Trump Administration announced price transparency requirements for hospitals and insurers.

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Nov. 22, 2019

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Editor’s Note: We are off next week and will return on December 6. Until then, we will be in Turkey Trots, trying to find a new recipe to add to the regular Thanksgiving rotation (because the usual green bean casserole is expected), and being aware of what we are grateful for while simultaneously trying to not snap at relatives. And we are grateful. Happy Thanksgiving (to our American and international readers).

 
FEATURED STORY
 

Plucking Hospitals and Insurers: Transparency Requirements

 
 

Last Friday, the Department of Health and Human Services (HHS) announced the release of transparency requirements for hospitals and insurers. The 2 transparency efforts are at different regulatory stages, with the Administration releasing the final rule for hospitals and the proposed rule for insurers. The hospital and (proposed) payer transparency requirements reflect President Trump’s June 24 Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First.

Hospital Transparency Final Rule

Effective January 1, 2021, the new regulations will require hospitals to make accessible specific “standard charge” pricing data for all “items and services” provided, “including individual items and services and service packages, that could be provided by a hospital to a patient in connection with an inpatient admission or an outpatient department visit for which the hospital has established a standard charge.”

Hospitals must post the following 5 “standard charges” for all items and services:

  1. Gross charge: The price on the hospital’s chargemaster with no discounts
  2. Payer-specific negotiated charge: The charge negotiated with a third-party payer
  3. De-identified minimum negotiated charge: The lowest charge the hospital has negotiated with all third-party payers for an item or service
  4. De-identified maximum negotiated charge: The highest charge the hospital has negotiated with all third-party payers for an item or service
  5. Discounted cash price: The charge for an individual who pays cash for an item or service

All hospitals will be required to make public 2 items related to pricing: 1) a machine-readable file containing a list of all standard charges for all items and services; and 2) a consumer-friendly list of standard charges for a limited set of “shoppable” services. (The regulation defines “shoppable” as a service that a consumer can schedule in advance.)

If the Centers for Medicare & Medicaid Services (CMS) identifies noncompliance, the agency will have the authority to issue warning letters, request a corrective action plan, and potentially impose civil monetary penalties up to a maximum of $300 per day.

Within hours of the rule’s release, the American Hospital Association, Association of American Medical Colleges, Children’s Hospital Association, and Federation of American Hospitals announced they would be filing a legal challenge to the rule on grounds that it exceeds the Administration’s authority. But with a penalty at $300 a day, the punishment for non-compliance is almost an incentive.

Insurer Transparency Proposed Rule

The Transparency in Coverage proposed rule would require most employer-based group health plans and health insurers offering group and individual coverage to disclose price and cost-sharing information to participants, beneficiaries, and enrollees. Payers would be required to disclose on a public site their negotiated rates for in-network providers and allowed amounts paid for out-of-network providers.

Specifically, the health plans and insurance issuers would be required to:

  • Provide real-time cost-sharing information through an online tool that would include an estimate of the participant’s cost-sharing liability for all covered items and services
  • Disclose rates for in-network and out-of-network providers on a public website

In addition, CMS proposes changes to medical loss ratio (MLR) requirements that would allow issuers offering plans that incentivize enrollees to shop for services from lower-cost, high-value providers to “share savings” in their MLR calculations.

The proposed rule also seeks comments on how healthcare quality information could be incorporated into the price transparency information made available under the proposal.

As with the hospital industry, health insurance plans wasted little time being critical of the transparency effort. Commenting on the proposed rule, America’s Health Insurance Plans (AHIP) noted that “consumers deserve transparency about out-of-pocket costs to help them make informed decisions about their own care,” and that “[t]ransparency should be achieved in a way that encourages—not undermines—competitive negotiations to lower patients’ and consumers’ costs and premiums.” AHIP observed that the proposed rule does not follow those concepts.

With every industry in the healthcare system battling tooth and nail over the Administration’s efforts to lower prices and empower patients, it is easy to understand how change is likely to be slow. There is no one answer to sustainability of healthcare spending—it isn’t just a focus on drug pricing—but chipping away and trying various potential solutions.

 
 

Effectively Communicating Pipeline Information to Drive Payers’ Attention

 
 

As payers are conducting product reviews for budgetary planning and formulary decision making, they are increasingly looking for information—data and evidence—earlier in their process, before regulatory approval.

What pre-approval information are payers looking for, and when do they need it?

What resources are available to both payers and manufacturers to help facilitate this information exchange?

Xcenda explored these questions at a recent presentation at AMCP Nexus 2019 where we provided clarity on:

  • The payer perspective and their current pre-approval needs
  • What payers are using as an active resource for pre-approval product reviews
  • The manufacturers’ role in pre-approval information exchange

Download the presentation to learn more about the information delivered at the conference.

 

HPW Rebuild

 
LEGISLATIVE UPDATE
 

Legislative Bytes

 
 
  • Senate and House Democratic leaders called on HHS to explain technical difficulties that hampered the federal health insurance exchange early in the new enrollment season; their letter cited an estimate from Get America Covered that as many as 100,000 fewer visitors signed up for coverage than it had projected.
  • Sens. Tina Smith (D-MN) and Kevin Cramer (R-ND) introduced the Insulin Affordability Data Collection Act (S 2855) that would direct HHS to study rates of diabetic ketoacidosis and “how high insulin prices make it more difficult for people with diabetes to adhere to their insulin prescriptions, and to calculate the amount of money Federal health programs could save if they didn’t have to treat Americans who need additional care because they are unable to afford their proper doses.”
  • Rep. David Cicilline (D-RI) introduced the Affordable Prescriptions for Patients Through Promoting Competition Act of 2019 (HR 5133).

HPW Rebuild

 
THE VALUE CORNER
 

On the Menu: Roasted ICER

 
 

At the end of last week, STAT published an opinion article about the Institute for Clinical and Economic Review (ICER) assessment process, stating that the framework may be a useful research tool, but its growing influence in real-world decision making threatens patients’ access to innovative therapies. The author argues that ICER’s methodology is designed to serve payers, and the lack of disease-specific experts, patients, and caregivers on ICER’s voting panels is a serious concern. The authors encourage all stakeholders, including drug innovators and patients, to stay involved in the evolution of ICER’s framework, especially since it has the potential to gain more influence in payer decision making.

Last Wednesday, the Innovation and Value Initiative (IVI) posted its comments in response to ICER’s Draft Evidence Report evaluating Janus kinase (JAK) inhibitors for the treatment of rheumatoid arthritis. IVI describes a need for more transparency in ICER’s analysis and specifically requests clarity around the implications of the modeling assumptions. IVI also questions the relevance of ICER’s analysis to decision making, stating that while the report provides information on the cost-effectiveness of different targeted therapies, it does not address the more important question regarding the appropriate treatment sequence.

Earlier this month, the Alliance for Patient Access posted 2 new YouTube videos titled, “What’s Wrong With ICER” and “Why Health Care Providers Should Care About ICER,” which target patients and providers, respectively. Both clips criticize ICER for having an undue influence in the treatment decision-making process and assert that health economists obstruct patients’ access to prescribed therapies.

The November issue of Value in Health includes a couple of interesting articles about value assessment. One paper titled, “Multicriteria Decision Analysis to Support Health Technology Assessment Agencies: Benefits, Limitations, and the Way Forward” discusses how multicriteria decision analysis can be used to support health technology assessment (HTA) but poses some substantial implementation challenges. Another publication titled, “What Is Next for Patient Preferences in Health Technology Assessment? A Systematic Review of the Challenges” reports on the methodological and procedural issues associated with integrating patient preferences in HTAs and highlights the need for additional research to support the inclusion of patients’ perspectives in order to inform better decision making.

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

HPW Rebuild

 
REGULATORY UPDATES
 

We’d Be Grateful for No Rules Next Wednesday or Friday:
IPI and Drug Importation Update

 
 

On Wednesday, the Office of Management and Budget (OMB) released the Fall 2019 edition of the twice-yearly Unified Agenda of Federal Regulatory and Deregulatory Actions, which provides timing estimates for regulations the Administration is planning to release in the coming year. We note updates to 2 interesting proposed rules below.

International Pricing Index (IPI)
The proposed rule for the IPI Model for Medicare Part B Drugs, which hardly needs introduction, is expected to be released this month. Since there are not many days left in November, it is possible we could be paging through it while enjoying pumpkin pie or (preferred by some, others think it is disgusting) chocolate pecan pie. In October 2018, HHS released an advanced notice of a proposed rule, the demonstration that would tie the price of Part B physician-administered drugs to an index composed of cheaper prices paid by other countries. As mentioned last week, the proposed rule is rumored to be in the process of rewriting to accommodate President Trump’s request to ensure that Medicare Part B drug prices are the lowest among developed nations.

Drug Importation
The proposed rule for importation, under review at OMB since the beginning of November, is expected to be released by January 2020. It would allow pharmacists and wholesalers to import prescription drugs from Canada if the imports pose no additional risks and will cut costs for Americans.

It should be said that the agenda is what is on the docket, but things do shift. Sometimes items that are on there never come out. That being said, we’re checking daily.

 

Don’t Let MS Get on Your Last Nerve: There’s a Value-Based Contract!

 
 

Last Thursday, UPMC Health Plan announced it has entered into a first-of-its-kind value-based agreement with Biogen for TECFIDERA (dimethyl fumarate) and AVONEX (interferon beta-1a), the 2 specialty therapies indicated for the treatment of relapsing forms of multiple sclerosis (MS). While past contracts for MS medications sought to link payment to surrogate clinical indicators such as MS-related relapse rates or hospitalizations, this first-of-its-kind contract aims to link reimbursement to MS patient-reported outcomes of disability progression in a real-world population.

According to a study conducted by UPMC Center for Value-Based Pharmacy Initiatives, worsening physical disability is a major concern among key MS stakeholders, including patients. UPMC indicated it hopes to align with its stakeholders by including a patient-reported outcome that is valued by its members, patients, and providers by incorporating evidence-based findings into contract development.

Connecting the value of the MS therapies to real-world outcomes of MS patients will aid in UPMC’s ultimate goal of mitigating disability progression and helping patients lead an active and healthy life. UPMC also stated this new contract is an initiative toward changing the paradigm for how medications are paid. In the announcement, Biogen indicated this alliance will hope to support a more sustainable and affordable healthcare system. This collaboration between UPMC and Biogen is a pertinent step toward medication access for patients with MS.

As an integrated delivery and finance system, UPMC has advantages when entering value-based agreements that other health plans and hospitals do not. For example, its member patients are not likely to seek care outside the system, so UPMC has cleaner data to analyze the benefits and value of such contracts.

 

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:

  • At Wednesday’s Senate Health Committee hearing, Chairman Lamar Alexander (R-TN) said Dr. Stephen Hahn is an “impressive choice” to lead the Food and Drug Administration (FDA).
  • The FDA approved the 25th biosimilar, Pfizer’s ABRILADA (adalimumab-afzb), a biosimilar to AbbVie’s HUMIRA (adalimumab).
  • Novartis confirmed to The Center for Biosimilars that it launched Sandoz’s pegfilgrastim biosimilar, ZIEXTENZO (pegfilgrastim-bmez), in the US. The wholesale acquisition cost (WAC) for ZIEXTENZO is approximately a 37% discount off the WAC for the reference product, Amgen’s NEULASTA (pegfilgrastim). There are now 11 biosimilars available on the market.


 
OPEN ENROLLMENT BY THE NUMBERS

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 38 states that use the HealthCare.gov platform for the 2020 benefit year, including the federally facilitated exchanges, state partnership exchanges, and some state-based exchanges.

 
Comparison of 2019 and 2020 Weekly Cumulative Open Enrollment Snapshots for HealthCare.gov

 

 

 
HEARD ON THE STREET
 

“I wrote the damn bill.”

 – Sen. Bernie Sanders (S-VT), responding to an invitation to discuss Medicare for All during Wednesday’s Democratic debate

Source: “Read: Democratic debate transcript, November 20, 2019,” NBC News, November 20

 
POLICY BY NUMBERS
 

4.8% and 4.2% vs 3.4%

 

Researchers at The Commonwealth Fund analyzed data from the Medical Expenditure Panel Survey’s Insurance Component, which polls 40,000 employers nationwide on health costs. They found that deductibles increased by 4.8% between 2016 and 2018, and premium contributions increased on average by 4.2%. Median income, meanwhile, increased by 3.4% in that same window.

Source: “Trends in Employer Health Care Coverage, 2008–2018: Higher Costs for Workers and Their Families,” The Commonwealth Fund, November 21

 
 

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:

Aishani Patel | Scott Shields | Linnea Tennant

PRODUCTION:

Laurie Kozbelt | Ellen Olson | Brianna Faulkner Hutchison

 

Nov. 22, 2019

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