HealthCare Roundtable e-News – August 13, 2018

CMS Proposes Changes to ACO Participation in Medicare Shared Savings Program

CMS proposed last Thursday an overhaul to the Medicare Shared Savings Program by retiring several participation options. Tracks 1 and 2 of the program will be removed in favor of a basic track, which will provide a smaller window for an ACO to be upside before it must take on modest downside financial risk. The track would enable accountable care organizations to start under a one-sided model and then phase in higher levels of risk. The agency is planning to create an enhanced track, which will be based on the program’s current Track 3.

The agency also proposed limiting the amount of time an ACO can remain in an upside-risk arrangement from six years to two years, or one year for ACOs that previously participated in the MSSP under upside-only risk. The agency will authorize the termination of ACOs with multiple years of weak financial performance and allowing certain ACOs under performance-based risk to offer incentives to patients for taking steps to improve their health. ACOs in the two years of an upside-risk arrangement would get 25% rather than 50% of savings.

“After six years of experience, the time has come to put real ‘accountability’ in Accountable Care Organizations,” CMS Administrator Seema Verma said in a statement. “Medicare cannot afford to support programs with weak incentives that do not deliver value.”

HSS Secretary Alex Azar has commented before on the value-based care of ACOs, while also noting that ACOs haven’t been delivering results that were promoted by the Obama Administration. The rule had been pending at OMB for about three months, unnerving organizations that had been waiting for guidance on the future of the program.

Under Obama-era regulations, ACOs that started in Track 1 in either 2012 or 2013 are supposed to move to a risk-based model by the third contract period next year. ACOs with expiring contracts will have the option of continuing under the current rules for another six months.

The Medicare program said it would phase out its no-risk model beginning in 2020.

Committee Chairs Author Letter To OMB To Consider Impact of PBM Industry Reforms

Chairman of the Senate Finance Committee, Sen. Orrin Hatch (R-Utah), and Chairman of the House Energy & Commerce Committee, Rep. Greg Walden (R-Oregon), on Thursday asked the White House Office of Management and Budget to consider the economic impact of policies the Administration is supporting to reform anti-kickback laws with respect to drug rebates. The letter is considered beneficial to pharmacy benefit managers that have the most to lose from changes to anti-kickback law’s safe harbors.

“Depending on the nature of the policies contemplated, possible changes could ripple across the health care sector, altering a major sector of the U.S. economy that Americans depend on for their health and well-being. As such, we ask that you ensure that the proposed rule include a robust regulatory impact analysis prior to clearing it for publication,” the Chairmen wrote.

Currently, the rebates have a safe harbor protection, meaning they cannot be considered kickbacks designed to get business from federal healthcare programs. The text of the proposed rule is not available yet, hence the speculation from Congress and the healthcare industry. But the rule is titled, “Removal of Safe Harbor Protection for Rebates to Plans and [Pharmacy Benefit Managers] Involving Prescription Pharmaceuticals and Creation of New Safe Harbor Protection.”

The lawmakers worry that administration officials are not fully committed to study the potential economic impact of the changes they’re contemplating, which would have a far-reaching impact well beyond health care markets. “Irrespective of the support, concerns, and questions that result from this proposed rule, removing safe harbor protections for rebates used to purchase prescription drugs would alter any federal, taxpayer-financed program to which it applies, changing regulations and practices that have been acceptable for decades,” they wrote.

A copy of the August 9 letter can be found here.

Opioid Epidemic: Rep. Walden Holds Roundtable with FDA Commissioner Gottlieb

Representative Greg Walden (R-OR), Chairman of the Energy and Commerce Committee, held a roundtable Tuesday morning in his district to discuss the opioid abuse crisis and ways to tackle the issue. FDA Commissioner Scott Gottlieb was present for the roundtable, where he spoke about efforts by the FDA to strike the right balance in opioid prescriptions.

Chairman Walden highlighted the House’s recent passage of H.R. 6, the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act, and its progress in aiding the fight. Walden also addressed potential catalysts of the problem with letters sent by committee leaders pressing opioid manufacturers, who should look to consider their role in the epidemic and ways they can work with committee to improve how the drugs are being marketed.

Commissioner Gottlieb spoke about funding to ramp up efforts to intercept illegal substances coming into the US. More than 800 million packages were mailed to the U.S. last year, with this year’s number potentially exceeding 1 trillion, and Gottlieb claims that this provides a gap through which illicit substances can be shipped into the U.S. These are the gaps that they will attempt to plug.

CMS to Address Drug Costs and Changes to Medicare Advantage Plans

Several rulings this past week have recently passed in an effort to double down on drug prices and affordability. The Trump Administration’s efforts to tackle the issue include an update to Medicare Advantage plans, which will now incorporate a process called step therapy into medical practices; the process will require patients getting drugs in a doctor’s office or the hospital to try lower-cost medicines before moving up to more expensive ones.

CMS also recently issued its final rule on the Inpatient Prospective Payment System, a push by the agency to increase transparency by requiring hospitals to post list of their standard charges online. The rule doesn’t require posting any more information than hospitals are already mandated to provide to the public, but CMS has issued a request for information seeking input on furthering pricing transparency.

CMS Administrator Seema Verma stated that the agency is concerned with differentials in the wage index floor that show geographic disparities in payments favoring urban over rural hospitals. This final rule preemptively allows the imputed wage index floor to expire for all-urban states.

Other tactics presented by the Trump administration include a reevaluation of the way rebates are handled and encouraging value-based care to lower drug prices, as well as increasing competition and leveling the playing field against foreign drug costs. FDA Commissioner Scott Gottlieb has become the Trump administration’s lead proponent for increasing competition by embracing the use of generic drugs and an “action plan” to encourage the development of biosimilars

There is some back and forth on whether these strategies will have a true impact. Ameet Sarpatwari, an instructor in medicine at Harvard Medical School in Boston, said policies the administration has rolled out thus far “alone will not translate into meaningful cost savings for most Americans.” While Mark McClellan, director of the Duke-Margolis Center for Health Policy in Durham, N.C., and a former CMS administrator, said that although none of the initial steps has “fundamentally transformed drug prices,” there is “a lot going on inside the administration.”

Although many details have yet to be announced in relation to promoting competition and tackling rebates, it is expected that more blueprints will be incrementally rolled out.