CMS calls for more transparency in the local coverage determination (LCD) process.

View as webpage.

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

Oct. 5, 2018


Forward to a Friend



View Archived Issues


LCD Revamp: Nerd Equivalent of Latest Fornite Battle Pass


On Wednesday, the Centers for Medicare & Medicaid Services (CMS) announced changes to the way Medicare Administrative Contractors (MACs) decide which technologies are covered in their regions, a process known as local coverage determinations (LCDs). LCDs are issued when national coverage determinations (NCDs) do not exist or when MACs need to further define an NCD.

The updated instructions, policies, and procedures, contained in chapter 13 of the Medicare Program Integrity Manual (PIM), respond to Congress’ requirement in section 4009 of the 21st Century Cures Act for a more transparent and open LCD process that meets patients’ needs. (Note that, at press time, the PIM had not been updated to reflect these changes.)

The accompanying fact sheet summarizes the following additions and revisions to the new LCD process:

  • Clear, step-by-step description of the LCD process
  • Standardized summary of clinical evidence
  • Option to request an informal meeting with the MAC to discuss potential LCD requests
  • New process by which interested parties in a MAC jurisdiction can request a new LCD
  • Restructured Contractor Advisory Committee (CAC) meetings that are now open to the public
  • More voices on CAC, including patients and non-physician health professionals
  • Open meetings in the MAC jurisdiction to present proposed coverage, including evidence and rationale of decisions
  • Proposed policies retired if not finalized within 1 year of the original posting date
  • International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) and Current Procedure Terminology (CPT) codes removed from LCDs in the future
  • MAC responses to public comments linked to the final LCD and remain in the Medicare Coverage Database indefinitely
  • LCD reconsideration process consistent with the NCD reconsideration process

Many have complained that CMS lags commercial insurers in reviewing new drugs and medical technology. The revamped NCD process, finalized in 2013, provided stakeholders with a much more transparent coverage process that offers multiple opportunities for the public to interact and request reconsideration of NCDs. The revised LCD process appears to offer many similar revisions to assist the public with contributing to the review of drugs and medical technology.


Finding the Patient Voice in ICER’s Value Assessments


Earlier this week, Xcenda released research co-authored with the Partnership to Improve Patient Care (PIPC) that examined the extent to which the Institute for Clinical and Economic Review (ICER) incorporates stakeholder input in its final assessments. Value assessment frameworks such as ICER have been criticized by patient advocacy groups for not taking into account patient perspectives when evaluating therapies. This research aimed to quantify the extent to which ICER meaningfully engages patient advocacy groups and other stakeholders through its public comment process. Xcenda developed a new methodology that systematically analyzed the degree to which stakeholder comments were acknowledged and incorporated into final ICER assessments.

Findings from the analysis indicated that ICER has formally acknowledged over 95% of comments received from stakeholders in writing since refining its process in 2017 for public comments. Despite this, ICER only incorporated 27% of all stakeholders’ comments into its final assessments. Feedback was more likely to be incorporated into final assessments when a recommended solution was provided by stakeholders and for comments specific to methodological issues, as compared to general feedback.

Input from patient advocacy groups, in particular, was half as likely to be incorporated into ICER’s final assessments compared to other stakeholders. Patient advocacy groups tended to provide comments that were less solution-oriented and less targeted relative to industry stakeholders and were most likely to comment on the adequacy of existing evidence, incorporation of the patient perspective, and ICER’s transparency.

Patient advocacy groups have expressed concern that the increased uptake of ICER’s framework by pharmacy benefit managers, such as CVS Health, state Medicaid formularies, and the Department of Veterans Affairs, poses barriers and risks limiting beneficiaries’ access to important treatments.

Xcenda’s research in collaboration with PIPC reinforced the importance of developing patient-centered value assessment frameworks and identified areas of high concern for patient advocacy groups relating to ICER’s evaluations. Further, this research highlighted the need to make evaluations and related documents, such as economic models and analysis plans, more accessible and understandable to patients and patient advocates. The results illustrated the need to refine and improve 2-way communication between patient advocacy groups and ICER throughout all stages of ICER’s evaluation process.

HPW Rebuild


Reading Between the Lines: Promoting Generic Utilization


Last week, Senators Orrin Hatch (R-UT) and Michael Bennet (D-CO) introduced S. 3519 to grant authority to the Food and Drug Administration (FDA) to update the labeling of generic drugs, including uses not reflected in the approved labeling.

Under current regulations, generic drugs must have the same labeling as the brand drug they reference. Updating the label with new safety and effectiveness information is the responsibility of the brand company, which may have little incentive to update the labeling after the patent expires. In some cases, a brand manufacturer may withdraw its drug from the market once the patent expires, causing generic versions of that drug to rely on a label that cannot be readily updated to reflect “new” uses or safety concerns.

S. 3519 would empower the FDA to determine when and what labeling changes would benefit the public. The FDA would contract with entities to review available evidence or seek public input on accepted use in clinical practice. Upon determining that labeling changes are appropriate, the FDA would notify the generic’s application holders, allowing a 30-day window to contest any labeling modifications.

Last April, FDA Commissioner Scott Gottlieb suggested that current regulations are depressing the wider usage of generics. Gottlieb further noted that the number of generics referencing discontinued or withdrawn brand drugs comprise 20% of all reference-listed drugs.

Gottlieb’s support in empowering the FDA to bring drug labels up-to-date is consistent with the Administration’s broader strategy in promoting generics.


Legislative Bytes

  • The Senate passed the final version of the sweeping opioids package (98-1 vote), featured in last week’s Health Policy Weekly, and will send it to the White House for signing into law.
  • Rep. Francis Rooney (R-FL) introduced H.R. 6958, a bill to consider the feasibility of basing reimbursement rates for Part B and Part D drugs on average prices for such drugs in Organization for Economic Cooperation and Development (OECD) member states.
  • Rep. Tom O’Halleran (D-AZ) introduced H.R. 7001, a bill to provide for a combined Part B and drug out-of-pocket costs limitation.

HPW Rebuild


Seeing the Forest for the Trees: MA and Part D Landscape Files


In their 2019 landscape announcement, CMS officials said Medicare Advantage (MA) and Part D average premiums will continue to decline, and that 2019 MA enrollment is estimated to reach 22.6 million, compared to 20.2 million in 2018.

On average, MA premiums are expected to decrease by 6% to $28.00, from $29.81 in 2018. Conversely, MA plan choices are projected to increase, and new benefits are being made available. MA will offer approximately 600 more plans in 2019, increasing the total number of plans available to 3,700, and over 91% of Medicare enrollees will have access to more than 10 MA plans.

New services that MA plans will be providing include expanded health-related supplemental programs (eg, adult day care, in-home support and caregiver support services, and home-based palliative care and therapeutic massage), reduced cost-sharing, and additional benefits for enrollees with certain conditions (eg, diabetes and congestive heart failure).

CMS anticipates monthly basic Part D premiums will fall from $33.59 to $32.50 in 2019. CMS provided state-by-state information on MA and Part D for 2019.

MA and Part D remain among the most popular and successful federal government programs. Enrollment and satisfaction have continued to increase, while premiums have remained stable since they began in 2006. That being said, there remains room for improvement, with many beneficiaries facing affordability challenges.


Looking for a Magic Pill: Oklahoma Medicaid Signs Second VBC


Last week, Oklahoma Medicaid signed its second value-based contract (VBC) for a prescription drug with Melinta Therapeutics. Although value-based contracting has become common with commercial payers, Oklahoma recently became the first state Medicaid program to win waiver approval to begin implementation of supplemental rebate agreements involving such arrangements with manufacturers.

Under the contract with Melinta for ORBACTIV (oritavancin), the state has agreed to remove the antibiotic’s prior authorization requirement. Melinta ensures the use of its comparatively expensive drug will not increase costs to Oklahoma, as—unlike other drugs used to treat bacterial skin infections—ORBACTIV does not require hospitalization for administration. Melinta will offset any increased costs through additional rebates.

Oklahoma Medicaid has initiated talks with 20 manufacturers regarding VBCs; 7 of these are engaged in ongoing conversations, and 3 are currently negotiating contracts. Smaller manufacturers, having expressed more interest in these talks, are likely more incentivized to consider such arrangements as a means to compete with their larger rivals.

A similar waiver from Massachusetts proposed introducing a closed formulary based on evidence regarding a drug’s value. While CMS declined to approve the Massachusetts waiver, value-based contracting proposals for prescription drugs are being considered by other states. According to Oklahoma Medicaid Pharmacy Director Nancy Nesser, Colorado and Michigan have contacted her office seeking guidance in developing programs similar to Oklahoma’s. Washington State’s Medicaid Director Mary Anne Lindeblad detailed the intention to move away from traditional fee-for-service models, with the goal of having 90% of services paid through value-based arrangements by 2021.

With Medicaid programs being the first- or second-largest item in states’ budgets, there is tremendous incentive for states to explore opportunities to lower healthcare costs. States’ traditional methods of lowering Medicaid expenses—reducing access and/or reducing reimbursement rates to manufacturers and providers—are unpopular and insufficient to solve the budget issue, so pursuing alternative payment models is a logical step.


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:


“But I have said before and I will say it again—until we move away from an open-ended entitlement program, and only when states are held accountable to a defined budget—can the federal government finally end our practice of micromanaging every administrative process. I believe that it’s our imperative to instead focus on measuring the actual results on the program while unleashing the power of local innovation—so you will see more from us soon on new opportunities to do just that. So stay tuned.”

– Seema Verma, CMS Administrator

Source: “Remarks by Administrator Seema Verma at the 2018 Medicaid Managed Care Summit,” September 27



61% | 63% | 54%


In a survey of 3,412 physicians by The Doctors Company, 61% said value-based care and reimbursement will have a negative impact on their practice and 63% said they will hurt their earnings, while 54% felt electronic health records have a negative impact on the physician-patient relationship.

Source: “The Future of Healthcare: A National Survey of Physicians—2018,” The Doctors Company, October 1


Medicare Physician-Administered Drugs: Do Providers Choose Treatment Based on Payment Amount?


Do providers choose treatment based on payment amount?

That was the question at hand in Xcenda’s newest report regarding the Medicare Part B physician-administered drugs program. Conducted on behalf of the Part B Access for Seniors and Physicians (ASP) Coalition, data revealed no strong positive correlation between drug payment and utilization and suggest that physician prescribing is not driven by payment per drug administration.

Download the report now >




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
Vice President,
Reimbursement and
Policy Insights,

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


Anuja Kanaskar | Isabell Kang | Scott Shields | Stephen Wilson


Laurie Kozbelt | Ellen Olson


Oct. 5, 2018


Forward to a Friend



View Archived Issues



Connect with AmerisourceBergen:   I  AmerisourceBergen Insights  |   LinkedIn   I  Twitter  

Connect with Xcenda:   I   LinkedIn   I  Twitter