House Passes Opioid Bill
Surprise, the House actually passed a bipartisan healthcare bill on June 22 that had support from almost all members of both parties. H.R. 6, Support for Patients and Communities Act, is a comprehensive opioid bill that combines more than 58 individual bills intended to address the national opioid epidemic. The bipartisan bill passed 396-14 with only one Democrat voting against it. The impetus was political pressure in an election year to address a problem that results in the death of 115 Americans each day. A recent CBS poll showed 71 percent of all Americans and 78 percent of Republicans support a government response to the crisis.
The bill also passed because it avoided controversy by not including large amounts of new funding. Members from both parties want to show progress on an issue that affects virtually every state before the November elections. Earlier this year, Congress approved $4 billion in new funding, which advocates argue is a drop in the bucket given the scope of the crisis. The House bill does not include any significant new funding, which is a disappointment to Democrats and advocates, however, they supported the bill to show some accomplishment in an election year on an issue important to voters. They are also hopeful there will be other opportunities for additional funding, e.g., in the Senate bill or through the appropriations process. Just before passage, the House bill included a provision to delay Medicare eligibility for end-stage renal disease (ESRD) patients for three months, saving the government $290 million over a decade. The Medicare savings will result in shifting costs to insurers and health plans. The impact on Medicare Advantage (MA) plans should be small since new ESRD beneficiaries are not eligible to enroll in an MA plan except for a small number of members who are already enrolled and age into Medicare.
So what does the bill do? It expands access to treatment, e.g., by allowing nurse practitioners and physician assistants to administer drugs that will avert death from an overdose, it encourages the development of non-opioid treatments following surgery and for pain relief, and it includes steps to stem the flow of illicit drugs through the mail from other countries. There are a number of Medicare and Medicaid provisions on substance use disorders (SUD) in HR 6.
Medicaid
- Conduct a demonstration project to increase provider capacity for substance use treatment and recovery services
- Mandate a beneficiary assignment program that identifies at-risk beneficiaries and assigns them to a pharmaceutical home program
- Require state Medicaid programs to have safety edits in place for opioid refills, monitor concurrent drug prescribing, and monitor antipsychotic prescribing for children
- Continue Medicaid coverage for incarcerated juveniles
- Continue Medicaid coverage for youth in foster care until the age of 26 if they move out of state
- Require the Centers for Medicare & Medicaid Services (CMS) to issue guidance on Neonatal Abstinence Syndrome (NAS) treatment options and require a Government Accountability Office (GAO) study on coverage gaps for pregnant women with SUD
- Provide additional incentives for Medicaid health homes for patients with SUD
Medicare
- Require Part D plans to establish drug management programs for at-risk beneficiaries
- Require e-prescribing for coverage of prescription drugs that are controlled substances under the Medicare Part D program
- Create a pass-through payment extension to encourage the development of clinically superior non-opioid drugs
- Add a review of current opioid prescriptions and, as appropriate, a screening for opioid use disorder (OUD) as part of the Welcome to Medicare initial examination
- Incentivize post-surgical injections as a pain treatment alternative to opioids by reversing a reimbursement cut for these treatments in the Ambulatory Service Center setting
- Provide access to Medication-Assisted Treatment (MAT)
- Evaluate the utilization of telehealth services in treating SUD
On June 20, the House passed a controversial separate bill that would allow Medicaid payment for 30 days during a year for a five-year period for substance abuse treatment at inpatient hospitals with more than 16 beds. Medicaid payment for inpatient substance abuse treatment is currently not allowed under the Institution for Mental Disease (IMD) exclusion policy. The cost of this expansion is estimated at $1 billion.
Next, both of these House-passed opioid bills will go to the Senate where three committees have been developing their own legislative package to deal with the opioid crisis. Many of the Senate provisions are similar to the provisions in the House bill. Expect to see congressional passage of a major opioid legislative package by the fall.
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Benefits are Submitted. What’s Top of Mind for 2019 Marketing & Sales?
Now that benefits have been submitted, the emphasis is turning to Sales and Marketing. When speaking with different Medicare Advantage plans across the country, you start to hear different things about what is going to be important for Marketing and Sales this Annual Election Period (AEP) and Open Enrollment Period (OEP). Here is some of the top “buzz” we have been hearing from plans:
- Bigger marketing budgets for 2019! Many MA plans are happy with their 2019 MA products and want to take advantage of this opportunity to grab market share. We see increased spending in New-to-Medicare programs, AEP direct mail, and social media especially.
- More diverse sales distribution strategies are coming into play this year. We have seen many MA plans really diversify their sales strategies and do the following:
- Increase Field Marketing Organization (FMO) arrangements and number of contracted agents.
- Pay attention to the metrics of the telesales team and either decide to outsource this function or develop much stronger training internally, plus build a more solid process to get leads to the proper sales channel quickly instead of just sending out sales packages and delaying the sales opportunity by several weeks.
- Build web strategies to increase online sales, especially to the New-to-Medicare segment.
- OEP is back! We have spoken to several MA plans about this new/old enrollment period, and here is what we are hearing from the marketplace:
- Make sure onboarding is perfect since you no longer have nine months to change a bad first impression. Make sure prospects understand what to expect when they enroll, and meet that expectation.
- Show the love to both your new members and those you have determined are most likely to leave in the first quarter. Member meetings with food help drive attendance as well as welcome calls.
- Although MA marketing is not allowed during the OEP, there are a few different ways to ensure your name is reinforced during the OEP:
- New-to-Medicare programs – running a few free-standing inserts might be helpful
- Brand marketing TV in the first quarter
- Medicare Supplement marketing, especially in January if you have Medicare Supplement
- Ensure your agents (both internal and external) understand the OEP rules and make the most of bringing you sales during this time
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Population Health Management Tactics to Succeed in Medicare Advantage
Population health. Many of us in the industry speak those words often without truly thinking about what it really means to us as a health plan or as a provider group, and often times, what it means to our data collection and analysis processes.
For many Organizations today, success in the Medicare Advantage market space is critical to our existence. This success will require many Organizations, whether plans, provider groups, or even vendors, to examine their capability to collect data, the process by which they examine data, and then how they tailor interventions to manage the results of that data for sustained improved health outcomes. After all, isn’t that why we have chosen our careers and are in this industry or taking care of folks to make a difference and hopefully improve results? I believe that is the case for many of us.
Population data management is key for many organizations as we drive to value-based care agreements within our provider networks. Providers need to be able to track their assigned member populations, the population health outcomes, the data associated to the Healthcare Effectiveness Data and Information Set (HEDIS®) measures, and quality measures, all while managing assigned risk.
In this writing, let’s focus on a few points to consider in your population health management tactics:
The whole population: While many of us segment data to focus on certain diagnoses, utilization, or measures for a targeted population, we leave out many patients/members who still have needs or influence healthcare spend. Focusing on an entire population, similar to how a plan defines a target population to enter a Special Needs Plan market, allows a plan to manage an entire group of people, their conditions/disease states, and respond to the group’s needs rather than a small segment. Using registries that identify and track a population over time allows a plan to view the total overall care received and identify gaps/trends. Looking at an entire population will also allow you to track improvements for overall health outcome measures while comparing for demographics, provider groups, benefit structure, and access.
Evidence-Based Clinical Guidelines: Today, one of the most important tools used in managing populations is the electronic medical record (EMR). Many health plans adopt different types of evidence-based clinical guidelines, which they apply to the administration of benefits filed within their bids. Evidence-based clinical guidelines are often times the guiding point for population management and the path followed for treatment decisions within the delivery of care. Providers need to utilize this guidance in order to treat a clinical problem, however, it is not readily available at their fingertips within the EMRs to manage patients/populations as desired by a plan. Embedding these guidelines with applicable decision trees within an EMR can allow a provider to best apply treatment options and enables the provider to manage a population aligning with projected costs/outcomes, which results in effective care planning and treatment adherence.
Overlay the above two tactics with correct identification of at-risk patients through appropriately defined criteria, which includes behavioral health attributes and accounting for the variation in the care delivery models and the associated patterns of utilization, will enable better designed care planning across the care continuum.
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Changes for How Biosimilars are Reimbursed
Biosimilars have finally been accepted by the popular crowd. Coverage year 2019 (CY2019) is going to see some changes for how biosimilars are being reimbursed. In 2015, the first biosimilar product, Zarxio (filgrastim), was approved in the U.S. An approved biosimilar is a medication that has been shown to be highly similar to a Food and Drug Administration (FDA)-approved biologic, the reference product. Only minor differences in clinically inactive components between the biosimilar and reference product are allowed, and there must be no meaningful clinical differences. However, a biosimilar is not considered a generic drug, which is approved through a different pathway. Due to the inherent complexities of biologics, it is not possible to make an identical copy of a biologic. Traditional, small-molecule drugs are made through a predictable set of chemical reactions, but biologics are made using manufacturing processes (e.g., cell production, purification processes) and living organisms (e.g., cell lines) that are unique to each manufacturer. Although not a generic from a molecular or manufacturing perspective, biosimilars do function as a generic in intent. Meaning, biosimilars help increase access to biologic medications and potentially lower healthcare costs through competition. There have been several company announcements touting the cost savings potential of biosimilars. A recent example is Mylan’s approval of it’s biosimilar Fulphila, which has promised that it will come to market with “double-digits reduction” in price compared to the reference product Neulasta.
The topic of drug pricing transparency and reform has been addressed by the current administration. At the recent Pharmacy Quality Alliance Annual Meeting, the Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma spoke about “The American Patients First Blueprint” and the four-pillared strategy. The four pillars are as follows:
1. Reducing Americans’ out-of-pocket spending
2. Increasing competition in the drug market
3. Improving negotiation to get a better deal for patients and taxpayers
4. Creating incentives for manufacturers to lower list prices
As part of this initiative, the access to biosimilar agents was addressed. Biologic products are among the most expensive medications on the market today and include treatments for cancer, diabetes, rheumatoid arthritis, and multiple sclerosis. The Biologics Price Competition and Innovation Act (BPCI Act) created an abbreviated licensure pathway for biological products that are demonstrated to be biosimilar to or interchangeable with an FDA-approved biological product. Within the Medicare Part D program, biosimilar uptake has been dependent on a number of factors, with formulary inclusion/placement being significant. In general, plans encourage use of lower-priced products, but current coverage gap discounts have provided financial advantages to the reference biologic products. This approach incentivized inclusion of the biologic reference products and resulted in beneficiaries potentially having higher cost sharing.
Essentially, when the beneficiary is in the “donut hole,” his/her resulting scenario is higher out-of-pocket costs for lower-cost medicines. Passage of the Bipartisan Budget Act of 2018 (BBA) has provided forward momentum for biosimilar uptake. The BBA, enacted on February 9, 2018, amended the definition of “applicable drug” for purposes of the coverage gap discount program to include biological products (finally). Effective CY2019, biosimilar and interchangeable products will be “applicable drugs” for purposes of the coverage gap discount program. This policy change ensures patients in the “donut hole” won’t get stuck with a bigger bill for the biosimilar than the reference product. It is important to note that while biosimilars are considered applicable drugs for manufacturer GAP discount purposes, they are still considered to be generic entities for Low Income Cost-Sharing Subsidy (LICS) purposes.
Part D Sponsors should make sure measures are in place to ensure biosimilar claims are adjudicating and being reimbursed as expected for the 2019 changes. GHG’s Pharmacy Solutions experts can assist you with operationalizing the new regulations. Contact us today!
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Three Costs of Marketing Material Errors
Now that bids have been submitted and the Centers for Medicare & Medicaid Services (CMS) is in the process of finalizing their posted models (check the dates on those versions, people!), it’s time to think about material development and review.
If you are in Compliance or Product Development, chances are you have some responsibility for the material creation and review process. If you have had your hand in the process for a few years, your process has surely evolved, but some things stay the same such as:
- CMS continues to issue enforcement actions for erroneous or late materials.
- Your competitors are always on the lookout for non-compliant and misleading material, and they have no hesitation to contact your Regional Office.
- You nail down a project plan, chock full of deadlines for your creative vendor to provide you versions, for business areas to confirm accuracy of language, to deliver pieces in a staggered manner, and it never seems to stay on track.
CMS is pretty prescriptive when it comes to their model materials. The agency is going through their internal overhaul of the guidelines for Medicare Advantage, Part D, and 1876 Cost plans (released July 20 of last year), and Gorman Health Group is preparing our team to review these ever-important documents for compliance and accuracy. Each year, we support organizations to ensure materials follow CMS’ strict requirements. And with proposed changes to marketing rules (for example, disclaimers), it is more important than ever to have experienced reviewers aiding you in the process.
The costs associated with errors in this area are threefold. The first and most visible are the Civil Money Penalties (CMPs) levied on a handful of sponsors each year. If you are new to the industry (or short-sighted), you might see these CMP notices and think the cost is a drop in the bucket. That’s where I bring you to a second and less visible cost, known only to affected plan sponsors. When errors are identified, there are added internal operations costs, not only in reprint and redistribution fees, but also in staff time to correct erroneous materials in a swift, drop-everything manner.
The third cost, which I believe is the least visible but most important, is the effect this impact takes on enrollees, especially on their perception of your plan. If a member enrolled due to misinformation, this is highly disruptive. This type of issue plants serious misgivings into enrollee and caretaker minds. Materials must be clear and accurate, and with pre-enrollment packet development in mind, you only have one chance to make a first impression.
Trust me – I do not love my own plan deductibles and cost sharing, but the materials provided to me clearly outline my obligations. When I or my family members have been provided inaccurate or incomplete information, I have dropped plans at the first open enrollment period, and I have been vocal about my experience. If you are striving for retention, do not cut corners when it comes to the review of your materials.
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The 2019 Model Marketing Materials Are Posted. Ready for What's Next?
As we await the Medicare Communications and Marketing Guidelines (MCMG), The Centers for Medicare & Medicaid Services (CMS) released the 2019 Model Marketing Materials which includes standardized outreach and educational materials for Medicare Advantage Plans, Medicare Advantage Prescription Drug Plans, Prescription Drug Plans, and 1876 Cost Plans.
Bids are due in a little over a week. You probably have an audit or two going on, and also your day-to-day work needs to be accomplished. CMS will continue to issue enforcement actions for reasons such as delayed and inaccurate materials. Don’t let other activities impact your attention to this area.
Here are three pieces of advice while we wait for the chapter:
- Do not reduce your internal quality control and compliance reviews of materials. While certain pieces will no longer be considered “marketing” and therefore will not require submission to the agency, you should anticipate that CMS (and your competitors) will be on the lookout for misleading and confusing communications.
- Formulate your questions after the release of the MCMG. If something is unclear, ask before you do. I am a huge fan of the adage, “it’s better to say sorry later than to ask permission now,” but I generally save that for when I am encouraging my precocious nephews. I do not recommend employing that strategy when working with Government Programs. The agency often releases FAQs, so get your questions in.
- Continue to plan for your review season. The deadline for plans to provide the ANOC/EOC, formularies, LIS rider and directories is September 30. That means it needs to be in their hands by that time so they can make informed decisions.
Once you have your Plan Benefit Packages in place (we are actively helping with that, too), Gorman Health Group's experienced staff can review your sales collateral to ensure your content is compliant. Our marketing material review service includes:
- Staff members with over 10 years of experience in CMS marketing material review
- A compliance review to ensure model instructions and MCMG are followed
- A benefit review to ensure accuracy of approved Part C and Part D services
- A structured process with quality checkpoints and full project management support
Contact me directly at rpennypacker@ghgadvisors.com for more information.
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In a recent HPMS memo, CMS confirmed the Medicare Marketing Guidelines will be renamed the “Medicare Communication and Marketing Guidelines.” Read more here.
Blending Network Strategy and Product Strategy
As more and more health systems and provider organizations successfully manage the shift from patient care to population health management, long-term health plan strategic planning should be blending network strategy with product strategy as a key indicator of the ability to achieve clinical and financial goals. The majority of providers are savvy at managing pay for performance and upside risk arrangements, and as providers have seen the margins narrow and plateau, plans have had to adapt and move beyond simple incentivizing for behavior change. We heard from the Centers for Medicare & Medicaid Services (CMS) the Accountable Care Organizations (ACOs) with upside-only risk have not performed as well or increased savings in comparison to those ACOs with downside risk and skin in the game. Systems that have ventured into managing downside risk and percent of premium arrangements and that have been successful have an appetite for more. Certainly moving up the food chain from a provider to a payer has been a topic of conversation among CEO’s of large integrated delivery systems. They have worked hard to align physician trust and referral networks, build a strong name brand in their local communities, and negotiated contracts with health plans that have met and exceeded care and cost containment goals, and the question of where do we go from here is top of mind.
As we have met and strategized with provider systems from baby steps to pay for performance to negotiating their first risk deal, there has been and still is, in some cases, a strong reliance on health plans to set clinical pathways and benchmarks. From the provider perspective, the reporting and transparency with the plan partners has been a key consideration in whom to collaborate with and how they have set internal benchmarks. However, systems are starting to realize and explore the administrative support organizations available and stepping out on their own to become a Provider-Sponsored Organization (PSO), which doesn’t seem as scary as it may have five years ago. Still, in meeting with providers, the biggest misconceptions have been what does it mean to be and how do the requirements differ from a PSO versus a Provider-Specific Plan (PSP-Narrow Network), do we meet the requirements, and what is the best option for us?
The answers to those questions spark the first steps when we begin to traverse the local healthcare landscape and blend the network and product offerings. Diane Hollie, our Senior Director of Sales, Marketing and Strategy states “Brand is very important when blending two organizations. Will members be buying the Plan for its reputation and benefits or will the Hospital System attract a member base the Plan is currently not attracting and why?”
When plans and providers consider entering into a co-branding PSP (aka Narrow Network) options, a few key considerations are:
- The majority of Narrow Network PSPs are Health Maintenance Organization (HMO) products and have risk-sharing contracts.
- Increase in volume – Can the health system handle the influx of new patients? If the primary care system is at capacity, what is the strategy to ensure new Medicare members are seen timely?
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CMS Audit Annual Report Highlights Importance of Mock Audits
Imagine you are the Compliance Officer of your health plan, and you see the email from the Centers for Medicare & Medicaid Services (CMS) announcing you have been selected for a program audit. Did you take the opportunity in the months leading up to this day to confirm your organization can pull compliant universes? Did you take the time to perform some mock reviews with your Organization Determinations, Appeals, and Grievances (ODAG), Coverage Determinations, Appeals, and Grievances (CDAG), Formulary Administration (FA), Special Needs Plan Model of Care (SNP-MOC), if applicable, and Compliance Program Effectiveness (CPE) staff to ensure they are comfortable and skilled presenters? What about your first-tier, downstream, and related entities (FDRs)? Or did you wait, thinking you had plenty of time to get this done?
In the May 8, 2018, release of the Part C and D Program Audit Annual Report (found here), CMS stated, “Mock audits will not only help you prepare for an actual CMS audit, but may help you improve your operations by identifying areas that are problematic or otherwise non-compliant with CMS regulations.”
Our clients find the Gorman Health Group mock audit services provide value by:
- Identifying findings not known at the time of the mock audit
- Providing recommendations on the selection of the best speakers and presenters
- Uncovering gaps in processes, including one plan under the impression the delegate was performing a function that the delegate thought the plan was performing
- Identifying additional FDRs
- Determining a plan was not sending the Explanation of Benefits on a monthly basis
At Gorman Health Group, we can provide your organization with a structured mock program audit experience utilizing our industry veterans and the latest CMS audit protocols, offering a clear picture of how you might perform in a CMS program audit. The mock audit approach also allows you to begin correcting any deficiencies noted before CMS arrives. Are you ready?
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2018 Audit & Enforcement Conference: Program Audit Changes on the Horizon
On Monday, I provided some highlights of last week’s conferences during our weekly Insider call. The Centers for Medicare & Medicaid Services (CMS) hosted the Spring Conference on May 9 and the Audit & Enforcement Conference on May 10. The Program Audit tools and methodology continue to evolve. The agency gave the industry a heads up about the changes when the data collection tools were posted for public comment. Today I focus on one session, New Approach to 2019 Audits and Universes.
Before the 2019 proposed changes, protocols were made up of audit process and data request documents and questionnaires. CMS also maintained internal information such as how samples are targeted and how Compliance Program elements are assessed. I have outlined some highlighted points from the session:
- CMS refers to the data collection tools as the “what” and refers to the audit process documents as the “how.” Going forward, the industry should see the data request documents released for public comment and the reformatted audit process documents posted on CMS’ Compliance and Audits
- Gone are the Excel impact analysis documents. Instead, CMS will follow the universe record layout for requesting impact data in an effort to make audits more efficient.
- Root cause analysis is still of paramount importance to the agency. Often we see why a specific case fails during a webinar, but determining the overall issue beyond the case-level detail of failure will still be requested.
- Timeliness metrics will be broken out; for example, ODAG timeliness will be evaluated, and sub-element results will be provided such as timeliness of notification. This change could help sponsors better identify root cause and correction steps.
- In addition to the arguably broadest change of consolidating certain CDAG and ODAG universes (still separated by Part C and Part D), the agency removed data points that were no longer meaningful and removed questionnaires that were no longer necessary or were not being used as intended.
- Universe integrity will be extended to all program audit areas. In 2018, the agency will pilot this in a few audits. We expect this to add additional webinar time for the agency, plan sponsors, and delegates. For data integrity webinars, the agency will still select five cases of standard and five cases of expedited (for a total of 10), even though the two case types will be in one table.
Normally, the video recordings would have been posted by this point. However, the agency notes it has a new process for releasing and posting the videos. Once management approval is obtained, registered participants will be notified when the videos are available for viewing. If you were not registered for the conference, periodically check the “Event Archive” webpage for updates. Stay tuned to this page for more insight on these conferences and other agency activity.
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President Trump unveils a Blueprint to Lower Drug Prices
On May 11, 2018, President Trump unveiled his Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs entitled “American Patients First”. The President emphasized lowering drug prices as one of his greatest priorities during the campaign and promised to use the federal government’s purchasing power to negotiate lower drug prices to protect consumers, in particular Medicare beneficiaries, from being ripped off by greedy drug companies.
While the administration has continued to discuss the problem of unaffordable drugs since the election, the Blueprint is the first concrete plan to improve affordability of drugs for Medicare beneficiaries. But is it merely a laundry list of ideas on how to reduce the list price of drugs or a concrete, step-by-step process of addressing a complex drug pricing system that has grown out of control for patients and payers? The Blueprint clearly does not call for direct government to drug manufacturer negotiations as a way to lower drug prices as discussed during the campaign, but does it provide a better way of using Medicare’s purchasing power by empowering private plans combined with changes to government-administered drug pricing formulas to accomplish the same goal as claimed by the Department of Health and Human Services (HHS) Secretary Azar after the President’s speech?
An analysis of the Medicare proposals in the Blueprint reveals there are a number of very specific proposals that could strengthen the ability of Medicare to tighten its purchasing power over many prescription drugs Medicare covers, however, there is a lack of a legislative authority to negotiate the costs of many of the more expensive Part B drugs used by a population with high drug chronic care needs and a lack of authority to implement a number of more aggressive purchasing strategies that would lower Part D costs. As background, Medicare covers outpatient prescription drugs under the Part D benefit, which uses private health and drug plans to negotiate discounts on behalf of their respective enrollees. Medicare also covers drugs under Part B that are administered by a physician in an office or outpatient setting and are paid with prices set through an administrative formula based on average sales prices and are not negotiated. Medicare also covers a smaller number of drugs under Part A in an inpatient setting.
There are a number of proposals included in the Blueprint the Administration could implement through its regulatory and administrative authority to lower the costs of the Part D program, although it should be pointed out that even changing regulations often involves a multi-year process of proposing regulatory changes, seeking comments, and finalizing the new policies. Subject to legal review, these could include the following:
- Updating Medicare’s drug pricing dashboard to make price increases and generic competition more transparent. It should be noted CMS has already updated the dashboard since the Blueprint was announced, and further updates would be expected.
- Giving plan sponsors more power when negotiating with manufacturers similar to the provision in the 2019 regulation that would allow mid-year substitution of generic drugs on formularies in response to a price increase. This could include prices for high-cost drugs that lack competition or drugs that do not provide rebates.
- Implement more measures to inform Medicare beneficiaries about lower-cost alternatives, e.g., improving the usefulness of the Part D Explanation of Benefits.
- Prohibiting Part D contracts from pharmacist gag clauses, e.g., preventing pharmacists from telling patients when they can pay less out-of-pocket by not using insurance.
- Permit Part D plans to pay a different price for a high-cost drugs based on the indication.
- Develop demonstrations to test innovative ways of encouraging value-based purchasing that would hold manufacturers responsible for outcomes and offer value over volume.
Additional proposals were included in the Blueprint to improve Part D that are more controversial and will most likely need Congressional action include the following:
- Reducing the minimum number of drugs per class or category in Part D formularies from two to one
- Excluding manufacturer discounts from out-of-pocket costs in the coverage gap and establishing an out-of-pocket maximum in the catastrophic phase of the Part D benefit
- Eliminating or further restricting drugs in the protective classes
- Eliminating cost sharing for generic drugs for low-income beneficiaries
- Requiring Part D plans to apply a substantial portion of rebates at the point of sale
A number of proposals in the Blueprint could improve the purchasing power of Part B. These include the following:
- Leveraging the Competitive Acquisition Program in Part B, e.g., allow physicians to obtain drugs from vendors approved through a competitive bidding process or directly purchasing drugs through the current average sales price method
- Finalizing a policy in which each biosimilar for a given biologic gets its own billing and payment code under Medicare Part B to incentivize development of additional lower-cost biosimilars
- Modifying the Wholesale Acquisition-cost based payment for Part B
More controversial proposals to improve Part B drug pricing that were included in the Blueprint will need new authorities:
- Leveraging Part D plans’ negotiating power for certain drugs covered under Part B by moving them to Part D
- Modifying site-neutral payment policy for physician-administered drugs under Part B or between inpatient and outpatient settings
Other proposals not specific to Medicare included in the Blueprint that could also reduce Medicare drug prices include the following:
- Using specific incentives that are yet to be defined to discourage manufacturer price increases
- Including list prices in advertising
- Speeding up Food and Drug Administration (FDA) approval of generic drugs
- Reviewing and modifying the role of patent exclusivity
- Considering the role and fiduciary status of Pharmacy Benefit Managers
- Measures to restrict the use of rebates and discounts and create incentives for manufacturers to lower list prices
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