Benefit Management

Do Pharma/PBM Contracts Play Role in Drugmakers’ Revenue Leakage?

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 some industry experts.

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.

Novartis’ Pluvicto Brings New Mechanism of Action to mCRPC Options

A new prostate cancer drug is sparking interest among payers and oncologists alike, according to a survey by Zitter Insights. While the product offers a new mechanism of action for the indication, the manufacturer recently halted production of the therapy temporarily in two of its three global sites “out of an abundance of caution” due to “potential quality issues” that could pose a glitch in initial uptake of the therapy.

On March 23, the FDA approved Novartis Pharmaceuticals Corp.’s Pluvicto (lutetium Lu 177 vipivotide tetraxetan) (formerly referred to as 177Lu-PSMA-617) for the treatment of prostate-specific membrane antigen (PSMA)-positive metastatic castration-resistant prostate cancer (mCRPC) in people who have been treated with androgen receptor pathway inhibition and taxane-based chemotherapy. The product from Novartis unit Advanced Accelerator Applications USA, Inc. is the first FDA-approved targeted radioligand therapy for eligible people with mCRPC that combines a targeting compound with a therapeutic radioisotope.

OIG Report on Prior Authorization Denials Puts Pressure on CMS

As Medicare Advantage insurers face increasing scrutiny from lawmakers over coding practices and a pending pay boost of 8.5% next year, a new HHS Office of Inspector General report on rates of prior authorization and payment denials in MA doesn’t do much to help their case. Although it was based on just a weeklong sample of denial cases, the report adds to a growing body of evidence that the prior authorization process in MA is ripe for improvement and in need of either more guidance from CMS and/or stronger oversight.

Receiving widespread coverage at press time, starting with a New York Times article summarizing it as “saying that insurers deny tens of thousands of authorization requests annually,” OIG on April 28 released a report titled, “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care.” The report immediately drew praise from providers, such as the American Medical Association (AMA), which issued a statement agreeing with federal investigators’ recommendations on reining in inappropriate denials. But AMA argued that more needs to be done, such as passing a bipartisan bill that aims to establish new electronic prior authorization (PA) requirements on MA insurers.

Poor Mental Health Care Access Increases Systemic Costs

Health insurers have long struggled to administer behavioral health benefits, which won’t get easier any time soon: Demand for mental health services is high due to the opioid crisis and the mental health strains of the COVID-19 pandemic. Experts from clinical, financial and policy backgrounds say that coordinating behavioral health care with traditional medical benefits — and bringing behavioral health care providers into insurer networks — are both essential to managing costs and ensuring access to care.

Despite decades of policymaking that has attempted to streamline access to mental health care benefits, most notably through mental health parity, mental health care remains expensive and hard to access. (Several federal laws mandate mental health care parity: Health plans are not allowed to impose benefit limitations on mental health care that are more severe than limits placed on medical and surgical benefits.) What’s more, mental health care providers are usually siloed from other clinicians on a patient’s care team, which tends to exacerbate medical conditions and increase costs.

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Enforcement Actions Show Mounting CMPs from Financial Audits (with table: CMP Amounts Imposed on Medicare Advantage Insurers From February to April 2022)

Between February and April of this year, CMS imposed a total of nearly $1 million in civil monetary penalties (CMPs) on Medicare Advantage and Part D organizations for program violations uncovered during routine audits, including so-called “one-third financial audits.” While CMS has yet to release its annual report that provides a fuller picture of plan noncompliance, the latest round of CMP notices offers some important lessons for sponsors and flags a few potential areas of risk that they should be monitoring in their own operations, according to compliance experts.

Of the 15 CMP notices recently posted to the CMS Part C and Part D Enforcements Actions webpage, six resulted from 2021 program audits and eight were related to 2020 financial audits. Additionally, CMS imposed a fine on Anthem, Inc. for a Part D appeals violation stemming from a previously detected system migration issue that occurred in 2020.

BCBS of Michigan Launches Precision Medicine Pilot Program

Blue Cross Blue Shield of Michigan last month launched a precision medicine pilot program for 500 of its Medicare Advantage HMO members who also have pharmacy benefits. Experts say the move is becoming more common among payers as they look to reduce their medication spending and improve clinical outcomes in high-risk groups.

The program, Blue Cross Personalized Medicine, is using pharmacogenomics (PGx), or genetic testing, to help identify how people respond to certain medications and offer specific treatment recommendations based on their genetic makeup. Its aim is to help BCBS of Michigan manage high drug costs and give its members tailored, cost-effective and clinically relevant care while also decreasing adverse drug reactions.

CalOptima Aims for Real-Time Payments, Prior Auth Approvals

CalOptima, a Medi-Cal plan in Southern California, launched a five-year blueprint to cut through delays in care approvals and payments, as it seeks to deliver near-immediate claims processing and to put an end to prior authorization-related lags.

On March 21, CalOptima announced a $100 million investment in technology upgrades, which the Medicaid plan seeks to use to reduce barriers to care and to bridge divides — primarily centered on data-sharing — between the plan, providers and community partners.

The payer, which serves nearly 900,000 members in Orange County, also wants to get money into the hands of providers faster, with plans for an innovative “real-time claims processing” system.

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Calif. Fines L.A. Care $55 Million for Prior Auth, Appeals Issues

L.A. Care, the Medicaid-focused health plan owned by Los Angeles County, has been fined $55 million by the state of California for allegedly mishandling prior authorizations and coverage appeals. According to state regulators, L.A. Care — the largest nonprofit Medicaid managed care organization (MCO) in the country — mishandled more than 67,000 grievances filed by plan members, which caused sick patients to be denied proper care or wait months for urgent treatment.

Two California agencies, the Dept. of Managed Health Care (DMHC) and Dept. of Health Care Services (DHCS), launched an investigation into L.A. Care’s prior authorization and denial appeals processes after a September 2020 Los Angeles Times article revealed that extremely ill L.A. Care members faced dangerous delays when they tried to see a specialist. The combined $55 million in fines assessed by the agencies far outstrips the previous record fine in California, $10 million, for similar violations, according to the news outlet.

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Payers Can Play a Role in Encouraging Naloxone Coprescribing

To prevent deaths and injuries related to prescription opioid misuse, research has shown that coprescribing the overdose-treatment drug naloxone when patients on chronic pain-management therapy receive high doses of opioids can make a big difference. Yet federal data show that less than 1% of patients who should be prescribed naloxone with their opioid medications obtain a prescription for it — a rate that managed care entities can play a role in changing, according to a new paper from the Academy of Managed Care Pharmacy (AMCP) Addiction Advisory Group.

The AMCP Addiction Advisory Group in 2019 polled AMCP payer members, addiction treatment providers and managed behavioral health organizations, with the goal of understanding and evaluating “trends in treatment, coverage, policies, and needs associated with providing health services to patients with substance use disorders.” One particularly notable finding was that 80% of the managed behavioral health organizations and 47% of AMCP payer members who responded to the survey encouraged naloxone coprescribing in patients at high risk of overdose, but “no organizations required coprescribing.”

Aetna Could Face Class-Action Suit Over Proton Therapy Denials

Due to a Jan. 27 federal court order, CVS Health Corp.’s Aetna health insurance division could be the defendant in a class-action lawsuit regarding Aetna’s restrictive coverage decisions in breast and prostate cancer treatment. In a lawsuit filed in Florida district court, a federal judge found that Aetna improperly denied coverage of proton therapy to cancer patients who ultimately had to pay for the treatment out of pocket.

Proton beam radiation therapy (PBRT) is a type of cancer treatment “that uses high-powered energy to treat cancer and some noncancerous tumors,” according to the Mayo Clinic, which also notes that “studies have compared proton radiation and X-ray radiation, so it’s not clear whether proton therapy is more effective at prolonging lives.” The therapy isn’t widely available, although new proton therapy centers are being built in the U.S. and in other countries.

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