It’s been a busy couple of weeks for CMS. We summarize the PFS proposed rule.

View as webpage.

hpw - topbar hpw - topbar - diag hpw - topbar xce

July 13, 2018


Forward to a Friend



View Archived Issues


We Got Carpal Tunnel Syndrome Going Through Rules So You Don’t Have To


Yesterday, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update the Medicare Physician Fee Schedule (PFS) for Part B services furnished on or after January 1, 2019. The rule includes proposed changes to the Medicare Shared Savings Program and the Quality Payment Program (QPP). It also had proposed updates to the Medicaid Promoting Interoperability Program.

Since Health Policy Weekly’s last issue on June 29, CMS also released the following proposed rules:

Below, we discuss our preliminary observations about the proposed rule.

WAC-Based Payment Change for Drugs
Building off the Administration’s priority of lowering drug prices, one of the most notable changes is the agency’s proposal to adopt the Medicare Payment Advisory Commission’s recommendation to reduce the Part B payment methodology for drugs paid at wholesale acquisition cost (WAC)-based methodology from WAC plus 6% to WAC plus 3%. The payment reduction will affect Part B drugs in their first 3 to 6 months on the market, after which the average sales price (ASP) plus 6% methodology supersedes it. CMS’ rationale for lowering the WAC add-on is that WAC-based payments for drugs typically exceed ASP-based payments.

Conversion Factor
CMS estimates the CY 2019 PFS conversion factor to be $36.0463, which reflects the budget-neutrality adjustment and the 0.25% update adjustment factor as specified by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).

Changes to E/M Payment
One change that could significantly reduce the amount of information that providers must submit is a proposed revamp of payment and coding for evaluation and management (E/M) visits:

  • To allow practitioners to choose to document office/outpatient E/M visits using medical decision-making or time instead of applying the current 1995 or 1997 E/M documentation guidelines, or alternatively practitioners could continue using the current framework
  • To expand current options by allowing practitioners to use time as the governing factor in selecting visit level and documenting the E/M visit, regardless of whether counseling or care coordination dominate the visit
  • To expand current options regarding the documentation of history and exam, to allow practitioners to focus their documentation on what has changed since the last visit or on pertinent items that have not changed, rather than re-documenting information, provided they review and update the previous information
  • To allow practitioners to simply review and verify certain information in the medical record that is entered by ancillary staff or the beneficiary, rather than re-entering it

CMS is also proposing new, single blended payment rates for new and established patients for office/outpatient E/M level 2 through 5 visits and a series of add-on codes to reflect resources involved in furnishing primary care and non-procedural specialty generally recognized services.

RFI for Price Transparency
Per the fiscal year 2019 Inpatient Prospective Payment System (IPPS) final rule, effective January 1, 2019, CMS is requiring hospitals to publicize their current standard charges and to update this information at least annually, or more often as appropriate. However, CMS is concerned that “challenges continue to exist for patients due to insufficient price transparency.” Therefore, the agency has issued a request for information (RFI) regarding barriers that prevent providers and suppliers from informing patients of their out-of-pocket (OOP) costs, what changes are needed to support greater transparency around patient obligations for their OOP costs, what can be done to better inform patients of these obligations, and what role providers and suppliers should play.

Bundled Episode of Care for Management and Counseling Treatment for SUDs
CMS is considering developing a separate bundled payment for an episode of care for treatment of substance-use disorders (SUDs). The agency requests comments on whether such a bundled episode-based payment would be beneficial to improve access, quality, and efficiency for SUD treatment. Additionally, CMS seeks comments on developing coding and payment for a bundled episode of care for treatment for SUDs that could include overall treatment management, any necessary counseling, and components of a medication-assisted treatment (MAT) program such as treatment planning, medication management, and observation of drug dosing.

Based on our preliminary review of the rule, the proposed changes to QPP are largely focused on: measure updates and overall attempt to reduce clinician burden; attention to outcomes; and promoting interoperability of electronic health records (EHRs). Concurrent with the rule release, CMS issued a fact sheet on the proposed changes to the QPP.

The proposed rule contains elements that should reduce regulatory burden (eg, E/M office visit changes) and should further increase the popularity of the Medicare Advantage (MA) program. Interestingly, aside from the change in WAC-based payment methodology for physician-administered drugs, the proposed rule was essentially bereft of further changes that would directly affect drug pricing and costs. The Administration may be waiting for public comments and information.

The CY 2019 PFS proposed rule is scheduled to be published in the July 27 issue of the Federal Register. Accompanying the public-inspection version of the proposed rule are a press release and fact sheet. Comments are due September 10.


Connected Health: The Next Healthcare Frontier


Digital health, also known as connected health, has a spotlight shining on it thanks to technological advances, as well as increased venture funding, over the past several years.

In this white paper, we examine the factors health technology manufacturers and healthcare firms must review for reimbursement, evidence requirements, data collection, and timing for payer stakeholder consideration.

Download now >



HPW Rebuild


C-A-P-S. Caps. Caps. Caps. Dems Cheer on Efforts to Cap Copays


On Wednesday, a coalition of House and Senate Democrats announced a bill that would place a monthly cap on OOP payments. The Capping Prescription Costs Act of 2018 would limit copayment amounts for prescription drugs to $250 per month for individuals and $500 per month for families. The limit would apply to both group health plans and individual market plans.

Given the highly charged political climate in Congress, this bill stands little chance of being enacted into law. However, the proposed legislation—introduced by Ranking Member of the Senate Finance Committee Ron Wyden (D-OR), Ranking Member of the Senate Health, Education, Labor, and Pensions Committee Patty Murray (D-WA), Sen. Bill Nelson (D-FL), Sen. Elizabeth Warren (D-MA), and Congresswoman Jacky Rosen (D-NV)—maintains the visibility of the burden of prescription drug costs, which will be a rallying cry during the midterm elections in November.


Legislative Byte

  • Senators Elizabeth Warren (D-MA) and Tina Smith (D-MN) sent letters to 9 pharmacy benefit managers and drug distributors inquiring about Health and Human Services (HHS) Secretary Alex Azar’s comments that “middlemen” stymie efforts by pharmaceutical manufacturers to lower prices.
  • The Health Care Innovation Caucus issued an RFI on value-based provider payment reform, value-based arrangements, and health IT.
  • This week, the House Energy and Commerce Subcommittee on Health held a 2-day hearing on the 340B program. Notably, Rep. Joe Barton (R-TX) issued a discussion draft of legislation that would change the formula for hospitals to qualify for 340B. The 340B Health Coalition issued an analysis that could cut the number of eligible facilities in half.

HPW Rebuild


Halt and Catch Fire to $10B in Payments to Insurers


On Saturday, CMS announced it would (at least temporarily) halt almost $10.5 billion in risk adjustment payments owed to certain insurance providers for expenses incurred in 2017, which were anticipating the payments this fall. CMS Administrator Seema Verma pointed to a federal court decision in New Mexico from February as preventing the agency from making the payments, despite an earlier, separate decision in Massachusetts that upheld the federal program.

Risk adjustment is a permanent method built into the Affordable Care Act (ACA) to help protect insurance providers from the law’s guaranteed-issue and community-rating requirements. Each year, CMS calculates which insurance companies with relatively low-cost consumers must pay into the risk-adjustment fund and which ones with more expensive customers are owed money.

Critics of the decision believe it could increase 2019 premiums and create market uncertainty as insurers decide whether to participate in the 2019 ACA marketplaces.


Docs May Catch a Waive for MA Plans


On June 29, CMS announced a demonstration project that, if approved, would waive Merit-based Incentive Payment System (MIPS) requirements for eligible clinicians participating in at-risk MA programs.

The Medicare Advantage Qualifying Payment Arrangement Incentive (MAQI) Demonstration would apply to eligible clinicians adequately involved in MA plans that resemble Advanced Alternative Payment Models (Advanced APMs). Participating clinicians may also be eligible to receive the 5% APM bonus in 2018.

Currently, eligible clinicians in risk-based MA plans must still report to MIPS. MA plans do not qualify for Advanced APM incentive payments even if the plan meets the requirements for Advanced APM inclusion unless the clinicians also participate in qualifying Medicare APMs.

“The MAQI Demonstration…aims to put Medicare Advantage on a more equal playing field with Fee-for-Service Medicare,” said CMS Administrator Seema Verma. “CMS intends to test whether MIPS exemptions provided to clinicians under MAQI will increase participation in MA plans that are similar to Advanced APMs and, thereby, accelerate the transition to a healthcare system that pays for value and outcomes.”

CMS seeks public comment on the information-collection burdens associated with the demonstration. The comment period is open for the next 60 days.

Many MA plans already require providers to meet many of the goals laid out in other Advanced APMs, such as coordinating care and managing populations in a cost-effective manner. CMS appears to be responding to the swell of stakeholders pushing MA plans to qualify as Advanced APMs. Last year, over 270 physician organizations called on CMS to adopt “fair and equitable incentives” for physicians taking risk in MA contracts with health plans.


What Makes Specialty Drug Coverage Vary?


On Monday, Health Affairs published the results of a study assessing the variation in coverage for specialty drugs across commercial health plans in the US. While variation in coverage is expected with multiple payers making independent choices regarding access, this study examines the characteristics of drugs where variation existed and how plans restrict access to their enrollees.

The authors of this study used Tufts Medical Center’s Specialty Drug Evidence and Coverage database to evaluate variation in specialty drug coverage and to examine restrictions in coverage relative to the drugs’ Food and Drug Administration (FDA)-approved indications. A total of 158 drugs were analyzed, representing 302 unique indications and 3,417 coverage decisions from 17 of the 20 largest commercial health plans in the US.

The study results indicated that 84.1% of drugs evaluated had differences in coverage across health plans. The study findings also showed that although 48.4% of coverage decisions were inconsistent with FDA indications, the degree of restriction varied significantly. Health plans were more likely to restrict coverage in drugs with the following characteristics:

  • Indicated for diseases with multiple alternatives or therapy options
  • Not indicated for cancer, orphan diseases, or pediatric populations
  • Safety concerns
  • Recently FDA approved
  • Approved through conventional review as opposed to expedited review
  • Self-administered
  • High cost/greater budget impacts

The results demonstrate that a patient’s access to particular specialty drugs is highly plan-dependent. The authors suggest the findings highlight the lack of consistency and transparency among payers in the methodology used to make coverage determinations. As patients bear greater healthcare costs, the variation in coverage and restrictions highlight the complex task payers face in formulating coverage decisions and the need for providers to consider insurance coverage in treatment decisions for their patients.


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


With a week off and the usual policy shenanigans, 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:


Experiencing Global Market Access and Reimbursement Issues for Your Product?


Reserve time now to gain expert insights from Xcenda’s Global Market Access Network (GMAN) advisors.

Advisors within Xcenda’s GMAN represent 22+ countries and have expertise with key HTA agencies. Gain from their perspective on initiatives such as specific therapeutic area insights, trial design and endpoints feedback, evidentiary requirements, price negotiations, and more. Don’t miss this insightful group in Barcelona this November.

Learn more >




“So 2 kinds of reforms are necessary: greater transparency surrounding how [340B] discounts are being used, and reforms to reduce the gap between discounted prices and the reimbursement provided, particularly by government programs….

“We…believe…the gap between prices paid by 340B entities and the compensation they receive has, in many cases, grown far too wide….

“We believe changes…are essential to the future of the 340B program. Leaving a program as it is, within the rapidly changing context of healthcare, quickly renders it outdated.”

 – HHS Secretary Alex Azar, speaking about the Administration’s areas of focus for the 340B program

Source: “Remarks to 340B Coalition Summer Meeting,” July 9





American Cancer Society epidemiologists conservatively estimated that almost one‐fourth (22%) of all cancer deaths would not occur if all Americans had the cancer death rates of college‐educated Americans, even if researchers never invent another test or treatment. That would translate to at least 134,000 lives saved in 2018 alone.

Source: “An assessment of progress in cancer control,” American Cancer Society, July 10


CBI Reimbursement and Access 2018

August 15–16  | Philadelphia, PA
Xcenda’s Corey Ford, MPH, Director of Reimbursement Strategy and Tactics, will team up with Lash Group’s Jim Dickey, Director of Product Experience, to present a session titled, “Emerging Trends in PBM Restrictions on Commercial Copay Assistance.” They will examine and discuss the emerging copay accumulator trends. 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.


Jennifer Snow
Senior Director,
Health Policy

Scott Shields
Associate Director,
Health Policy



Amy Grogg, PharmD
Senior Vice President | Commercialization Solutions | 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


Maureen Holmes | Jennifer Le | Reeya Patel | Scott Shields | Stephen Wilson


Laurie Kozbelt | Ellen Olson


July 13, 2018


Forward to a Friend



View Archived Issues



Connect with AmerisourceBergen:   I  AmerisourceBergen Insights  |   LinkedIn   I  Twitter  

Connect with Xcenda:   I   LinkedIn   I  Twitter