We examine Joe Biden’s plans to build on the Affordable Care Act.

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July 19, 2019

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FEATURED STORY
 

Let’s Go Crazy: 2020 Elections—BidenCare Betting on a Boosted ACA

 
 

While we wait for what the Senate Finance Committee does (or doesn’t do) in terms of legislation impacting prescription drugs (now the rumor is we’ll be waiting until September), we thought we’d start to dive into the road ahead. This week, 2 Democratic presidential candidates unveiled plans: former Vice President Joe Biden released his healthcare plan, and Sen. Kamala Harris (D-CA), released her plan to control prescription drug costs. We take on Biden’s plan first. Next week, we’ll tackle Harris’ plan.

On Monday, current Democratic primary lead Joe Biden announced his plan for an improved Affordable Care Act (ACA) that would add a public option to the current healthcare law, supporting an effort “…not to start from scratch…but to build...from what we have.”

At a cost of approximately $750 billion over 10 years, the Biden plan would, among other things:

  • Allow Medicare to directly negotiate with pharmaceutical manufacturers to help reduce drug costs
  • Approve importation of prescription drugs from other countries as long as the Department of Health and Human Services (HHS) deems the drugs are safe
  • Limit launch prices for specialty drugs that have no competition by giving HHS authority to create a panel to recommend prices for these drugs launched in the US, or use external reference pricing if the drug is first launched internationally
  • Cap price increases for all brand, biotech, and “high-priced” generic drugs to inflation as a condition of participation in the Medicare program and public option
  • Eliminate the tax deduction that pharmaceutical manufacturers receive for advertisement spending
  • Accelerate the development of generic drugs to increase access
  • Prevent surprise billing by prohibiting providers from charging out-of-network rates to patients who receive treatment at in-network hospitals

This revised ACA may be more palatable and feasible than “Medicare for All” and its $3 trillion price tag. However, the public option didn’t fare so well in the last Administration when the Democratic Party held the majority in the Senate.

The question is whether there’s been enough of a culture shift where a plan like this has the potential to become a reality. As highlighted in the media, the middle class is being squeezed by stagnant wages and rising healthcare costs, and this may make additional government involvement in healthcare more acceptable.

 
 

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LEGISLATIVE UPDATE
 

Legislative Bytes

 
 
  • The House of Representatives approved a repeal of the ACA’s “Cadillac tax,” 419-6; it heads to the Senate next. The Congressional Budget Office (CBO) estimated the repeal would increase the budget by almost $200 billion over 10 years.
  • Rep. Scott Peters (D-CA) introduced HR 3772 that would ensure equitable payment for, and preserve Medicare beneficiary access to, diagnostic radiopharmaceuticals under the Medicare hospital outpatient prospective payment system. See press release.
  • The CBO determined that a Senate bill, Lower Health Care Costs Act (S. 1895), which would tackle surprise medical bills and high drug prices, would save the federal government roughly $7 billion over the next decade.

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THE VALUE CORNER
 

Sign O’ the Times: QALYs = Bad

 
 

Last Thursday, the Institute for Clinical and Economic Review (ICER) announced the publication of an Evidence Report assessing the comparative clinical effectiveness and value of 2 exon-skipping therapies to treat Duchenne muscular dystrophy—EXONDYS 51 (eteplirsen) and golodirsen—as well as EMFLAZA (deflazacort), a corticosteroid. For EMFLAZA, ICER recommended a discount of at least 73% from the list price to achieve commonly cited thresholds for cost-effectiveness. For EXONDYS 51 and golodirsen, no value-based price was suggested because the evidence is not yet sufficient to demonstrate improvements in function or outcomes. The full Evidence Report will be discussed during a public meeting of the New England Comparative Effectiveness Public Advisory Council (New England CEPAC) on July 25.

Additionally, last week, an opinion article published in Morning Consult discussed some of the controversies around using the quality-adjusted life-year (QALY) in value assessments, especially among patients with chronic conditions and disabilities. The article described a study that included 700 cancer patients and survivors and found that awareness of the QALY was only 7%, even among a health literate study population. After patients received information about the QALY, approximately 67% had concerns about the possible implications of the measure, referring to it as “ethically inappropriate” and “immoral.” The article suggests that the QALY should not be employed in the US and urges organizations that are measuring value to be completely transparent and include feedback from patients, survivors, and caregivers in their assessments.

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

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REGULATORY UPDATES
 

U Got the Look: Alternative Payment Model for Radiation Therapy

 
 

Last week, the Centers for Medicare and Medicaid Services (CMS) announced proposals for 2 mandatory payment models for radiation therapy and end-stage renal disease (ESRD). The proposals are attempts by the Administration to transition public payers to a value-based care model, where reimbursement is based on outcomes, not volume of services provided. Last week we discussed the ESRD model; this week we cover the radiation therapy proposal.

CMS proposes to test episodic payment models for radiation therapy, where providers—regardless of their care setting—will be given a lump sum for all services delivered to a patient within a 90-day window. Payments will be based on proposed national rates, adjusted for the patient population and geographic factors of the care setting, and providers may be reimbursed a portion of the withheld Medicare dollars based on the patient’s outcomes and experience.

Hospitals and providers will be randomly chosen to participate in the proposed payment model test, which begins next year and will run through the end of 2024. CMS hopes that this alternative payment model will incentivize providers to streamline care and patients to seek care in more cost-effective settings, while saving the federal government millions of dollars on healthcare expenditures.

 

Instead of Diamonds and Pearls, Salaries Going to Premiums and Deductibles

 
 

In its Health Insurance Index Report for the 2019 Open Enrollment Period, eHealth reports on the 64% of its members enrolled in ACA-compliant plans not eligible for subsidies. (eHealth’s enrollment differs considerably from those of Healthcare.gov, which reports 87% of its enrollees are eligible for subsidies.)

In comparison to 2018, many premiums are up somewhat, although deductibles are down. Among 2-person families, monthly premiums broke $1,000 for the first time, with an increase from $995 to $1,002. Monthly premiums among families of 4 increased from $1,376 to $1,403. Deductibles decreased almost 10% from $8,803 to $8,071. More notable, however, are findings that average premiums for all families combined (households with 2 or more members) have increased 73% since the program’s inception in 2014. On the other hand, deductibles for the same group have decreased only 2%. The total combined cost of premiums plus deductibles for a family of 4 now tops $25,000.

Health maintenance organization (HMO) enrollment remains popular—and steady—at 56%, while exclusive provider organization (EPO) enrollment has increased (from 20% to 26%) in the past year at the expense of preferred provider organization (PPO) plans (22% to 16%). Enrollment in Silver plans across the life of the ACA (21% to 35%) demonstrates a slow but steady increase in popularity, while Bronze—the most popular tier—slowly trends downward (47% to 41%).

 

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:



 
HEARD ON THE STREET
 

“[Medicare for All] is a monumental undertaking with present-day reimbursement, and given a new paradigm of the M4A scenario, the results might be, simply put, framed into two categories—the winners and the losers:

  • Hospitals, health systems, and integrated delivery entities absent significant changes to their current operating structures: Mostly losers with a few winners
  • Independent physicians: Mostly losers
  • Health plans: Mostly losers with a few winners.”

Source: “Medicare for All? What Does It Really Mean?”—Hammond Hanlon Camp LLC, July 2019

 

 
POLICY BY NUMBERS
 

5.1%

 

The Centers for Disease Control and Prevention’s National Center for Health Statistics released provisional counts of overdose deaths in the US that showed a decline of 5.1% between 2017 and 2018.

Source: “Secretary Azar Statement on 2018 Provisional Drug Overdose Death Data,” July 17

 

Experience Our Gallery of Innovation

 
 

For 25 years, the creative, scientific minds of Xcenda have been delivering access “firsts.” We proudly launched the first reimbursement field team, developed the first outcomes analyzer, and created the concept of the product value proposition—all by staying focused on being patient-first.

This year as we celebrate our silver anniversary, we continue our tradition of firsts with a series of new innovative digital solutions. From developing new methods of immersion training to offering new ways to analyze evidence and enhance messaging, we invite you to join us at the forefront of innovation.

Take a moment to look at some of our most recent market access inventions, and let’s talk about how Xcenda’s Value Experts can help you prove value and maximize patient access for your portfolio of products.

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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:

Rachel Besse | Jenna Kappel | Stew Kaufman | Scott Shields | Linnea Tennant

PRODUCTION:

Laurie Kozbelt | Ellen Olson

 

July 19, 2019

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