We look at the 4 areas the Trump Administration considers lacking in choice and competition for the US healthcare market.

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Dec. 7, 2018


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More Paper, Less Action: What Could Help Healthcare in the US


In October 2017, President Trump charged his Administration to assist with developing a healthcare system that provides high-quality care at affordable prices for Americans by promoting choice and competition. In response to this directive (Executive Order 13813), the Department of Health and Human Services (HHS)—together with the Departments of the Treasury and Labor, the Federal Trade Commission, and several offices within the White House—created a report that describes the impact of laws, regulations, guidance, and policies on choice and competition in US healthcare markets and identifies steps that states or the federal government could take to develop a better-functioning healthcare market.

While acknowledging actions already taken to reform the healthcare system, the Administration recognizes that more work needs to be done to address significant obstacles that remain. The press release summarizes 4 areas where federal and state rules impede adequate choice and competition and also offers recommendations for improving public policy in each of these areas.

1. Healthcare Workforce and Labor Markets
Recommendations focus on broadening providers’ scope of practice (ie, the range of services they can provide) while improving workforce mobility, including telehealth and interstate laws, to encourage innovation and to allow providers to meet patients’ needs more easily. Other recommendations include removing barriers that limit the scope of services offered by allied health professionals (eg, medical technologists, occupational therapists, physical therapists, radiographers, respiratory therapists), as well as streamlined funding for graduate medical education to allocate taxpayer dollars efficiently and to address physician supply shortages.

2. Healthcare Provider Markets
In order to promote choice, competition, and quality-of-care improvements in provider markets, the report makes several recommendations including state action to repeal or scale back Certificate of Need laws and to encourage the development of value-based payment models that offer flexibility and risk-based incentives for providers, particularly without disproportionately burdening small or rural practices.

3. Healthcare Insurance Markets
The report recommends reducing government mandates, eliminating barriers to competition, and allowing consumers maximum opportunity to purchase health insurance that meets their needs. The intended purpose is to offer a variety of affordable coverage options to address diverse consumer preferences.

4. Consumer-Driven Healthcare
The report suggests that the US healthcare system’s reliance on third-party payment disconnects consumers from the true price of healthcare and offers them little incentive to search for low-cost, high-quality care. When health policies offer consumers more control over their healthcare spending, they may use that power to demand greater value from the system. Thus, the report recommends expanding access to health savings accounts (HSAs), implementing reference pricing where appropriate, and developing price and quality transparency initiatives to affirm that consumers can make well-informed decisions regarding their healthcare.

The report, like all, is just paper unless someone acts on it. And, given our current political climate, those suggestions may not make much progress.

The Administration has been a proponent of deregulation from its beginning, and this report advances it another step. The report also makes clear the Administration is concerned about healthcare consolidation reducing competition and also concentrating market power against patients, and suggests several avenues to empower patients with information to make better choices.


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And So It Begins: Penalizing Medication Drug Misclassification


On Tuesday, Senators Chuck Grassley (R-IA) and Ron Wyden (D-OR) introduced the Right Rebate Act of 2018, which would apply civil monetary penalties when a pharmaceutical manufacturer knowingly misclassifies a drug for the Medicaid drug rebate program—for example, classifying a brand drug incorrectly as a generic product. The proposed legislation comes on the heels of reports of drug-classification penalties and fines.

The bill aims to improve drug data reporting and oversight of drug-classification information and compliance by setting aside 25% of the penalty money. Yearly reports describing these misclassified drugs and related government actions would also be required.

Hundreds of drugs could be impacted by the bill. According to a 2017 report from the HHS Office of Inspector General, about 3% of drugs in Medicaid’s rebate program, or 885 of the roughly 30,000 drugs in the system, may have been misclassified in 2016.

The HHS report also called attention to the fact that while the Centers for Medicare & Medicaid Services (CMS) can ask manufacturers to change classification data, it cannot require those corrections. This proposed legislation would allow CMS to have that explicit authority but does not provide an explicit process for classification disputes or potential errors.

Drug pricing remains a popular discussion topic in the bipartisan Congress. Pharmaceutical manufacturers are under increased scrutiny in regard to their practices, and this bill serves as a reminder to double check the classifications of drugs in their stable.


Legislative Byte

  • Senator Jeff Merkley (D-OR) introduced S.3680, a bill to require the HHS Secretary to establish reference prices for prescription drugs for purposes of federal health programs.

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But Will It Print on a 2-Foot Receipt? CVS Offers 100% Rebates to Plan Sponsors


On Tuesday, CVS Health announced a new pricing model called “Guaranteed Net Cost” that would pass along 100% of rebates to plan sponsors. CVS Health states this “simplified” financial model would provide plans with predictable average cost of prescriptions after rebates and discounts across retail, mail-order, and specialty pharmacies. The decision to pass along any of the rebates to consumers will rest with plan sponsors.

In addition to passing along 100% of rebates, CVS Caremark, its pharmacy benefit manager (PBM) division, will assume risk for drug price inflation and shifts from brands to generics.

Adopting the model is not a requirement, but CVS Caremark notes that many existing and new clients will begin using the Guaranteed Net Cost model in 2019. However, the PBM did not provide exact details about the numbers of plans that will use the new model. For those plans that intend to use the new model, plan sponsors could still decide to implement policies that could help further decrease drug costs, such as encouraging use of lower-cost therapeutic alternatives or point-of-sale rebates.

CVS Caremark will rely on its drug-management strategies to generate most of its revenue; the PBM noted these strategies have kept drug price growth to only 0.2% in 2017, with medication adherence improvements reducing overall healthcare costs for their plan sponsors by $600 million.

Given the Administration’s emphasis on reducing drug costs and a proposed rule on rebates at the Office of Management and Budget (OMB), this could be a proactive way for CVS Health to implement rebate policy changes without undergoing more restrictive regulations from the federal government. However, the Administration continues to send mixed messages to the public about whether or not PBMs are part of the problem—blaming PBMs for high drug costs in Part D but potentially inserting them into Part B as proposed in the International Pricing Index (IPI) model. One thing is for certain: as we enter into a new year in just a few short weeks, policy focus on this area will continue.


Proving What We Suspected: MTM Works


Last Friday, CMS released results of the first performance year (2017) of the CMS Innovation Center’s Part D Enhanced Medication Therapy Management (MTM) Model. The report found that participants in the model spent approximately $325 million less than the anticipated spending benchmarks across the 1.7 million beneficiaries enrolled.

The Enhanced MTM Model provides financial incentives for standalone Part D Prescription Drug Plans (PDPs) in selected regions to offer innovative MTM programs in place of the standard Part D MTM Model, with the goal of improving the quality of care while also reducing costs. The Enhanced MTM Model offers a payment to participating PDPs if their enrolled members’ medical (Parts A and B) expenses are reduced by at least 2% in a given plan year compared to a benchmark that simulated their performance if they were not in the model.

Results show that:

  • 11 of 22 participating plans are eligible to receive the performance-based payment because their medical spending was reduced by 2% or more
  • 7 participating plans show reductions in medical spending that were less than 2%; therefore, the plans are ineligible to receive the performance-based payment
  • 4 plans showed increases in spending and are, therefore, ineligible to receive the performance-based payment

The Enhanced MTM Model began January 1, 2017 with a 5-year performance period. CMS is testing the model across 5 Part D regions. Both enrollment and savings are projected to increase during 2018, the second performance year of the model.

Various incentives are used in this model to test patient behaviors and to help identify best practices in patient engagement. Should they prove successful, these incentives may be applied more broadly in the core Part D MTM programs, as well as beyond Part D, to encourage patients to take an active role in their health.


Winners and Losers: 2019 Payment Changes From Hospital VBP Program


On Monday, CMS released the fiscal year (FY) 2019 payment adjustments it will make based on the Hospital Value-Based Purchasing (VBP) program, which was developed to reward better value, outcomes, and innovations. To do so, it adjusts Medicare payments based on the quality and cost of care rather than the quantity of services. For FY 2019, CMS will reduce Diagnosis-Related Group (DRG) payment amounts by 2%, redistributing these reductions—approximately $1.9 billion—based on hospital performance measured during various performance periods that ended in 2017.

For 2019, over 55% of hospitals will receive higher Medicare payments—an average net increase in payment adjustments of 0.61%, ranging from a net decrease of 1.59% to a net increase of 3.67%.

Though the Hospital VBP program has been criticized since its implementation in 2012, the data suggest slight improvements in quality and value, as the average total performance scores for participating hospitals increased to 38.1 from 37.4 in FY 2018. Rural hospitals received above-average scores compared to their urban peers.


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:

  • CMS approved New Hampshire’s section 1115 waiver application with work requirements.
  • The Food and Drug Administration is proposing changes to the 510(k) pathway that would require manufacturers to compare new device applications to modern predicates as opposed to relying on older predicate devices.
  • The Institute for Clinical and Economic Review (ICER) released a Final Evidence Report and Report-at-a-Glance assessing the comparative clinical effectiveness and value of the following extended-release medications for the treatment of opioid use disorder: PROBUPHINE (buprenorphine implant); VIVITROL (naltrexone for extended-release injectable suspension); SUBLOCADE (buprenorphine extended-release) injection; and CAM2038, an investigational buprenorphine weekly and monthly subcutaneous depot injection. (See press release.)


It’s that time again...open enrollment for the insurance exchanges. As we have done each year, we will compare weekly enrollment in the current and previous years for the 39 exchanges that use the HealthCare.gov platform for the 2019 benefit year, including the federally facilitated exchanges, state partnership exchanges, and some state-based exchanges.

Comparison of 2018 and 2019 Weekly Open Enrollment Snapshots for HealthCare.gov





“None of us imagined we’d be...reading through 1,000-page-long CMS documents and rules and proposals, but that’s what life has come to at times.”

– Joseph Alvarnas, Vice President of Government Affairs at City of Hope in California, discussing, on a panel at the American Society of Hematology’s annual conference, how health systems will pay for CAR-T therapies

Source: “Hospital docs weigh in on CAR-T reimbursement: ‘It’s very complicated’,” BioPharma Dive, December 5





CMS reviewed Medicare Advantage organizations’ online directories, totaling 10,504 provider locations. The agency found that 48.74% had at least 1 inaccuracy, such as an incorrect phone number or address, or an indication that a provider was accepting new patients when, in reality, it wasn’t.

Source: “Online Provider Directory Review Report,” CMS, December 4


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December 4–8  |  San Antonio, TX
Xcenda is proud to be presenting a poster titled, Evolving Treatment Patterns in Hormone Receptor-Positive, HER2-Negative Metastatic Breast Cancer, at this year’s San Antonio Breast Cancer Symposium. This symposium is designed to provide state-of-the-art information on the experimental biology, etiology, prevention, diagnosis, and therapy of breast cancer and premalignant breast disease to an international audience of academic and private physicians and researchers. Contact us to set up a meeting at the symposium. 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


Chris Droukas | Maureen Holmes | Jenna Kappel | Joaquin Zabalza Seguin | Scott Shields


Laurie Kozbelt | Ellen Olson | Tia O’Brien


Dec. 7, 2018


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