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10 Questions Oncology Manufacturers Should Be Asking About the Stark Law

By Matthew Cunningham

Even though we knew it was coming, the end of the COVID public health emergency (PHE) on May 11, 2023, still took the healthcare industry by surprise. While the end of the PHE resulted in the rollback of many COVID-19 programs, it also changed the ways that Medicare patients can access oral therapies from community oncology clinics.

In September 2021, the Centers for Medicare and Medicaid Services (CMS) released an FAQ shifting the interpretation of the Stark Law. Though community practices had historically been able to mail oral oncolytics directly to patient homes from their internal pharmacy, the new CMS interpretation now classified this as a Stark Law violation.

While advocacy groups and legislators continue to push back on CMS, and practices begin to consider workflow changes, pharmaceutical manufacturers are also seeking answers to understand the impact of these changes in ensuring patients get the medicines they need when they need them.

What is Stark Law and why does IOAS matter?

The physician self-referral law, also known as the Stark Law, was enacted in 1989 to prevent physicians from making self-referrals for specific designated health services where they would have financial gain.

Within the Stark Law, CMS also implemented exceptions for “in-office ancillary services” (IOAS) to facilitate streamlined care for patients. Internal pharmacies have always been classified as IOAS, which is why we see sophisticated pharmacy operations within the community. Up until the 2021 CMS FAQ, mail-order dispenses were also categorized under the IOAS exception.

Why May 11, 2023?

The CMS FAQ was published in September 2021, but the implementation was delayed due to the COVID-19 PHE. When the federal government ended the PHE on May 11, the new Stark Law interpretation went into effect immediately.

How will this impact practices and patients?

While the CMS interpretation is not oncology-specific, the combination of oncology practice-owned pharmacies and the high prevalence of oral therapies has resulted in an outsized effect in this therapeutic area.

Currently, practices have two options to get therapies to patients:

  1. Require patients to pick up medications in person
  2. Utilize a third-party specialty pharmacy to mail the medications directly to the patient’s home

While practices are familiar with navigating third-party specialty pharmacies such as CVS or Accredo, concerns about patient adherence, therapy access delays, and payer denials are top of mind for physicians and pharmacists who are accustomed to being able to mail therapies directly to the patient.

Patients who need to drive hours to the nearest oncology clinic will clearly be the most likely to elect to receive mail-order oncolytics from a third-party specialty pharmacy. The real question will be the impact on patients living 30 or 45 minutes away from their nearest clinic. If a large percentage of cancer patients cannot physically go to clinic locations for regular pickups, there may be significant impact on the ability of community practice pharmacies to maintain dispensing volume and a presence in the prescription fulfilment journey.

What’s next for the Stark Law?

While practices have adjusted workflows, the pushback against CMS continues. The Community Oncology Alliance (COA) has been advocating against the new interpretation. In late April, 54 members of Congress wrote a letter to the secretary of HHS calling for the retraction of the FAQ interpretation.

Another key dynamic that may influence the true impact of Stark is the “value-based enterprise” (VBE) exemption. Within the text of the law exists a carve-out for entities involved in value-based care. While oncology practices are heavily invested in value-based care agreements with both commercial payers and CMS, the complexity of the VBE exemption has led many practices to carefully evaluate their eligibility prior to restarting mail-order dispensing. If, however, practices are able to qualify for a VBE, they will not be impacted by the new CMS interpretation.

10 questions manufacturers should be asking

What does all of this mean for manufacturers? Right now, much is up in the air, but all manufacturers should be asking several questions to not only evaluate the near- and long-term impact of this change, but also to develop strategies in response:

  1. What is the regulatory future of the Stark Law?
  2. How many practices will qualify as “value-based enterprises”?
  3. What types of variability will there be in practice responses, and how have dispensing workflows changed post-May 11th?
  4. Will dispensing channel volume (community vs. third-party specialty pharmacies) shift due to the inability of patients to physically pick up oral oncolytics?
  5. With the potential impact on dispensing channels, do manufacturers need to reevaluate their HUB service offerings, distribution model design, and contracting strategies?
  6. How will various patient populations and regions (e.g., rural vs. urban) be impacted differently?
  7. Are practices capable of differentiating Medicare vs. commercially insured patients and developing separate dispensing/mail-order workflows?
  8. How may the potential shift from internal dispensing to third-party specialty pharmacies influence patient adherence, time-to-fill, and adverse event management?
  9. Will oral vs. IV therapy choice dynamics be impacted in any way given potential concerns regarding patient adherence and patient journey ownership/visibility?
  10. Will the Stark Law interpretation changes influence payer or PBM dispensing network decisions?

With so much in flux, manufacturers of oral oncolytics must keep Stark Law fluency, impact modeling and access strategies top of mind.

For more information on ensuring seamless patient access to your medications, connect with Norstella. This blog post was originally published on June 20, 2023, on the Norstella site.

0 Comments Current Events | Oncology |
© 2024 MMIT
Matthew Cunningham

Matthew Cunningham

Matthew Cunningham is a Partner at The Dedham Group, a Norstella company that provides U.S. market access strategic consulting services for oncology and specialty therapeutics life sciences organizations.

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