We take a look at the final annual Notice of Benefit and Payment Parameters for the 2020 benefit year.

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Apr. 19, 2019

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FEATURED STORY
 

Taking Coupons Away From the Basket of Options

 
 

Yesterday, the Centers for Medicare & Medicaid Services (CMS) released the final annual Notice of Benefit and Payment Parameters for the 2020 benefit year (2020 Payment Notice). The rule governs core provisions of the Affordable Care Act (ACA), including the operation of the exchanges/marketplaces, benefit standards for health plans, and premium-stabilization programs.

Beginning in 2020, individual market, small group, large group, and self-insured group health plans are now permitted to exclude manufacturer coupons from counting toward patients' annual limitation on cost-sharing if a medically appropriate generic drug is available, to the extent permitted by applicable state laws. This exclusion may affect more than 13 million people.

Other actions finalized in the 2020 Payment Notice include:

  • Increased the maximum annual limitation on cost-sharing of $8,150 for self-only coverage and $16,300 for other than self-only coverage for the 2020 benefit year, representing an approximately 3.2% increase above the 2019 parameters of $7,900 for self-only coverage and $15,800 for other than self-only coverage
  • Lowered exchange user fees by 0.5%, which are usually passed directly to the consumer via higher premiums
  • Refined the risk-adjustment program to improve the accuracy of the data used to calculate the program’s charges and payments to issuers, thus reducing incentives for insurers to avoid enrolling people with expensive health conditions
  • Changed the premium index for the 2020 benefit year to use CMS Office of the Actuary estimates of projected private individual and group market health insurance premiums that CMS believes reflects a more comprehensive and accurate measure of premium costs across the private market

The federal government and the insurance industry have been battling the use of drug coupons, which they believe increase insurers’ costs by steering patients toward more expensive brand drugs. Proponents of the practice, including the pharmaceutical industry and many patient-advocacy organizations, assert that the coupons help patients afford their medications.

Those interested in additional information about the 2020 Payment Notice can review the accompanying press release and fact sheet.

 

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LEGISLATIVE UPDATES
 

Legislative Bytes

 
 
  • House Oversight Chairman Elijah Cummings (D-MD) issues a letter to Ranking Member Jim Jordan (R-OH) on comments made to drug companies amid the committee's ongoing investigation (accompanying press release).
  • Rep. Janice Schakowsky (D-IL) introduced HR 2296, a bill to require reporting regarding certain drug price increases.

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THE VALUE CORNER
 

ICER Not Leaven Us Alone:
Does Not Pass Over Opportunity to Look at Cardiovascular and RA Treatments

 
 

On Monday, the Institute for Clinical and Economic Review (ICER) released a Revised Scoping Document for its assessment on cardiovascular disease (CVD) therapies XARELTO (rivaroxaban) and VASCEPA (icosapent ethyl). The revised document includes updates in response to public comments on the previously posted Draft Scoping Document. Notably, “major adverse limb events” are now listed as an outcome of interest in both the comparative effectiveness and comparative value sections. The Draft Evidence Report on this topic will be posted on July 24, 2019.

Last Thursday, April 11, ICER also announced the release of the Draft Scoping Document for an updated assessment of a prior 2017 report on targeted immunomodulators for rheumatoid arthritis (RA), which will evaluate new data, where available, for the 11 original treatments, including HUMIRA (adalimumab), CIMZIA (certolizumab pegol), ENBREL (etanercept), SIMPONI (golimumab), REMICADE (infliximab), RITUXAN (rituximab), ORENCIA (abatacept), ACTEMRA (tocilizumab), XELJANZ (tofacitinib), KEVZARA (sarilumab), and OLUMIANT (baricitinib). The report will additionally include 1 drug currently under investigation (upadacitinib) with a decision expected in August 2019 and at least 1 biosimilar (INFLECTRA [infliximab-dyyb]). This Draft Scoping Document is open for public comment until 5 PM ET on May 1, and the Revised Scoping Document will be posted on May 9.

As always, if you need assistance with all things ICER or value-related, please contact kristen.migliaccio@xcenda.com.

 

PM360: Dealing With Insurers’ Copay Accumulators

 
 

As more and more insurers begin to implement copay accumulator programs, how will pharmaceutical manufacturers and patients be affected?

Corey Ford, Director of Reimbursement and Policy Insights at Xcenda, emphasizes the importance of a tailored, consultative approach to identify the best solutions for patients.

Read more in PM360 >

 

 

 

 

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REGULATORY UPDATES
 

Like Sunrise Services, It’s Early, but State-Driven Models Have Positive Results

 
 

The Center for Medicare and Medicaid Innovation (CMMI) released the fifth Annual Report on State Innovation Models (SIM) Initiative that discusses CMS testing regarding how state governments use their regulatory and policy levers to expedite statewide healthcare system transformation. For Round 1 (R1), in 2013, CMMI granted between $33 and $45 million to each of the 6 Model Test states: Arkansas, Maine, Massachusetts, Minnesota, Oregon, and Vermont. The testing period began between October 2013 and January 2014 and culminated between Fall 2016 and Spring 2018.

The Model Test states used state laws, Medicaid waivers, and insurance contracting to shift healthcare payments toward value-based models. They tested 9 alternative payment and delivery models in Medicaid or commercial payers:

  • Patient-centered medical homes (PCMHs) in Arkansas, Massachusetts, and Oregon
  • Accountable care organizations (ACOs) in Maine, Minnesota, and Vermont
  • Behavioral health homes in Maine
  • Episodes of care (EOC) in Arkansas
  • Coordinated care model in Oregon

The Model Test states also invested in infrastructure and training for providers and engaged stakeholders. These states also used SIM awards to provide resources to providers to enable provider participation in alternative payment models within Medicaid.

Some key findings from the report include:

  • SIM funds improved statewide health information exchanges (HIEs) and electronic notification systems. This, along with model requirements or legislation, increased providers’ use of HIEs that resulted in improved care coordination.
  • ACO models reduced increases, relative to a comparison group, in emergency department visits and/or inpatient admissions.
  • PCMH models that incentivized care coordination for Medicaid beneficiaries established improvements in physician access but typically did not improve other outcomes.
  • EOC models in Arkansas notably improved quality outcomes for Medicaid beneficiaries but did not reduce hospital-related utilization, even though excessive use of hospital services could have resulted in financial penalties for providers.
  • Of the 9 alternative payment and delivery models tested in SIM R1, only Vermont’s ACO model yielded relative Medicaid savings ($97 million across the 3 implementation years).
  • Medicaid expenditures generally increased in other models after the first year, with Minnesota’s ACO showing reductions beginning in the third year.

While most state-led models supported through SIM did not realize Medicaid savings, many results were promising considering the limited provider incentives. ACOs improved costly hospital-related utilization, and states in many cases paid out shared savings to participating providers. Also providers and beneficiaries reported improved care across state-led models, and these models are being sustained through changes in state Medicaid programs. Expect to see more state-based innovation, particularly with this Administration.

 

Peeping in the Future: Humana Launches New Value-Based Oncology Payment Model 

 
 

On Tuesday, Humana announced that it is working with physician groups to launch a new payment model called the Oncology Model of Care (OMOC) for Medicare Advantage and commercial members receiving treatment for cancer. Humana’s goal for the OMOC program is to improve the patient experience and health outcomes for patients with a cancer diagnosis through more integrated and cost-effective cancer care.

Humana’s program will reward participating cancer practices for improved performance on certain metrics over a 1-year period. The evaluation will be determined by metrics that address access to care, clinical status assessments, and patient education.

The program will start with 16 practices. Each participating practice has received a care-coordination fee to help implement reporting requirements and infrastructure for the model. Humana will reward practices that are able to improve their performance over a 1-year period with an increased care-coordination fee. Practices whose performance does not improve will still receive the fee, though their continued participation in the program will be evaluated. Humana will meet with participating practices twice a year to review their performance metrics and opportunities for improvement.

The OMOC program is Humana’s fourth specialty-care payment model. Last month, Humana announced a bundled-payment model for Humana Medicare Advantage members undergoing spinal fusion surgery. Humana also has a bundled care program for members undergoing hip or knee joint replacements, as well as a maternity bundled payment program for commercial plan members. Specialty-care payment models are part of Humana’s initiatives to reward integration of care resulting in better outcomes and lower costs, which are the basis of value-based care.

 

Does a Capitation Payment Model Result in Eggceptional Value?

 
 

A recent report released by the Integrated Healthcare Association (IHA) suggests that a capitation payment model results in better value and health outcomes than a traditional fee-for-service (FFS) model. The report measured clinical quality, utilization, and total cost of care for the commercial population in California in each risk-sharing category.

IHA divided financial risk sharing between health plans and providers into 3 categories:

  • No risk: Provider is paid via fee-for-service
  • Professional risk: Set payment for professional services only
  • Full risk: Set payment for both professional services and facility costs

Under an FFS model, the provider is paid a fee for each service; in a capitation model, the provider assumes more financial risk because payment is capped at a set payment for each enrolled member assigned to the provider, per period, whether or not the patient seeks care.

According to the report, preventive screening rates for patients of full-risk providers were 11% higher than those of no-risk FFS providers. Additionally, patients of risk-sharing providers paid less per year in out-of-pocket costs with a 3.5% reduction in total cost of care, including 13% less for pharmacy costs. As shown in the graph below, considering both quality and costs, the results indicate greater value for providers sharing financial risks.

Over the last several years it has become more prevalent for payers, including CMS, to turn toward bundled payments and shift from volume-based care to models that reward physicians based on outcomes. At the national level, strong policy interest in financial risk sharing between health plans and providers is evident in alternative payment models such as Medicare ACOs.

The IHA report findings begin to address the question of the added value provided by a capitation payment model. However, the authors recommend exploring further how the level of risk sharing influences cost and quality.

 

Maybe Hopping to Conclusions: Arguing Against Biosimilars

 
 

In a 2-part Health Affairs blog post (Part 1 and Part 2), Peter B. Bach, et al, criticize the ineffectiveness of biosimilars at reducing the costs of biologic/biosimilar treatments and argue in favor of imposing price reductions on biologics once their exclusivity periods have expired.

The authors state that biologics have a “natural monopoly,” meaning characteristics inherent to the development and use of biologics discourage entrants into the market (including biosimilars and biologics in the same therapeutic class) as well as uptake of those entrants once approved. They argue that the length of time to develop a biosimilar (8–10 years) and the need for clinical testing greatly increase the costs and time to market compared to generics. This, they attest, leads to a stunted market as evidenced by the fact that only 18 biosimilars have been approved since the FDA provided guidelines for approval in 2012. Further, they suggest that the perception of biosimilars as less safe and effective than those of the reference biologic, coupled with incomplete interchangeability issues, result in providers being reluctant to substitute a biosimilar for the reference biologic.

The authors recommend abandoning biosimilars as tools to lower prices of biologics and, instead, imposing government pricing regulations on biologics once their exclusivity period has expired.

In a Tweeted response, former commissioner of the Food and Drug Administration (FDA) Scott Gottlieb, MD strongly disagreed, writing,

“It’s far too early to throw in the towel on biosimilars. Impediments to uptake remain commercial barriers that will erode. One way to accelerate that erosion is to put Part B drugs into a comparatively (sic) bid scheme to take advantage of the fact that most are multi source medicines.”

Supporting Dr. Gottlieb’s argument (see—he’s still news!), a separate and unrelated report by Rothwell Figg shows the FDA approval of biosimilars has been increasing at a steady rate in the United States since 2015.

Dr. Bach and his colleagues recommend determining prices once market exclusivity expires by adding an “appropriate” profit to the costs of production and market distribution, acknowledging there are concerns associated with determining these measures. The blog posts do not discuss the legalities or ethics of price-setting in a free market economy or of the possibility of legal challenges to such a proposal.

 

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:The Supreme Court justices asked the solicitor general to file a brief in Rutledge v. PCMA as they consider taking up the case that could determine how much latitude states have to regulate pharmacy benefit managers.



 

The Medicine Maker: Cell and Gene Pricing: How Can Manufacturers Get it Right?

 
 

Manufacturers are becoming increasingly more open to alternative payment and reimbursement models for cell and gene therapies.

Xcenda's Ana Stojanovska, Vice President of Commercial Consulting, discusses her approach and experience when working with manufacturers and their payment models in The Medicine Maker.

Read the article >

 

 

 

 
HEARD ON THE STREET
 

“Medicare for All is the biggest threat to the American healthcare system. What we're talking about is stripping people of their private health insurance and forcing them into a government-run program. So this is the bureaucracy that's going to be making decisions about everyone's healthcare: what kind of benefits they can have, what kind of medications they can have access to.”

– Seema Verma, CMS administrator

Source: “Medicare chief says 'Medicare-for-all' is ‘biggest threat to American health care system,’” Fox News, April 17

 

 
POLICY BY NUMBERS
 

47%

 

Mercer asked employers whether they favored or opposed action on rebates, and almost half of respondents favored eliminating rebates in some form. 42% of respondents supported eliminating rebates for both the public and private sector, and 5% were in favor of eliminating them for government plans only. Overall, 17% of respondents wanted to leave rebates as they are.

Source: “Mercer’s National Survey of Employer-Sponsored Health Plans,” April 12

 
UPCOMING MEETINGS & CONFERENCES
 

2019 Asembia Specialty Pharmacy Summit

April 29–May 2 | Las Vegas, NV
Join Platinum sponsor AmerisourceBergen at this year’s Asembia Specialty Pharmacy Summit at the Wynn & Encore Las Vegas. Each year, the Summit welcomes thousands of senior executives, key decision makers, and other industry professionals to the nation’s largest annual gathering for specialty pharmacy. Visit the AmerisourceBergen associates at booth #311. 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
Vice President,
Reimbursement and
Policy Insights,
Xcenda

MANAGING EDITOR:
Scott Shields
Associate Director,
Health Policy
Xcenda

 

ADVISORY BOARD:

Doug Cook
President | Commercialization Services & Animal Health

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

CONTRIBUTING AUTHORS:

Anuja Kanaskar | Isabell Kang | Jenna Kappel | Reeya Patel | Scott Shields | Tammy Washington | Stephen Wilson

PRODUCTION:

Brianna Faulkner Hutchison | Kylie Matthews | Ellen Olson

 

Apr. 19, 2019

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