugs from its 2018 national preferred formulary, increasing the number of drugs excluded to 159. Of particular note, Express Scripts’ 2018 formulary excludes Amgen’s NEUPOGEN® (filgrastim) in favor of Novartis’ biosimilar ZARXIO® (filgrastim-sndz).

Meanwhile, CVS Health—having already excluded NEUPOGEN last year in favor of ZARXIO—made waves again this week with an outcomes-based program that will target drugs for breast cancer, non-small cell lung cancer, obesity, and chronic obstructive pulmonary disease. For each of these, manufacturers will have to cover costs over a pre-specified threshold if patients do not reach certain outcomes.

In addition to those changes, CVS Health will remove 17 products from its Standard Control Formulary in 10 drug classes starting January 1, 2018. The PBM also announced it will be making changes in the autoimmune and hepatitis C categories by mid-September. Many autoimmune drugs are obtaining a growing number of supplemental indications, making careful management of this therapeutic class critical for CVS Health to “[help] payors manage the financial impact.” New entrants are expected in the hepatitis C class, and CVS Health policy is to re-evaluate all products in a specialty class when a new product is launched.

Both Express Scripts and CVS Health are at the vanguard in aggressive formulary management by adopting biosimilars, paring their formularies of costly drugs with drugs they deem to be cheaper therapeutic equivalents, and adopting outcomes-based management of products. But with a lack of transparency into their practices, they are often questioned about whether what they are doing is best for the patient or best for their balance sheets.

 

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:

  • The Senate passed the FDA Reauthorization Act of 2017, clearing the way for the President’s signature. The bill reauthorizes the prescription drug, generic drug, medical device, and biosimilar user fee programs through 2022
  • CMS announced the average basic premium for a Medicare Part D PDP in 2018 is projected to decline to an estimated $33.50 per month, the first decline in 5 years
  • CMS approved a 5-year extension of Florida’s Managed Medical Assistance section 1115 demonstration
  • The FDA is hosting a public workshop titled, “Developing a Framework for Regulatory Use of Real-World Evidence” on September 13
  • JAMA published a study that evaluated the impact of the FDA’s priority review voucher on the development of treatments for neglected tropical diseases
 
HEARD ON THE STREET
 

“If ObamaCare is hurting people, & it is, why shouldn’t it hurt the insurance companies & why should Congress not be paying what public pays?”

 

– President Trump, via Twitter, July 31

 
POLICY BY NUMBERS
 

86%

 

A Research!America survey found 86% of Americans believe discussions about clinical trials should be a part of standard care.

Source: “Public Perception of Clinical Trials,” Research!America, July 25

 
UPCOMING MEETINGS & CONFERENCES
 

The Bioprocessing Summit

August 2125 l Boston, MA
World Courier, part of AmerisourceBergen, is proud to be a sponsor of The Bioprocessing Summit 2017. In its ninth year, the conference focuses on upstream and downstream processing, analytical development and quality, formulation and stability, cell and gene therapy production, and manufacturing. Visit World Courier at booth #308. Learn more

 

Cell & Gene Meeting on the Mesa

October 46 l LaJolla, CA
The Cell & Gene Meeting on the Mesa is a 3-day conference bringing together senior executives and top decision makers in the industry with the scientific community to advance cutting-edge research into cures. World Courier, part of AmerisourceBergen, is proud to be a Gold Sponsor of this unique event. The meeting features a nationally recognized Scientific Symposium, attended by leading researchers and clinical experts from around the globe, in conjunction with the industry’s premier annual Partnering Forum, the first event of its kind dedicated solely to facilitating connections in this sector. Learn more

 

AMCP Nexus 2017

October 1619 l Dallas, TX
Join Xcenda at this year’s AMCP Nexus 2017 conference in Dallas, TX. AMCP Nexus 2017 will explore perhaps the most transformative change taking place in healthcare: how we pay for healthcare and the emergence of value as the defining factor and goal. Xcenda’s team of experts can help you navigate the value landscape and maximize access for your product. Visit Xcenda’s booth in The Exchange at #503, or contact us to schedule a meeting at the conference. Learn more

 
 
 

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

 
 
 
 
 
FEATURED CONTRIBUTORS
 

EDITOR-IN-CHIEF:
Jennifer Snow
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 Specialty Group

Tommy Bramley, PhD, RPh
President | Xcenda

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:

Aaron Dancy | Scott Shields Jennifer SnowDebbie Stanton | Stephen Wilson 

PRODUCTION:

Laurie Kozbelt | Ellen Olson | Tia O’Brien

 

Aug. 4, 2017

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