Benefit Design

CMS Rule on Pharma Patient-Assistance Programs Could Cut Back on Aid

CMS’s stance has long been that manufacturer-provided assistance given to patients is excluded from best price and average manufacturer price (AMP) calculation for prescription drugs. However, the rise of copayment accumulators and maximizers — and health insurers’ subsequent taking of this assistance rather than allowing it to count toward patients’ deductibles and out-of-pocket maximums — have caused the agency to rethink its position. A rule slated to take effect at the beginning of 2023 would reverse that longtime approach, potentially resulting in increased patient out-of-pocket costs for drugs and pharma companies being on the hook for ensuring they know exactly where their assistance is going, industry experts tell AIS Health, a division of MMIT.

The Medicaid rebate rule allows state Medicaid programs to get the same discounts on drug prices that manufacturers offer commercial plans purchasing prescription drugs. Manufacturers pay rebates to Medicaid programs that are calculated based on drugmakers’ best price, which is the lowest price the manufacturer gives to most providers of health care services or items, including hospitals, HMOs and MCOs — but not patients. It includes any price adjustments, such as discounts and rebates, but not manufacturer-provided assistance to patients.

Court Will Rule Soon on ACA’s Preventive Coverage Mandate

Although the Affordable Care Act has now survived multiple legal challenges heard by the Supreme Court, the 12-year-old law does not appear to be home free yet. A case currently pending before a Texas district court — which could make it up to the highest court in the land — threatens to dismantle the ACA’s mandate that group and individual health plans must fully cover preventive services such as birth control and vaccines.

If the lawsuit is successful in striking down or weakening one of the ACA’s more popular provisions, it would also raise the question of whether private health plans would stop covering certain preventive services with zero cost sharing. According to industry experts, the answer isn’t so simple.

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Despite Growth, Barriers Remain to Driving MA Benefit Innovation

Innovative, mostly non-medical supplemental benefits have seen tremendous growth in the few years the Medicare Advantage program has allowed them. But that growth is still from a base of zero, and industry experts suggest that numerous barriers are keeping adoption of these new supplemental benefits at a relatively slow pace.

Starting with plan year 2019, MA organizations began offering a wider range of benefits such as Adult Day Care and In-Home Support Services thanks to CMS’s reinterpretation of the definition of “primarily health-related supplemental benefits.” And with the passage of the CHRONIC Care Act of 2018, MA plans in 2020 began offering Special Supplemental Benefits for the Chronically Ill (SSBCI), a category of “non-primarily health related” items and services that can be made available to certain beneficiaries.

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How Do Pharma/PBM Contracts Play Role in Rebate Leakage? Part 2

Pharma manufacturers depend on contracts with PBMs — and, increasingly, their group purchasing organizations (GPOs) — to ensure favorable formulary positioning with PBMs’ health plan and employer clients. But as those contracts have grown more complex and less transparent, drugmakers may be at risk of losing significant amounts of money, according to industry experts. In a two-part series, AIS Health, a division of MMIT, explores the details within the contracts and how those complexities may result in losses of billions of dollars across the pharma industry.

Revenue leakage — unintended revenue loss because of process inefficiencies — can be a huge financial drain on pharma manufacturers. It also may potentially result in compliance risks with the Anti-Kickback Statute and its discount safe harbor protections, “so it always has to be clearly defined as to what the rebate or any monies between pharma and the PBM being exchanged; there has to be a reason,” explains Stephanie Seadler, vice president of Trade Relations at EmsanaRx.

Despite Growth, Barriers Remain to Driving Benefit Innovation

Innovative, mostly non-medical supplemental benefits have seen tremendous growth in the few years the Medicare Advantage program has allowed them. But that growth is still from a base of zero, and industry experts suggest that numerous barriers are keeping adoption of these new supplemental benefits at a relatively slow pace.

Starting with plan year 2019, MA organizations began offering a wider range of benefits such as Adult Day Care and In-Home Support Services thanks to CMS’s reinterpretation of the definition of “primarily health-related supplemental benefits.” And with the passage of the CHRONIC Care Act of 2018, MA plans in 2020 began offering Special Supplemental Benefits for the Chronically Ill (SSBCI), a category of “non-primarily health related” items and services that can be made available to certain beneficiaries.

Nearly One-Third of Medicare Advantage Members Receive Extra Supplemental Benefits as of 2022

More than 30% of Medicare Advantage members are currently enrolled in a plan that offers at least one type of newer supplemental benefit, according to an April report from ATI Advisory and the Long-Term Quality Alliance. Researchers studied the growth of both Special Supplemental Benefits for the Chronically Ill (SSBCI), established by the CHRONIC Care Act of 2018 and first made available to eligible beneficiaries in 2020, and Expanded Primarily Health-Related Benefits (EPHRB), which emerged in 2019 following CMS’s reinterpretation of the definition of “primarily health-related.” Both benefit types have grown significantly over the past two years, with nutritional benefits, transportation and in-home support services among the most popular offerings. Just one benefit type, adult day health services, saw a decline in uptake, which report authors attributed to lack of availability caused by the COVID-19 pandemic. See an overview of the findings in the table below.

News Briefs: Lawmakers Urge CMS to Rethink 8.5% Medicare Advantage Plan Rate Increase

Sen. Elizabeth Warren (D-Mass.) and other progressive lawmakers wrote CMS Administrator Chiquita Brooks-LaSure asking the agency to reconsider recently finalized policies that would lead to an average revenue increase of 8.5% for Medicare Advantage plans next year. Citing the Medicare Payment Advisory Commission’s March 2022 Report to the Congress, lawmakers wrote that MA plans last year were paid 4% more per enrollee than fee-for-service Medicare, even though the program was designed to generate savings by paying insurers rates set at 95% of those used by FFS Medicare. “To preserve Medicare and its Hospital Insurance (HI) Trust Fund, we urge CMS to mitigate the announced payment increases for Medicare Advantage plans so they are on par with payments to fee-for-service Traditional Medicare and take additional steps to address overpayments and increase transparency in the Medicare Advantage program,” they wrote on April 20.

CMS Targets Patient-Assistance Programs; Rule Could Curtail Aid

CMS’s stance has long been that manufacturer-provided assistance given to patients is excluded from Best Price and average manufacturer price (AMP) calculation for prescription drugs. However, the rise of copayment accumulators and maximizers and health insurers’ subsequent taking of this assistance rather than allowing it to count toward patients’ deductibles and out-of-pocket maximums have caused the agency to rethink its position. A rule slated to take effect at the beginning of 2023 would reverse that longtime approach, potentially resulting in increased patient out-of-pocket costs for drugs and pharma companies being on the hook for ensuring they know exactly where their assistance is going, industry experts tell AIS Health, a division of MMIT.

The Medicaid rebate rule allows state Medicaid programs to get the same discounts on drug prices that manufacturers offer commercial plans purchasing prescription drugs. Manufacturers pay rebates to Medicaid programs that are calculated based on drugmakers’ Best Price, which is the lowest price the manufacturer gives to most providers of health care services or items, including hospitals, HMOs and MCOs — but not patients. It includes any price adjustments, such as discounts and rebates, but not manufacturer-provided assistance to patients.

Carvykti Approval Brings Second CAR-T to Multiple Myeloma Treatment

With its Feb. 28 approval, the Janssen Pharmaceutical Companies of Johnson & Johnson and Legend Biotech USA, Inc.’s Carvykti (ciltacabtagene autoleucel; cilta-cel) becomes the second chimeric antigen receptor T-cell (CAR-T) therapy to treat multiple myeloma. Payers report being less likely to prefer it over some or all other multiple myeloma treatments with a similar indication, but oncologists are showing more enthusiasm for prescribing the new agent, according to Zitter Insights.

The FDA approved Carvykti for the treatment of adults with relapsed or refractory multiple myeloma after at least four lines of therapy, including a proteasome inhibitor, an immunomodulatory agent and an anti-CD38 monoclonal antibody. The product is a B-cell maturation antigen (BCMA)-directed CAR-T agent. The one-time treatment will have a phased launch and will be available through a limited network of certified treatment centers. The FDA gave the drug breakthrough therapy and orphan drug designations. The therapy’s wholesale acquisition cost is $465,000.

Pharma/PBM Contracts Are Increasingly Complex, Opaque

Gaining market access for therapies is key to pharma manufacturers’ success. And it’s not merely access but where on a formulary that access occurs — as well as the formulary tier of competitor products — that’s crucial. To help secure placement, drugmakers enter into contracts with PBMs — and, increasingly, their group purchasing organizations (GPOs) — entities that in turn enter into pharma contracts on behalf of their health plan and employer clients. But these contracts have grown increasingly complex and opaque, and companies should ensure they understand exactly what they’re signing, say industry experts.

These contracts are proprietary, almost always have nondisclosure clauses and vary by manufacturer, PBM and GPO, so many details around them remain unknown. However, sources tell AIS Health that certain standard items should be included. Those include “definitions, financial terms, requirements to qualify for payments, payment timelines, data sharing, confidentiality,” among other aspects, says Katie Asch, Pharm.D., senior director and U.S. consulting pharmacy practice lead at Willis Towers Watson. In addition, states Jenisha Malhotra, senior manager in Risk & Financial Advisory at Deloitte Life Sciences & Health Care, other items that may be addressed are details around the effective dates of the contract; pricing or incentives, including rebates or discounts; eligible products; responsibilities of the contract signees; and eligibility requirements, including eligible facilities.