National and state-level provider groups express concern over Part B step therapy requirement.

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Sept. 14, 2018


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Step Off: Provider Groups Respond to MA Changes


Last week, the American Medical Association (AMA) and nearly 100 national and state-level provider groups issued a letter to the Centers for Medicare & Medicaid Services (CMS) in response to the recent policy change allowing Medicare Advantage (MA) plans to implement step therapy requirements on Part B drugs beginning in 2019 (discussed in the August 10 issue of Health Policy Weekly). In the letter to CMS, the AMA and other stakeholders raise concern over the impact of imposing step therapy requirements on vulnerable Medicare beneficiaries with chronic, disabling, and terminal illnesses.

The provider groups believe the reversal of the 2012 policy prohibiting MA plans from imposing step therapy on Part B drugs infringes on the provider-patient treatment decision process by requiring a patient to step through, or “fail first,” a course of therapy that may otherwise not have been selected by the provider and patient. The AMA cites the uncertainty in how the policy defines “new prescriptions” and expresses concern over denials or delays in access when courses of therapy span several weeks, thus creating the possibility of a denial to continue treatment. Additionally, they note there is no existing central resource for provider offices to quickly gather information on step therapy requirements for MA plans, creating another administrative burden that could delay access to treatment.

While the AMA and physician groups stated they understood the intent of the policy and appreciated the Administration’s commitment to addressing the increasing cost of physician-administered prescription drugs, the AMA indicated it does not support a policy change that may inappropriately change the course of treatment or delay access to a preferred treatment for Medicare beneficiaries.

While the policy could favor lower-cost therapies that may be appropriate for some patients, the additional administrative burden, impact to provider and patient treatment decisions, and potential delays in access to the most appropriate course of therapy due to step therapy may increase healthcare costs that may not offset any benefit to MA plans requiring this utilization management technique. Manufacturers should consider assessing the competitive landscape of their products to understand how they may be impacted should the policy remain effective for 2019.


Navigating the Complex Reimbursement and Policy Landscape of Healthcare Access

In a Q&A with Pharmaceutical Executive, Xcenda President Kristine Flemister, PharmD, and Lash Group President Tommy Bramley, PhD, examined today’s increasingly complex healthcare environment and highlighted how both companies work in unison to enhance patient access and affordability. Read now >



HPW Rebuild


Rush Season: Flurry of Legislation Ahead of Mid-Terms


Representatives returned from recess and passed a flurry of health-related bills this week by the full House and various committees.

The full House approved the following bills.

  • Local Coverage Determination Clarification Act of 2018 (HR 3635), to establish transparency, certainty, and consistency for Medicare beneficiaries and providers by improving the process through which Medicare Administrative Contractors (MACs) make local coverage determinations (LCDs), such as requiring MACs to publicly post proposed LCDs online
  • Empowering Seniors’ Enrollment Decision Act of 2018 (HR 6662), to codify the Special Enrollment Period offered to Medicare Cost Plan enrollees in regulation; it also clarifies that Medicare Cost Plans have the authority to deem their existing enrollees into a new MA plan in future plan years
  • Fighting Fraud to Protect Care for Seniors Act of 2018 (HR 6690), to establish a 3-year pilot program to test the use of smart-card technology to strengthen the integrity of the Medicare program
  • Comprehensive Care for Seniors Act of 2018 (HR 6561), to direct the Secretary of Health and Human Services (HHS) to finalize proposed Programs of All-Inclusive Care for the Elderly (PACE) regulations while providing flexibility to make updates or changes as needed

The following bills passed out of the Energy and Commerce Health Subcommittee and are expected to be considered by the full committee in the coming weeks:

  • A discussion draft to provide the Medicare Payment Advisory Commission (MedPAC) with access to certain drug rebate information
  • Ensuring Medicaid Provides Opportunities for Widespread Equity, Resources, and Care Act (EMPOWER Care Act, S 2227) to extend the Money Follows the Person demonstration in Medicaid for 5 years
  • A discussion draft to codify the CMS-operated Healthcare Fraud Prevention Partnership

Pharmacy Gag Clause Bills

The House Energy and Commerce Committee approved Know the Cost Act of 2018 (HR 6733) that would ban pharmacy gag clauses that prevent pharmacists from informing Medicare and private-insurance customers if they could save money paying out of pocket for their drugs instead of using their insurance benefits. The bill’s next step is a vote by the full House.

A similar bill in the Senate, Patient Right to Know Drug Prices Act (S 2554), targets gag clauses in private and exchange plans and will likely come up for a vote next week. A companion proposal to ban gag clauses in MA and Part D plans, Know the Lowest Price Act of 2018 (S 2553), was passed by the Senate earlier this month.


Legislative Bytes

  • Senators and Representatives working on a massive spending bill for the Departments of HHS, Labor, Defense, and Education (Department of Defense and Labor, Health and Human Services, and Education Appropriations Act of 2019, HR 6157) removed bipartisan language that would have required drug companies to disclose product prices in advertisements. The bill was approved by the House and Senate last night.
  • The House Energy and Commerce Health Subcommittee held a hearing, Examining Barriers to Expanding Innovative, Value-Based Care in Medicare.

HPW Rebuild


Another Chip at the Old Block: Hardship Exemptions


On Wednesday, CMS released guidance for taxpayers to opt out of the individual mandate in the Affordable Care Act (ACA) in 2018 or pay a fine. An individual with an eligible hardship will not be required to have health insurance for at least the month before, the month(s) during, and the month after the extenuating circumstance.

For tax year 2018, no written documentation or explanation will be needed to file an exemption if taxpayers are impacted by a fire, flood, or other natural disaster, or experience hard times, such as bankruptcy or homelessness. However, CMS urges taxpayers to maintain records in case they are audited and the Internal Revenue Service determines that they owe either $695 per person or 2.5% of income, depending on which is higher.

The CMS press release notes that as a result of the budget signed by President Trump last December for fiscal year 2018, as of January 1, 2019, the tax penalty for noncompliance with the individual mandate will be eliminated.

The exemption guidance reflects President Trump’s first Executive Order, where he directed agencies to minimize the unwarranted economic and regulatory burdens of the ACA.


YADPM (Yet Another Drug-Payment Model)*: Reference Pricing


On Monday, the Commonwealth Fund released an issue brief describing reference pricing and its potential application in the US. In this model, the insurer or employer sets a maximum contribution toward a drug, and patients pay the remaining amount which varies based on the drug’s price. The goal is to motivate patients to be cost conscious about their treatment options.

With the increasing and variable pricing for drugs and treatments, the author sees a need to motivate price-conscious consumer choice and evaluates reference pricing as an alternative model. Although used in Germany and other European nations, reference pricing has only been piloted with certain surgical and diagnostic procedures in the US, and with a few self-insurance models.  

Although it may offer cost savings and benefits, reference pricing also brings limitations. To be effective, reference pricing requires up-to-date information on pharmaceutical pricing, quality, and comparative effectiveness across a range of products—information that is typically unavailable, incomplete, and difficult to obtain.

To be effective in influencing cost-conscious choices by patients and system-wide savings, the author asserts reference pricing needs to be embedded in the entire course of care, as opposed to targeting individual components of care such as drugs, tests, and procedures. Additionally, whether and how pharmacy benefit managers (PBMs) incorporate reference pricing into their strategy and offerings will impact the adoption of the model.

Interestingly, while the Trump Administration’s Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs requested information on a variety of reimbursement approaches for drugs, it did not specifically address reference pricing. Given the Administration’s willingness to explore alternative payment methodologies for drugs, we may yet see a request for information (RFI) about reference pricing.

*Editor’s Note: Yes, we made this up. If there were a policy version of the Urban Dictionary, this might have a shot.


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:


“I think it is a moral requirement to make money when you can…to sell the product for the highest price.”

– Nirmal Mulye, Nostrum Laboratories Chief Executive, defending increasing the price of a bottle of nitrofurantoin from $474.75 to $2,392.00


“…[T]here’s no moral imperative to price gouge and take advantage of patients. FDA will continue to promote competition so speculators and those with no regard to public health consequences can’t take advantage of patients who need medicine.”

– FDA Commissioner Scott Gottlieb, criticizing Nostrum’s price increase of nitrofurantoin



8.8% | 28.5 Million


In 2017, 8.8% of people, or 28.5 million, did not have health insurance at any point during the year. The uninsured rate and number of uninsured in 2017 were not statistically different from 2016 (8.8%, 28.1 million).

Source: “Health Insurance Coverage in the United States: 2017,” Census Bureau, September 12


Xcenda Fellowship and Student Programs Webinar


Live Webinar: Sept. 25, Oct. 17, or Nov. 8

Learn more information about our various student programs including PharmD rotations, summer internships, and fellowships. Xcenda will be hosting 3 live webinars for students who are interested in opportunities in the managed care or healthcare/biotech consulting fields. Register now >

To learn more about Xcenda’s student programs, click here.




AMCP 2018 Nexus

October 22–25 | Orlando, FL
Xcenda is proud to support AMCP at this year’s AMCP Nexus conference in Orlando. Meet with Xcenda’s team of experts and consultants at booth #407. Students are also welcome to join our team at the Residency and Fellowship Showcase on Wednesday, October 24, 5:00–8:00 PM ET. 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 | Commercial Consulting | Xcenda


Jenna Kappel | Katherine Bridges Maness | Reeya Patel | Scott Shields


Laurie Kozbelt | Ellen Olson


Sept. 14, 2018


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