A federal judge sides with the Trump Administration on price transparency between hospitals and payers.

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June 26, 2020


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Editor’s Note: Stick a fork in us; we’re done. We will be taking a break next week to celebrate the Fourth of July and will be back in action on July 10.


I’ll Have the MRI for $1,500: Judge Upholds Hospital Price Transparency Rule

On Tuesday, a federal judge upheld a rule by the Trump administration that requires hospitals to publicly disclose the rates they have negotiated with health insurers. The rule was introduced in November 2019 as part of the administration’s push to improve price transparency within healthcare. Under this rule, hospitals are required to publish standard charges based on negotiated rates for each item and procedure offered, including imaging and laboratory tests. Hospitals that fail to comply with this rule would face fines of up to $300 per day. The final rule is scheduled to take effect January 2021.

Major hospital groups, including the American Hospital Association, filed a lawsuit against the Trump administration, stating that the rule violates the First Amendment and exceeds the scope of the Department of Health and Human Services’ (HHS’) legal authority. The plaintiffs also argued that this rule would increase administrative burden on hospitals and that disclosing negotiated rates will not lead to decreased costs or benefit the end consumers. In fact, the plaintiffs pointed out, the final rule could lead to price increases by removing the competitive nature of negotiations. 

In his decision, the federal judge stated that the HHS acted within its legal authority and that the final rule was constitutional. The American Hospital Association intends to appeal the judge’s decision. Nonetheless, the judge’s decision this week is a rare victory for the Trump administration’s healthcare agenda and its efforts to increase price transparency; many of its efforts, like requiring drug pricing in commercials, have been overruled. 

The Future of Payer Engagement: How Pharma Can Break Through

Payers and IDNs representing over 275 million covered lives count on FormularyDecisions for pertinent product information pre-, peri-, and post-approval.

In a new article, Xcenda's Matt Sarnes and FormularyDecisions' Allen Lising share insight on the product information payers and other healthcare decision makers find most valuable. Learn how to meet them where they are.

Read article >


Legislative Bytes

  • House Democrats introduced HR 1425 that would strengthen the Affordable Care Act (ACA), incentivize states to expand Medicaid, increase payment to Medicaid providers, and create new drug price negotiation tools for the Medicare program. 
  • The House Energy and Commerce Committee held a hearing on oversight of the administration's response to the COVID-19 pandemic. Witnesses:
    • Anthony Fauci, MD, Director, National Institute for Allergy and Infectious Diseases, National Institutes of Health
    • Admiral Brett Giroir, MD, Assistant Secretary for Health, HHS
    • Stephen Hahn, MD, Food and Drug Administration (FDA) Commissioner
    • Robert Redfield, MD, Centers for Disease Control and Prevention (CDC) Director
  • Senate Democratic Leader Chuck Schumer (D-NY), Senate Committee on Health, Education, Labor, and Pensions Ranking Member Patty Murray (D-WA), and 40 Senate Democrats sent a letter to HHS criticizing the administration's testing and contract-tracing efforts.
  • Rep. Mike Quigley (D-IL) introduced HR 7269 that would amend the Federal Food, Drug, and Cosmetic Act to establish a time-limited provisional approval pathway, subject to specific obligations, for certain drugs and biological products.

It’s Like in Excel When You Get the Circular Logic Error:
PAP in Medicaid Proposed Rule

As we covered in last week’s issue, the Centers for Medicare & Medicaid Services (CMS) dropped a proposed rule that would facilitate manufacturers, payers, and state Medicaid programs with engaging in value-based contracts, potentially decreasing drug costs.

As patient access champions, we were struck by the proposed changes to patient assistance programs. Medicaid best price (BP) and average manufacturer price (AMP) exclude manufacturer patient assistance like drug discount cards as long as the full value is passed along to the consumer. But, there is the issue of the increased use of copay accumulators.

Over the past 2 decades, health insurers have continued to place more of the out-of-pocket (OOP) burden for prescription drugs on patients, and, in turn, drug manufacturers have sought to minimize the financial impact with copay assistance to help patients pay for those costs. In recent years, health insurers in the commercial market have targeted this assistance, primarily by employing copay accumulator programs. Under these programs, insurers may exclude manufacturer-sponsored copay assistance or coupons from the calculation of a patient’s OOP expenses for the purposes of exhausting a deductible or hitting a plan OOP maximum.

Last month, in the HHS Notice of Benefit and Payment Parameters for the 2021 Benefit Year, CMS said that they would permit insurers to use copay accumulator programs in commercial plans, including in the employer and individual markets. And plans are encouraged (but not required) to disclose the use of accumulator adjustment programs on websites, brochures, plan documents, and other collateral materials. So it’s not transparent.

In the proposed rule, CMS noted that copay accumulator programs funnel the benefits of copay assistance to health plans and pharmacy benefit managers (PBMs) because patients take a much longer time to pay deductibles or exhaust OOP maximums. As a result, CMS proposed that BP and AMP exclusions apply only when manufacturers ensure the full value of assistance is passed to the consumer. 

So. CMS is encouraging copay accumulators. CMS is acknowledging that the full amount doesn’t go to patients. CMS is saying that it doesn’t have to be transparent but that manufacturers should know which payers are using accumulators. And all of this should be reflected in BP. 

If finalized, this proposal places the burden of tracking copay-accumulator programs on manufacturers. While manufacturers could assume that all patients receiving this assistance are on copay accumulators, the impact on BP would be significant. Another route would be to establish infrastructure to determine when PBM copay-accumulator programs are being used to siphon benefits from patients. Reimbursement hubs represent a logical touchpoint. Or manufacturers may throw up their hands and look for alternate ways to help patients. 

We stand ready to help.  Please contact corey.ford@xcenda.com to explore options or even reminisce on the music from the 1990s. CMS’ philosophical reversal on accumulators while penalizing manufacturers offering copay assistance is a little too ironic, yeah, I really do think…


Dataset Geek Out: Medicare Populations at Higher Risk of COVID-19

On Tuesday, CMS released a preliminary Medicare COVID-19 data snapshot gathered from Medicare beneficiary claims. The data snapshot stratifies the Medicare population based on socio-economic status, ethnicity, and pre-existing conditions and is meant to illuminate disparity in COVID-19 treatment outcomes based on the 3 stratifications. 

The data account for approximately 325,000 Medicare beneficiaries who were diagnosed with COVID-19 between January 1 and May 16, a prevalence rate of 0.52% within the Medicare population. Among those who tested positive, 110,000 were hospitalized, of whom 30,800 died. The comorbidity associated with the highest increase in mortality was end-stage renal disease (ESRD), increasing the odds of death due to COVID-19 infection to 1.3%. ESRD is often associated with comorbidities of heart disease and diabetes. 

Socioeconomics and ethnic identification were shown to be risk factors for increased likelihood of COVID-19-related hospitalizations. The greatest increase in hospitalization was seen in Hispanic and black populations compared to their Asian and white counterparts. The greatest deviation was in the black population, which was over 3 times more likely to require hospitalization compared to Asian and white populations. Beneficiaries with dual-eligibility status (ie, those enrolled in both Medicaid and Medicare) were at an increased risk of hospitalization: 1.4% compared to 0.33% for those with only Medicare. Although segmentation by demographic characteristics is important, it is also important to remember that the populations and risk factors may overlap. 

The data snapshot shows the populations on whom COVID-19 is having the greatest health impact, a finding that may improve the ability of the government and healthcare system to deliver a targeted response to COVID-19 prevention. In addition to the increased health and safety of at-risk populations, the economic burden—currently $23,094 per COVID-19-related hospital stay for Medicare fee-for-service beneficiaries—may also be reduced through targeted interventions. Continued monitoring and analysis of claims data by CMS will help direct future policy and may help lawmakers determine where first access to a potential vaccine will be most impactful. 

The data snapshot was accompanied by a press release, FAQ, and CMS Administrator Seema Verma blog post.

Two Are Better Than One: HHS and Morehouse Announce Partnership 

On Tuesday, the HHS Office of Minority Health (OMH) announced a strategic partnership with the Morehouse School of Medicine to address the social determinants of health in communities hit hardest by COVID-19. This partnership is part of a $40 million initiative—the National Infrastructure for Mitigating the Impact of COVID-19 within Racial and Ethnic Minority Communities (NIMIC)—to promote COVID-19 information and resource dissemination to racial and ethnic minority, rural, and other vulnerable communities. 

The COVID-19 pandemic has been especially impactful in underserved communities. The underlying social determinants of health, like employment status, educational attainment, housing conditions, or food insecurity, are reflective of the inequities experienced by individuals of marginalized identities. These social determinants leave many communities particularly susceptible to the impacts of a pandemic and require a coordinated community and system response to bolster public health. A priority of the NIMIC is to collaborate directly with local organizations, as they can tailor information and resources to the specific needs of their communities. 

In its partnership with OMH, the Morehouse School of Medicine will spearhead efforts to build a network of local, tribal, state, and federal organizations to support vulnerable communities during the COVID-19 pandemic, with educational resources on testing, vaccination, and other health-related services. 

The power of partnerships is crucial during a pandemic; no one can do this alone. As United States (US) Surgeon General Vice Admiral Jerome M. Adams, MD, MPH, said, “This initiative has at its core the community-based organizations who know their people best and who are committed to working collaboratively to reduce health inequities and make them healthy and safe.” 


COVID-19 Resources

Coronavirus Task Force Resources and Updates

Centers for Disease Control and Prevention (CDC) Information for Healthcare Professionals

Centers for Medicare & Medicaid Services (CMS) Current Emergencies (Coronavirus)

Food and Drug Administration (FDA) COVID-19 Information

Medicaid and Children’s Health Insurance Program (CHIP) Resources

American Medical Association (AMA) Physician’s Guide to COVID-19

Health Affairs COVID-19 Resource Center

National Foundation for Cancer Research (NFCR) Coronavirus Resource Center for Cancer Patients and Caregivers


Once More, With Feeling: ICER Takes a More Studied Look at Remdesivir 

On Wednesday, the Institute for Clinical and Economic Review (ICER) announced the release of its revised pricing models for remdesivir for the treatment of COVID-19. These models, which were initially published on May 1, include 2 alternative pricing paradigms: (1) a cost recovery model, and (2) a traditional cost-effectiveness model. The updated analyses incorporate changes based on recently released clinical data, revised cost estimates, public comments, and projected manufacturer research and development costs. The original cost recovery benchmark price of $10 has been updated to a range of $1,010 to $1,600, which now includes assumptions regarding the manufacturer’s 2020 development expenses, uptake of remdesivir, and consideration of early examples of real-world generic pricing. Additionally, the original cost-effectiveness benchmark price of $4,460 is now modestly higher at a range of $4,580 to $5,080 per treatment course based on new peer-reviewed data. A scenario analysis assuming the incorporation of dexamethasone as standard of care produced a lower benchmark price range for remdesivir of $2,520 to $2,800 in the updated assessment, although this was based on early, non-peer-reviewed data. ICER will continue to assess the evolving clinical landscape, including new data on remdesivir, dexamethasone, and other emerging therapies, as part of future updates. 

On Tuesday, the Health Affairs Blog published an article discussing the use of novel value elements when assessing COVID-19 vaccines and treatments. The article references a 2018 report from the International Society of Pharmacoeconomics and Outcomes Research (ISPOR) Special Task Force on Value Assessment Frameworks addressing novel value elements that are not typically incorporated in traditional cost-effectiveness analyses, and the article discusses the significance of each element in the context of the COVID-19 pandemic, including (1) fear of contagion, (2) insurance value and reduction in uncertainty, (3) severity of disease, (4) value of hope, (5) real option value, (6) scientific spillovers, and (7) equity. The article also discusses family spillover effects, which is an additional value element not mentioned in the ISPOR report. The authors encourage stakeholders to consider these novel elements of value when assessing COVID-19 vaccines and treatments, noting that ICER’s original analysis of remdesivir failed in this regard. 

Last Friday, ICER announced the release of its 2020 Unsupported Price Increase (UPI) assessment protocol, which outlines ICER’s methods for examining significant prescription drug price increases over a 1-year period for up to 13 selected drugs, based primarily on which net price increases resulted in the largest overall budget impact for the US healthcare system. Ten drugs will be selected for review based on ICER’s pricing calculations, and up to 3 additional products will be included based on public comments. ICER will determine whether new evidence for each drug demonstrates that it is significantly more beneficial than previously understood and warrants its increased price. ICER will not publicly announce the final list of drugs that will be reviewed, as manufacturers are concerned that they will be stigmatized before ICER decides whether the increase is unsupported. ICER is currently accepting feedback on additional drugs to include in its UPI assessment through July 17.  

Also last week, Medical Decision Making Policy & Practice published a study examining the alignment of patient preferences with value frameworks through a discrete-choice experiment of patients with breast cancer. Results indicated that while the relatively high value placed on treatment efficacy in most value frameworks is aligned with patient perspectives, other factors that patients considered important are often not included in value frameworks, such as OOP treatment costs, route of administration, and availability of reliable tests to gauge treatment efficacy. The authors agree that although these frameworks are an important step in assessing the value of medications in the context of a complex treatment landscape, they are still largely driven by expert judgment and do not account for heterogenous patient preferences or other elements of value that patients consider important.

If you need assistance with all things ICER or value-related, please contact Linnea Tennant.

Xcenda Research Featured in Managed Healthcare Executive

Managed Healthcare Executive recently featured a study from Xcenda about ICER's influence on healthcare delivery and managed care organizations.

The article, ICER reports play significant role in managed care decision-making, study finds, is an in-depth look at the data based on the FormularyDecisions platform. Study authors Linnea Tennant, PharmD, MBA, MS, Assistant Director of Global Health Economics and Outcomes Research, and Anne Loos, MA, a Global Health Economics and Outcomes Research Analyst, provide perspective about their findings.

Read article >


I’d Like to Think I Haven’t Done my Best Yet: 
Don Johnson and Bundled Payments Have Something in Common

The June issue of Healthcare includes a research article for a new Cancer Episode Model (CEM) designed by the Hawaii Medical Service Association (HMSA), Blue Cross Blue Shield of Hawaii, and the University of Pennsylvania. The CEM was modeled after Medicare’s Oncology Care Model (OCM), though it utilizes stricter participation criteria and different performance metrics and is uniquely applied to commercial and Medicare Advantage plans. As a result of the refined criteria, the study provides new insights into how bundled care models can be implemented in the oncology setting.

Study Design
The CEM used OCM as a base for the study design but made several notable changes, such as including surgical procedures, radiation treatment, and laboratory testing as a part of the bundle to standardize services. CEM determines the start of assessable oncology treatment by “triggers” that include the first qualifying outpatient chemotherapy infusion, injection, or oral medication used to treat a qualifying cancer. Inpatient chemotherapy was explicitly excluded to control for special cases. Additionally, the CEM practitioners narrowed their study focus using new exclusion/inclusion criteria:

  • CEM was limited to cancer types with well-defined clinical pathways: breast, colorectal, and lung.
  • CEM did not include patients with significant comorbidities (eg, HIV, other cancers, pregnancy).
  • CEM excluded patients without continuous commercial or Medicare Advantage health insurance.

Performance Measures
Quality measures in the CEM model include 2 outcome measures (Chemo-Related ED Utilization and Chemo-Related Inpatient Admission ) and 4 process measures (Documentation of ECOG Performance Status, Documentation of Cancer Staging, Documentation of Advance Care Planning, and Patient Satisfaction Survey). The 6 measures account for 20% of the total quality score. CEM’s performance algorithm is intended to make quality benchmarks achievable and “tractable”; the program leaves room for future performance metrics.

Financial Incentive
CEM allowed up to 75% of the practice’s prior cost during the first benchmark period. By the third performance period, practices applied 100% of network costs toward their benchmarks, with the intention of rewarding improvement without penalizing already high-performing practices. This deviates from OCM, which only required regional benchmarking for providers who did not have enough patients to perform a regression analysis. 

CEM rewards practice performance based on a first-dollar shared savings program. Conversely, OCM’s set-discount model set a minimum shared savings threshold, which practices found difficult to meet and likely resulted in reduced incentive to perform. The first-dollar approach intends to better incentivize practices by directly correlating shared savings with practices. The difference in allocation of shared savings between the 2 models is represented in the figure below.

Comparison of Sharing Savings Models for the CEM and OCM

Note: 2 examples of a single episode with an expected cost of $20,000 whose actual cost was $18,000. Panel A shows the CEM’s shared savings, for a net of $1,000. Panel B shows the OCM’s shared savings, for a net of $600. The dark blue box in Panel B represents the set discount that OCM requires before shared savings take effect. The green box represents the half of the shared savings that is kept by CEM or OCM, and the maroon box represents the half of the shared savings that is kept by the provider.

The CEM is one of the first applications of a bundled payment model to commercially insured patients. The unique inclusion/exclusion criteria should provide more reliable insights into how the CEM operates compared to the OCM, which allowed for comorbidities and many more disease states. The performance metrics and financial incentive system should allow relatively direct comparison of OCM and CEM, yielding insights that can be used to increase performance of not only OCM and CEM, but also future pilot models. 

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:


“Now is not the time to end a program that is working and successfully increasing testing capacity, especially for underserved communities in the state. Due to the recent rise of COVID-19 cases in Texas, cities need additional time to prepare for the transition to state and local control of the testing sites.”

– Sens. John Cornyn (R-TX) and Ted Cruz (R-TX), in a joint letter sent to HHS Secretary Alex Azar and FEMA Administrator Pete Gaynor urging the administration to grant an extension of the program for the testing sites in Texas

Source: “GOP Sens. Cornyn and Cruz say they don't understand why federal funds are being pulled from coronavirus testing sites,” CNN, June 25



In a survey of 2,009 women, more than 40% reported that because of the COVID-19 pandemic, they changed their plans about when to have children or how many children to have.

ISource: “Early Impacts of the COVID-19 Pandemic: Findings from the 2020 Guttmacher Survey of Reproductive Health Experiences,” Guttmacher Institute, June 25


Virtual Student Shadow Day

Friday, July 31, 2020 | 12:00–2:00 PM EDT
Experience a day in the life of an Xcenda expert! Spend a day learning about Xcenda, the healthcare industry, managed care, and more during our Virtual Student Shadow Day on July 31, 2020 from 12:00–2:00 PM EDT.

PharmD, PhD, MPH, and other related fields of study are welcome to join us to explore market access, health economics and outcomes research, clinical software development, and other areas that could be of interest for your future. Please note space is limited.

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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.


Jennifer Snow
Vice President,
Reimbursement and
Policy Insights,

Scott Shields
Associate Director,
Health Policy


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


Rachel Besse | Corey Ford | Scott Shields | Ryan Sullivan | Robin Tan | Annie Yan


Kylie Matthews | Tia O'Brien | Ellen Olson

June 26, 2020


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