Republicans offer a 19-page briefing document that outlines key ACA replacement items.

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Feb. 17, 2017

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FEATURED STORY
 

It’s 10 O’clock—Do You Know Where Your Repeal Is?

 
 

House Republicans held a closed-door meeting yesterday to discuss ongoing plans to repeal and replace the Affordable Care Act (ACA). A 19-page briefing document was provided to ensure the caucus understood where the party stands on the impact of the ACA, ongoing efforts to change healthcare, and the main principles of its replacement. This briefing has been drafted into legislative language and sent to the Congressional Budget Office (CBO) for scoring.

The legislative package repeals most of the ACA and contains the following replacement items:

  1. Revised tax credit for the purchase of health coverage based on age, not income
  2. Funds to states to help cover high-risk or high-cost individuals
  3. Expanded health savings accounts
  4. Medicaid reforms that would devolve funding to the states via per-capital allotment or a block grant at a state’s discretion

According to our sources, the package of bills would go to the House Energy & Commerce and Ways & Means committees as early as the week of February 27. Assuming the committees pass the bills, the House Budget Committee will aggregate the package into 1 bill and bring to a floor vote as early as the week of March 12. If the House passes the bill, it might bypass Senate committees for immediate floor consideration.

This aggressive, coordinated approach stands in contrast to press accounts of Republican squabbling among members and caucuses over the particulars of the replacement plan—and this dissension is before the CBO has even attached budget amounts to the various provisions. Which is true—the press account or the Republican account? The votes will tell. One thing is for certain: if this were easy to do, it would have been packaged and proposed sometime in the last 6 years of more than 60 repeal votes.

 

Xcenda’s Amy Duhig, PhD, Joins Panel of Experts on Proactive Communication of HCEI at DIA’s Advertising and Promotion Regulatory Affairs Conference

 
 

February 23–24 | Washington DC

As the US healthcare system evolves to increasingly focus on quality and improved patient outcomes, and as medical science becomes more complex and personalized, the need for timely and proactive communication between biopharmaceutical manufacturers and population health decision makers about healthcare economic information (HCEI) is critical for the successful shift to a value-driven system.

Join Amy Duhig, PhD, Senior Director, Outcomes Research at Xcenda, as she provides perspective on why access to HCEI is critical to improved care for patients and discusses possible solutions to enable better and more timely communications between biopharmaceutical manufacturers and population health decision makers. Learn more

 
 

 

 
LEGISLATIVE UPDATE
 

Senators on Both Sides of Aisle Take Aim at Drug Prices

 
 

Sen. Al Franken (D-MN) recently introduced a bill that, if signed into law, would require the Secretary of Health and Human Services (HHS) to negotiate drug prices for medications covered by Medicare Part D with a goal of lowering costs. The bill, S. 348, has been referred to the Senate Finance Committee.

Franken wants to give HHS the authority to push for lower drug prices from manufacturers, rather than leaving that task to negotiations between manufacturers and Part D plan sponsors. He cites research claiming the federal government could save $16–$24 billion annually if it paid for Part D drugs at the rates paid by Medicaid or the Veterans Health Administration. The legislation specifically targets “specialty drugs, drugs that account for high levels of spending, and those with dramatic price spikes.” It would also require HHS to test various drug-negotiation models based on value-based purchasing arrangements, including: discounting or eliminating patient cost-sharing on “high-value” drugs and biologicals, value-based formularies, indication-specific pricing, reference pricing, risk-sharing agreements based on outcomes, pricing based on comparative effectiveness, and episode-based payments.

In another attempt to tackle drug prices, earlier this week, Senators Chuck Grassley (R-IA), John McCain (R-AZ), and Amy Klobuchar (D-MN) sent a letter to newly confirmed HHS Secretary Tom Price urging him to use the department’s authority to certify the importation of prescription drugs from Canada under specific circumstances. Though a number of legislative proposals addressing importation have been introduced this Congress, this week’s bi-partisan letter to Secretary Price is the first such initiative calling for administrative action to allow importation at a relatively broad level.

During his tenure in Congress, (then Representative) Price voted against legislative proposals allowing importation. However, increased calls for action and equivocal statements from President Trump on drug prices require close attention.

And, in related news, Grassley announced he was investigating possible misuses of the orphan drug program and how that might affect drug prices. Grassley points to a recent Kaiser Health News report alleging that some manufacturers have manipulated the rules of the Orphan Drug Act to maximize profits and to protect niche markets for drugs that are commonly prescribed, even reaching blockbuster status. The orphan drug program was created to encourage innovation in development of therapies for diseases affecting fewer than 200,000 people. “My staff is meeting with interested groups and other Senate staff to get their views on the extent of the problem and how we might fix it,” Grassley said in his statement.

 
REGULATORY UPDATES
 

D. I. R. Because Who Can Pronounce Remuneration

 
 

Editor’s Note: You know those policy things you mean to learn but put off because, well, you have a to-do list? Take the time to learn this one. It is going to keep coming up. Plus, you’ll look good dropping it into conversations.

The Centers for Medicare & Medicaid Services (CMS) recently released a report on the impact of higher levels of Direct and Indirect Remuneration (DIR) in the Medicare Part D program. The CMS fact sheet describes both advantages and disadvantages of this growing trend on the Medicare Part D program.

DIR is additional compensation received by a Medicare Part D sponsor, or its pharmacy benefits manager (PBM), after the point-of-sale of a drug. Examples include rebates from manufacturers and concessions paid by pharmacies. From 2010 to 2015, DIR has grown at a faster pace compared to Part D drug costs (ie, total DIR has grown 22% per year compared to 12% per year for total Part D drug costs). This growing trend has resulted in:

  • Higher beneficiary out-of-pocket spending: Cost-sharing for beneficiaries is based on the point-of-sale drug price. Since DIR is applied after the point-of-sale, higher DIR means higher out-of-pocket spending for beneficiaries.
  • Lowered plan liability: Higher DIR can also result in beneficiaries progressing faster through the Part D drug benefit. Since plans are responsible for only 15% of the costs in the catastrophic phase, higher DIR means lowered plan liability. Medicare is responsible for 80% in the catastrophic phase.
  • Stabilized beneficiary premiums: DIR received after the point-of-sale is a component in the calculation of beneficiary premiums. Higher DIR reduces the pressure on beneficiary premiums, allowing beneficiary premiums to moderate in recent years.

The country’s largest PBM, Express Scripts, issued a press release not only stating that DIR fees lower costs but also going a step further claiming that “DIR fees improve quality…by holding pharmacies accountable for achieving quality metrics.”

Pharmacy organizations, on the other hand, used the report to criticize DIR fees. The National Community Pharmacy Association offered a blistering rebuke, stating “DIR fees have wreaked havoc on independent community pharmacies and their ability to continue serving patients. These fees…blow a hole in community pharmacy operating budgets that is difficult to mend.”

CMS now decides whether the impact on beneficiary cost-sharing and Medicare liability is sufficiently offsetting to change the Part D payment rules, with the end result of pleasing some constituencies and angering others. But here’s the punchline: some pharmaceutical manufacturers may be increasing drug prices, but it often corresponds with bigger rebates that are going to plans that are using it to keep premiums stable while the point-of-sale price for beneficiaries is based on a higher price pre-rebate. It’s a trade-off for sure, and one that benefits some more than others.

 

Goose-Gander Correlation Not Clear: ACA Proposed Rules Released

 
 

On Wednesday, 5 days after Tom Price was confirmed as head of HHS, CMS released a proposed rule to “Increase Patients’ Health Insurance Choices for 2018.”

The proposed rule sets out a number of reforms intended to “stabilize” the individual and small-group health insurance markets through changes in the special enrollment periods (SEPs), the annual open enrollment period, guaranteed availability, network adequacy rules, essential community providers, and actuarial value requirements. Plan sponsors welcomed the news, but other groups believe the proposed changes could discourage healthy beneficiaries from enrolling. Then again, if plans aren’t there to offer options, it doesn’t help anyone. Just this week, Humana announced it was pulling out of the exchanges for 2018 (see related story in this issue), and Aetna is also hinting it might stop playing in this space.

In summary:

  • SEPs: Always a sticky wicket with plans, the rule proposes to require beneficiaries to prove they qualify for the SEP, but it could also encourage year-round enrollment. In addition, the rule proposes limits on which types of SEPs could change metal levels during the year.
  • Annual open enrollment: The rule proposes shortening open enrollment to 45 days from November 1 to December 15, rather than the 3-month window used to date.
  • Guaranteed availability: Because it is possible now to “game” the system to have coverage but not pay the premiums for 90 days, the rule proposes that plans can collect unpaid premiums from members when they enroll with the same issuer again.
  • Network adequacy: The proposed rule defers to states to determine network adequacy.
  • Essential community providers (ECPs): Rather than the current 30% ECP requirement, the proposed rule would require plans to have only 20% of ECPs in their networks.
  • Actuarial value requirements: The rule proposes to expand the actuarial-value variation around the metal ratings from +/-2% to +2/-4% (eg, a silver plan, with an actuarial value of 70%, could expand its range from 68%–72% to 66%–72%).

Though the administration and multiple payers claim the Marketplaces are already in a death spiral, proponents of the ACA question whether these proposed changes would independently cause (or further) a death spiral by discouraging healthier individuals from enrolling. Supporters believe healthier individuals may see the applications and verification required for the SEP as burdensome and they might miss a 45-day window to enroll, whereas sicker individuals could be waiting for these time periods and be sure not to miss them. Given that final rules need to come out ASAP for 2018, CMS abbreviated the comment period to only 20 days.

Further adding to the market destabilization, the US Internal Revenue Service this week announced it will no longer require tax filers to indicate whether they had health coverage or paid a penalty set under the ACA. In a statement on its website announcing this change, “The IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.”

 

Pharma Industry Petitions FDA to Stop Rule Affecting Off-Label Use

 
 

Last week, the Pharmaceutical Research and Manufacturers of America (PhRMA), the Biotechnology Innovation Organization (BIO), and the Medical Information Working Group (MIWG) submitted a petition to the Food and Drug Administration (FDA) requesting a stay and reconsideration of a final rule, published in January, which amended regulations regarding a drug or device’s “intended use.” The final rule revised the definition of “intended use” to include the “totality of evidence,” which contradicts current legal standards allowing manufacturers to be aware of and communicate evidence that results in the sale, prescribing, and treatment with a drug for an off-label use. By including “totality of evidence,” the petitioners believe the FDA would be able to consider any information as evidence of off-label usage, including production scaling and scientific communication about off-label use.

Opponents of the final rule argue the expanded definition broadens the terms for which manufacturers may be prosecuted for misbranding drugs.

The petition states the amendments to the regulations for “intended use” included in the final rule were not included in the proposed rule released in September 2015, and effectively circumvent the public comment period and the opportunity for stakeholder feedback. While it has been speculated there were political motivations for finalizing the rule in January, the White House’s regulatory freeze has prevented implementation of the rule until March 21.

The FDA has yet to respond with updated guidance per the petitioners’ request.

 

CMS Issues Health Spending Projections Based on ‘Current Law’

 
 

On Wednesday, Health Affairs published a report on projected national health expenditures (NHE) from 2016 to 2025. The report was authored by CMS’ Office of the Actuary (OACT).

Over the next 10 years, the OACT expects NHE growth to average 5.6% annually, which would exceed projected growth in gross domestic product (GDP) by 1.2 percentage points. This would cause the health share of the GDP to rise from 17.8% in 2015 to 19.9% by 2025. Faster growth in medical prices will drive the NHE growth, mitigated by slowing growth in the use and intensity of medical goods and services.

Projected average spending growth for retail prescription drugs, at 6.3%, is expected to slightly outpace overall NHE growth. The authors expect higher spending on specialty drugs to be somewhat mitigated by the share of generic drugs to increase slowly throughout the projection period.

The authors were careful to note that their projections are constructed using a “current-law framework” and do not assume potential legislative changes over the projection period, nor do they attempt to speculate on possible deviations from current law. Given the halting progress of the Republicans to repeal and replace the ACA, health expenditures could be radically different over the next 10 years.

 

On Valentine’s Day, Humana Breaks up With the ACA and Aetna

 
 

During an investor call Tuesday, Humana announced the mutual termination of its merger agreement with Aetna, and that it plans to exit the state exchange markets.

As discussed last month in Health Policy Weekly, a US District Court judge granted a Department of Justice request to enjoin the merger between the 2 insurer goliaths, citing antitrust grounds. Under the terms of the merger agreement, Humana is entitled to a breakup fee of $1 billion from Aetna, or approximately $630 million, net of tax.

During the call, Humana dropped news of another breakup: it was exiting the healthcare exchange market after this year, due to concerns about the market’s risk pool and its determination the business will not stabilize over the next year. It expects to lose $45 million in that market this year.

Humana is the first major national insurer to exit the entire federal marketplace. The company currently sells individual plans to about 150,000 consumers in 11 states and said it would continue to serve those members through the end of the year.

 

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:

  • Seema Verma appeared before the Senate Finance Committee for a confirmation hearing to be CMS Administrator.
  • Molina Healthcare informed investors that it lost $110 million in the last quarter due to the health insurance exchanges, and it offered a number of potential remedies.
  • Vermont Governor Phil Scott (R) announced a new Medicaid pilot program.
 

Hub and SPP Model Optimization Conference

 
 

February 22–24  |  Philadelphia, PA

Since its inception less than 5 years ago, CBI’s Hub & SPP Model Optimization Conference has become the “must-attend” event focused on helping manufacturers prepare to launch, transition, or reboot Hub services.

Lash Group’s Tony Martin, Senior Vice President of Client Strategy, will focus on what manufacturers should consider in their decision-making process when choosing a Hub vs a Specialty Pharmacy, and the strengths of each when looking at a specialty product’s life cycle. Tony will explore key questions and considerations for the “right” approach for your product. Learn more

 
 

 

 
HEARD ON THE STREET
 

“As president, Trump’s early moves—with some exceptions—have been marked by poor judgment, botched execution, hubris among some advisers, and a climate of fear and disorder all around.”

– Dan Balz, Washington Chief Correspondent, The Washington Post

Source: “In the early weeks of the new administration, the humbling of a president,” The Washington Post, February 14
 
POLICY BY NUMBERS
 

$800 Million

 

Cleveland Clinic’s employee suggestions to cut costs and increase efficiency helped the hospital system save about $200 million each year for the past 4 years, which has helped offset declining reimbursement.

Source: “Cleveland Clinic CEO Toby Cosgrove reports rough financial year for hospital in 2016,” Cleveland.com, February 15

 
UPCOMING MEETINGS & CONFERENCES
 

MGMA 2017 Financial Management and Payer Contracting Conference

February 19–21 l Las Vegas
The MGMA Financial Management and Payer Contracting Conference brings together medical practice management professionals for the financial education that is essential to leading their organizations. Whether you’re new to practice management or you’ve been in the field for several years, building your financial acumen is essential to enhancing your practice’s operations and improving its performance. Meet Xcenda consultants at booth #403. Learn more

 

CBI 18th Annual Patient Assistance & Access Programs

March 16–17 l Baltimore, MD
Join AmerisourceBergen companies, Lash Group and Xcenda, at the premier conference for patient assistance and access programs. Tracy Foster, President of Lash Group, presents the keynote address titled, “Navigating Out of the Grey of Patient Support Services.” Learn more

 

AMCP Webinar: Driving Value and Outcomes in Oncology

March 22 l Webinar
Kellie Meyer, PharmD, MPH, Senior Director of Global Health Economics, joins a panel of experts for a live webinar discussing the proceedings of a recent AMCP Partnership Forum titled, “Driving Value and Outcomes in Oncology.” Forum stakeholders will share the ideas and concepts discussed at the forum to help sort through a wave of new oncology products coming to market each year. Register now

 

AMCP 2017 Annual Meeting & Expo

March 27–30 l Denver, CO
Join leaders from AmerisourceBergen, US Bioservices, and Xcenda for the 29th Annual AMCP Meeting & Expo at booth #513. Learn more about the integrated solutions and insights that will drive success across healthcare delivery. Learn more

 

Asembia Specialty Pharmacy Summit 2017

April 30–May 3 l Las Vegas, NV
Join Xcenda at the largest US conference for specialty pharmacy. Matt Sarnes, PharmD, Senior Vice President of Commercial Consulting at Xcenda, will present, “The Future of FDAMA 114—How Will It Impact Access to Specialty Therapies?” 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

Loreen Brown, LMSW
Senior Vice President | Product, Strategy & Commercialization Excellence | Lash 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:

Maureen Holmes | Jennifer Le | Katherine Bridges Maness | Scott Shields | Jennifer Snow Aileen Soper

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

Feb. 17, 2017

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