In an effort to support the CMS proposed changes to Medicare Part B drug reimbursement, the Pew Charitable Trust held a forum on April 11, 2016, with various stakeholders to discuss potential effects of the Centers for Medicare & Medicaid Services (CMS) proposed changes to Medicare Part B Drug Payment Model demonstration.
The panel included stakeholders such as: Peter Bach, the director of the Center for Health Policy and Outcomes, Memorial Sloan Kettering Cancer Center; Stephen Grubbs, the vice president of clinical affairs at the American Society of Clinical Oncology; and Patrick Conway, the acting principal deputy administrator, deputy administrator for innovation and quality, and chief medical officer, at the Centers for Medicare and Medicaid Services.
The demonstration is set to have two phases: the first phase will aim to restructure the Part B physician add-on payment to a combination of both a flat fee of $16.80 and a lower percentage rate of 2.5% based on Part B drug average sales price (ASP), while the second phase involves a number of value-based pricing strategies, including discounting or eliminating altogether the patient cost-sharing, feedback on prescribing patterns and online decision support tools, and the often-talked about risk-sharing agreements based on outcomes.
In his opening remarks, the Senior Director of Pew, Allan Coukell, discussed the current focus in Congress on high drug prices. Coukell stated that with Congressional actions in mind, the focus of the panel was to explore whether the Part B demonstration actually “makes sense” and if so, what interventions should be tested to comment on the proposed experimental design.
Patrick Conway, M.D.
Dr. Conway provided an overview of the Medicare Part B payment model and provided three principles that CMS strives to achieve: (1) access to medication for all Medicare/Medicaid beneficiaries; (2) allowing doctors to prescribe the medication they think is the right choice for the patient; and (3) better patient outcomes. Dr. Conway also acknowledged that CMS is open to suggestions about the major elements in the proposed rule, stating, “…many of these tools need further development and patient input” and that CMS “look[s] forward to your comments on this.” Dr. Conway also answered several questions focused on the Part B demonstration model, as outlined below.
Monitoring and Evaluation
Dr. Conway discussed how CMS plans to implement the monitoring and evaluation strategy between the proposed rule and the final rule, stating that CMS typically uses claims data while considering the issue of access. Dr. Conway also recognizes that “quality measures are not always meaningful to patients.”
Physician Revenue
While some panelists, as outlined below, expressed concern that this policy may result in financial losses to physicians, Dr. Conway believes that it is possible that doctors may actually receive a net increase from this proposal. Dr. Conway explained his reasoning, that during the sequester, CMS actually found that physicians use lower-cost drugs, and payments therefore may “slightly shift to the physician space.”
Timeline
Dr. Conway did not give a concrete timeline at all, instead stating that since CMS went through the rulemaking process, the ability is limited. However, he did allude to the idea that the model could incorporate a plan for multi-year input for intense engagement.
Panel Discussion
Many panelists were divided on their feelings on phase one of the proposal. For example, Stephen Grubbs expressed concern that not only is this a bad time for phase one of the demo, but also that the policy might wind up lowering the added payment to a premium of 0.86 percent of the reported ASP. Such a result could lead to doctors losing money on Part B medicines provided for patients. Dr. Grubbs also expressed concern that there is nothing in the current design that protects individual patients from risk if something goes wrong.
Stacy Sanders, the federal policy director of the Medicare Rights Center, on the other hand, endorsed the proposal, provided that it does not increase cost-sharing for beneficiaries. Ms. Sanders believes that the model may wind up helping older and disabled patients who are struggling with current drug prices. Ms. Sanders also believes that phase two is important as value-based tools prioritize value-based insurance design and reduce beneficiary coinsurance.
Peter Bach, the director for health policy and outcomes at the Memorial Sloan Kettering Cancer Center, voiced the idea that if the margins of the Medicare Part B system become tighter, manufacturers will distribute drugs at tighter pricing margins, and that CMS should not be taking drug prices as a constant or a given, but as a product of the market. Dr. Bach does not at all favor the second phase, stating that CMS has not been effective in implementing reference-based pricing in the past and that perhaps they should use a competitive acquisition model instead.
Conclusion
Dr. Conway mentioned that CMS is actively monitoring the situation and creating a plan for the demonstration, and believes that success will involve improved quality and neutral costs, or even improved quality and reduced costs, and that either result would be considered a success.