CMS released proposed rules on 3 Medicare payment programs.

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Aug. 2, 2019

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FEATURED STORY
 

Just Before We Sent out a Warren(t), CMS Releases Medicare Proposed Rules

 
 

On Monday, the Centers for Medicare & Medicaid Services (CMS) released the long-awaited proposed rules for 3 Medicare payment programs that comprised 2,850 pages, or about an 11-inch-high stack of printer paper. Editor’s Note: We believe in sustainability and would never print out the 3k worth of rules. Our stapler couldn’t handle it.

Calendar Year (CY) 2020 PFS Proposed Rule
CY 2020 Conversion Factor (CF)
The 2020 proposed physician CF is $36.0896, fractionally higher than 2019’s $36.0391.

Payment for Evaluation and Management (E/M) Services
For office/outpatient E/M visits starting in CY 2021, CMS is proposing to adopt the new coding framework outlined by the American Medical Association (AMA) and the Current Procedural Terminology (CPT) Editorial Panel. The CPT coding changes retain 5 levels of coding for established patients, reduce the number of levels to 4 for office/outpatient E/M visits for new patients, and revise the code definitions. Additionally, in last year’s rule, CMS finalized for CY 2021 a single blended rate for E/M office/outpatient visit levels 2 through 4 (one for established and another for new patients), while maintaining separate payment rates for level 5 visits. Rather than continuing with this blended rate, CMS is proposing to establish separate values for levels 2 to 4 office/outpatient E/M visits for both new and established patients for CY 2021. Specifically, CMS proposes to adopt the AMA RUC-recommended work and time values for E/M visit codes, which would increase payment for office/outpatient E/M services. Finally, CMS is seeking comment on a proposal to consolidate the add-on codes for E/M visits for primary care and non-procedural specialty care into a single code.

Merit-based Incentive Payment System (MIPS) Value Pathways
CMS is proposing to implement a new conceptual framework for MIPS, called MIPS Value Pathways (MVPs), which would take effect after the 2021 performance period. The new framework would move MIPS from its current state, which requires clinicians to report on many measures across the multiple performance categories (eg, quality, cost, promoting interoperability, and improvement activities) to a system in which clinicians will report less. Under MVPs, clinicians would report on a reduced set of measures that are outcomes-based, specific to a clinician’s specialty, and more closely aligned with Alternative Payment Models.

Monday’s PFS proposed rule was accompanied by a press release and fact sheet. It is scheduled to be published in the August 14 issue of the Federal Register. The comment period for the proposed rule ends September 27, 2019. The final rule is expected around the beginning of November and will become effective January 1, 2020.

CY 2020 OPPS Proposed Rule
CY 2020 CF
CMS proposes to set the OPPS conversion factor for CY 2020 at $81.398, an increase of 2.7% over the 2019 CF of $79.490. Hospitals that fail to meet the Hospital Outpatient Quality Reporting Program reporting requirements are subject to an additional reduction of 2.0%.

Drug Payment
CMS proposes a packaging threshold for CY 2020 of $130, up from $125 in CY 2019.

For non-340B-acquired separately payable drugs, the proposed rule retains the average sales price (ASP)+6% payment methodology for CY 2020. For biosimilars, CMS is proposing to continue the policy to make all biosimilars eligible for pass-through payment and not just the first biosimilar biological product for a reference product. For 340B-acquired biosimilars, CMS is proposing to continue the policy to pay non-pass-through biosimilars acquired under the 340B program at the biosimilar’s ASP minus 22.5% of the biosimilar’s ASP instead of the biosimilar’s ASP minus 22.5% of the reference product’s ASP.

CMS proposes that the pass-through payment status of 6 drugs and biologicals would expire on December 31, 2019 (Table 14, page 302 of unpublished version), and that pass-through payment status will continue for 61 drugs and biologicals (Table 15, page 305).

340B Payment Policy
CMS is proposing to continue reimbursing for 340B-acquired drugs at ASP minus 22.5%—despite the recent US District Court/DC holding that the Secretary exceeded his statutory authority in implementing this policy in CY 2018. CMS indicates that the agency plans to appeal the decision. Nevertheless, CMS is soliciting public comments on a remedy in the case of an adverse decision on appeal.

Site-Neutrality Pay Structure
CMS is completing the 2-year phase-in of the reduction in payment for the clinic visit services described by HCPCS code G0463 furnished in expected off-campus provider-based departments as a method to control “unnecessary” increases in the volume of this service. CMS indicates that the proposal would result in lower copayments for beneficiaries and savings for the Medicare program and taxpayers that total of $810 million for 2020.

Disclosure of Negotiated Rates
As originally foreshadowed in an executive order, hospitals would be required to publicize their standard charges negotiated with insurers for items and services and post them online in an easily comparable format. They would also have to disclose negotiated rates for “shoppable services” (eg, X-rays and lab tests) in a way consumers can understand. This is different from previous pushes to publish the hospital’s chargemaster, which shows the non-negotiated “rack” rates.

Monday’s OPPS proposed rule was accompanied by a press release and fact sheet. It is scheduled to be published in the August 9 issue of the Federal Register. The comment period for the proposed rule ends September 27, 2019. The final rule is expected around the beginning of November and will become effective January 1, 2020.

ESRD PPS and DMEPOS
CY 2020 Base Rate
The proposed CY 2020 ESRD PPS base rate is $240.27, an increase of $5.00 from the current base rate of $235.27.

Eligibility Criteria for the Transitional Drug Add-on Payment Adjustment (TDAPA)
CMS proposes revisions to drug0designation process regulation for new renal dialysis drugs and biological products that fall within an existing ESRD PPS functional category. Specifically, CMS proposes to exclude the following New Drug Application (NDA) types from being eligible for the TDAPA, effective January 1, 2020:

  • Type 3, 5, 7, or 8
  • Type 3 in combination with Type 2 or Type 4
  • Type 5 in combination with Type 2
  • Type 9 when the parent NDA is Type 3, 5, 7, or 8

ASP Conditional Policy for the Application of the TDAPA
CMS proposes to no longer apply the TDAPA for a new renal dialysis drug or biological product under the following ASP submission conditions:

  • If CMS does not receive a full calendar quarter of ASP data within 30 days of the last day of the third calendar quarter after it begins applying the TDAPA
  • Beginning no later than 2 calendar quarters after it determines a full quarter of ASP data is not available
  • If CMS does not receive the latest full calendar quarter of ASP data for the product, beginning no later than 2 calendar quarters after the agency determines that the latest full calendar quarter of ASP data are not available

Discontinuing the Application of the Erythropoiesis-Stimulating Agent (ESA) Monitoring Policy (EMP) Under the ESRD PPS
CMS proposes to discontinue the application of the EMP under the ESRD PPS. CMS no longer believes the EMP is necessary because ESAs are now bundled into the per-treatment payment amount and “overutilization and the incentive for overutilization has been eliminated from the ESRD PPS.”

Monday’s ESRD PPS proposed rule was accompanied by a press release and fact sheet. It is scheduled to be published in the August 9 issue of the Federal Register. The comment period for the proposed rule ends September 27, 2019. The final rule is expected around the beginning of November and will become effective January 1, 2020.

 
 

Making Part D Access Affordable: Revising the Prescription Drug Benefit for 2020+

 
 

Policymakers are discussing ways to limit the OOP expenses faced by patients in the Medicare prescription drug benefit (Part D) to make prescriptions more affordable.

Xcenda’s original research, done on behalf of the Council for Affordable Health Coverage, examines the 2 models Congress is considering, with patient profiles for typical patients with various conditions, to determine the impact of the models on patient OOP spending.

View and download the report >

 

 

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LEGISLATIVE UPDATES
 

Legislative Bytes

 
 

Congress is out on recess so, after this, expect some quiet on the legislative front until after Labor Day.

  • Sen. Richard Burr (R-NC) introduced S.2326 that would provide for expedited coding and coverage of novel medical products.
  • Rep. Rosa DeLauro (D-CT) introduced H.R.4106 that would restrict direct-to-consumer drug advertising.

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XCENDA BLOG POST
 

A Kick in the Butt(igieg) for Copay Coupon Programs

 
 

As someone who follows patient assistance programs closely, last week’s Senate Finance Committee proposal to change ASP to exclude commercial copay coupons was big news. Specifically, section 102 of the proposed legislation would exclude the value of coupons or financial assistance for commercially insured enrollees for a product’s ASP, starting July 1, 2021.

For years, manufacturers have deployed commercial copay assistance to assist patients who have experienced financial hardships in affording out-of-pocket expenses, particularly as payers place more of the burden on patients at the point of sale. Depending on the payer mix of the patient population, the proposed provision within the overall bill could significantly affect a product’s ASP by applying downward pressure, particularly for products treating a robust slice of both Medicare Part B and commercial enrollees.

As the federal government via proposed legislation and regulatory efforts continues to place more scrutiny on commercial copay assistance, we are always happy to help decipher the effect and model any potential impacts to patients. You can reach me at Corey.Ford@xcenda.com.

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THE VALUE CORNER
 

Biden Our Time on Value Initiatives

 
 

Yesterday, the Institute for Clinical and Economic Review (ICER) posted the final presentation in its Visiting Fellows Program 2019 webinar series, which invited health economists to share their perspectives on appropriate cost-effectiveness thresholds in the US. The latest topic focused on equity considerations and choosing between health sector and societal perspectives. All 5 webinars in the series can be accessed on ICER’s website.

Earlier this week, the Innovation and Value Initiative (IVI) published a research brief focusing on “insurance value,” a novel concept that explores how new treatments may bring broader societal-level value to healthy individuals who may be at risk of needing innovative treatments in the future.

Additionally, Intermountain Healthcare, a Utah-based nonprofit medical group of 2,400 physicians and advance practice providers, recently launched a new comprehensive health platform company called “Castell,” focused on elevating value-based care capabilities for providers, payers, healthcare systems, and accountable care organizations. Castell will offer guidance on implementing Intermountain’s proprietary clinical care model, analytics to help guide value-based standards in decision making, and streamlining affiliated network management and technology to help providers with virtual care, patient experience, and social determinants of health.

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
 

Laying out the Trump Card: US Plans to Import Drugs

 
 

On Wednesday, the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) announced an action plan for the safe importation of drugs from foreign markets. Although the goal is “to provide safe, lower-cost drugs to consumers,” the action plan was met with concerns from Canadian officials and US biopharmaceutical industry representatives.

The action plan involves 2 pathways. Through the first pathway, a Notice of Proposed Rulemaking (NPRM) would authorize states, wholesalers, and pharmacists to submit demonstration project plans for importing drugs approved by Health Canada. The plans would be reviewed by HHS, and if approved, the importation would be valid for a limited time frame and require reporting on a regular basis to show that safety and cost requirements are maintained. Importation would not be eligible for a subset of drugs, such as controlled substances, biologicals, or drugs that are infused or intravenously injected.

The second pathway would allow US manufacturers that sell versions of their FDA-approved drugs overseas to import their foreign forms into the US. Manufacturers could then market the imported products using new National Drug Codes and sell them for lower costs than required by their US distribution contracts. Manufacturers would have to provide evidence that there is no difference between the versions they sell overseas and in the US.

Although the HHS has shifted its view on importation, Canadian officials are concerned drug importation may inhibit domestic access to medications and increase costs for Canadian residents. In addition, US industry representatives have expressed concerns about safety. Although it is not clear when the NPRM or FDA guidance to manufacturers will be released, this action plan contributes to the Trump administration’s continuing efforts to offer proposals to lower drug prices for Americans.

 

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
 

To be fair, Canada has 37 million people. We have a lot more.

“We recognize the new situation brought on by American announcements and Health Canada will continue to ensure that our priority is always ensuring that Canadians have access to the medication they need at affordable prices.”

— Canadian Prime Minister Justin Trudeau, commenting on the Trump administration’s decision to allow prescription drug imports from Canada

 Source: “PM pledges access to medication as pharmacists, patient groups fear shortage,” CBC/Radio-Canada, August 1

 
POLICY BY NUMBERS
 

8.2%

 

BioPharma Dive analyzed nearly 200 life sciences companies with market values of at least $500 million. In 2018, more than 90% of CEOs were men. Just 16 of the 194 executives (8.2%) included in the analysis were female.

Source: “Follow the money: How biopharma CEOs and workers got paid in 2018,” BioPharma Dive, May 29

 

 

Copay Accumulators: Are Your Patients Really at Risk?

 
 

As patients face a growing share of healthcare costs in the United States, pharmaceutical manufacturers have sought to ease the burden and break down medication access and adherence barriers by offering copay assistance and other support programs.

But payers have recently started to limit the financial support allowed by such programs by adopting copay accumulators, which prevent manufacturer coupons and copay assistance from counting toward patients' deductibles and other out-of-pocket costs.

How to assess your readiness and prepare for the impact of copay accumulators >

 
 

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:

Corey Ford | Anuja Kanaskar | Jennifer Le | Scott Shields

PRODUCTION:

Kylie Matthews | Ellen Olson

 

Aug. 2, 2019

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