HealthCare Roundtable e-News – October 31, 2018

Azar: Part B International Price Referencing Proposal Moving Forward

HHS Secretary Alex Azar said President Donald Trump is not backing down from an advance notice of proposed rulemaking that would pilot international price referencing for Medicare Part B drugs. In his appearance at the Brookings Institution Friday (Oct. 26), Azar said that the administration is, however, open to suggestions on how to implement the demo. (InsideHealthPolicy)

“This President is not turning back: We will put American patients first by reforming how Part B pays for drugs, and this reference pricing model will happen,” Azar said.

He said that drug manufacturers had five months to propose different ways to introduce competition for Part B drugs, but none of them did. HHS is still “open to input,” Azar said, but it does not mean that the administration will back away from price referencing.

“You can be part of the solution in bringing market-based, competitive ways of compensating for drugs and lowering patient out of pocket costs, or you can put your head in the sand and pretend change is not coming and you’ll get whatever comes at you,” Azar said.

Azar said Friday there is some wiggle room in how the demo is structured, but made it clear that the concept of international reference pricing is not up for discussion. He is looking for feedback from stakeholders such as doctors, patients and hospitals on ways to ensure the reforms work for them. (InsideHealthPolicy)

Lawmakers Add to Calls for CMS To Revisit ACO Changes

A bipartisan group of nine House lawmakers is asking CMS to reconsider its proposals to cut the savings Medicare accountable care organizations can earn without taking on risk and shorten the length of time before ACOs must share savings and losses with the agency.

“To ensure that ACOs have a sufficient business case to participate in this voluntary program, we urge CMS to modify these proposals in the final rule,” the lawmakers say in an Oct. 23 letter to CMS Administrator Seema Verma. CMS CMMI Director Adam Boehler has said he is not concerned if participants drop out of the programs, saying that others will take their place in the system. (InsideHealthPolicy)

Specifically, the lawmakers asked that CMS reconsider proposals to cut the time new accountable care organizations (ACOs) have in shared savings-only models from six years to two and to decrease the shared savings rate from 50 percent to as low as 25 percent.

Lawmakers on the list include Reps. Diane Black (R-Tenn.), Peter Welch (D-Vt.), Suzan DelBene (D-Wash.), Gene Green (D-Texas), David Roe, M.D. (R-Tenn.), Greg Gianforte (R-Mont.), Tom Reed (R-N.Y.), Brad Wenstrup, M.D. (R-Ohio), and Roger Marshall, M.D. (R-Kans.).

In August, CMS proposed significant changes to the MSSP, by far the largest federal ACO model, with 561 participants. At the center of the proposed rule, called “Pathways to Success,” is a core belief that ACOs (accountable care organizations) ought to move more quickly into two-sided risk payment models so that Medicare isn’t on the hook for money if the ACO outspends its financial benchmarks. (Health Care Informatics)

In their September letter, the Association of American Medical Colleges, American College of Physicians, America’s Essential Hospitals, America’s Health Insurance Plans, American Medical Association, Health Care Transformation Task Force, Medical Group Management Association, National Association of ACOs and Premier say that because ACOs are voluntary, the right mix of risk and reward is necessary for the program to continue to grow. Program growth, the stakeholders say, is a long-standing bipartisan goal and an important aspect of the MACRA-created system. (InsideHealthPolicy)

White House Reviewing Part D Rule To Address High Cost of Drugs

The White House budget office is reviewing a proposed rule to lower drug prices and reduce out-of-pocket costs by reforming Part D and Medicare Advantage, the office’s website states. The rule follows a separate proposed rule on Part D and MA that CMS posted Friday, October 26.

The rule proposed Friday stated that drug prices changes are coming in a separate rule, and the same day that rule arrived at the Office of Management and Budget for review. It isn’t clear why CMS is proposing separate rules on Part D and MA.

Last week President Trump made his first visit to the Department of Health and Human Services to announce changes to how Medicare will pay for some prescription drugs. But those changes are limited and apply only to drugs administered directly by a doctor under Medicare’s Part B program. They’re also only being implemented as a five-year experiment confined to just half the country.

A bigger way the administration could move the lever on drug prices is through Medicare Part D – the prescription drug program Congress created in 2003 to help seniors afford their medications purchased at the pharmacy counter. While Part B makes up just 3 percent of Medicare’s total costs, Part D is responsible for 15 percent of total costs. (Washington Post)

OMB’s website says the new Part D rule is economically significant but offers no additional details. (InsideHealthPolicy)

Court Signals Support For Short-Term Plans, Won’t Rule Before December

Federal DC district judge Richard Leon poked several holes in the plaintiffs’ arguments against the expansion of short-term health insurance plans and seemed to agree with the Trump administration’s defense of the plans at a preliminary injunction hearing Friday. (InsideHealthPolicy)

A court ruling on whether to block the administration’s controversial move to extend the duration of the plans won’t come before the end of the year, following the Affordable Care Act’s latest open enrollment period, he said.

Leon argued it is impossible to know at this time whether the plans would cause irreparable harm, questioning the Obama administration’s move to shorten the duration of the plans and arguing that short-term plans help get more people covered.

In the high-profile lawsuit, Association for Community Affiliated Plans et al v. United States Department of Treasury et al, seven stakeholders are asking the court to suspend the short-term term health insurance rule prior to the Nov. 1 start of open enrollment, arguing the rule is arbitrary, capricious and an overreach of administrative authority.

Leon rebuffed the plaintiffs’ contention the court could render a decision days before the Nov. 1 start of ACA open enrollment as “not practical,” because the case is of such large national and political significance. At the earliest, he said, he would issue a claim by the end of December.

The administration’s August rule expanding short-term plans allows the plans to run for up to 364 days, reversing an Obama-era regulation restricting the plans’ duration to three months. The rule also lets consumers renew the plans for up to three years.

Leon said that short-term health plans would help uninsured young people get coverage, which he called a “net gain for society.” (InsideHealthPolicy)