Health Policy Reports

Biweekly newsletter of stories impacting community cancer care.
August 22, 2023

Health Policy Report – August 22, 2023

In New Op-Ed, Dr. Debra Patt Calls on Lawmakers to Enact PBM Reform 

Debra Patt, MD, PhD, MBA, of Texas Oncology, recently penned an op-ed in MedPage Today urging federal policymakers to rein in Pharmacy Benefit Managers (PBMs). Dr. Patt, who also serves as Chair of The Network’s Public Policy and Reimbursement Committee, noted that modern cancer therapies have enabled patients to enjoy their life with their cancer and control it as a chronic disease. However, PBMs are restricting the potential of these medications through authorization requirements, barriers, and fees that drive up costs and delay patients’ access to life-saving treatment.  

Dr. Patt describes how PBM authorizations delayed her patients’ oral treatment for metastatic breast cancer by 6 weeks. “I watched as Tania’s cancer continued to metastasize, and she was soon forced to resort to traditional chemotherapy — a less effective, higher-toxicity treatment plan,” Dr. Patt wrote.  

To ensure that patients can access affordable, timely care, Dr. Patt called on federal lawmakers to pass PBM transparency measures, such as the Pharmacy Benefit Manager Reform Act (S. 1339), which would ban PBMs’ use of certain predatory tactics, including spread pricing and claw back fees.  

The op-ed comes after Dr. Debra Patt testified at a Senate Commerce Committee hearing, entitled “Bringing Transparency and Accountability to Pharmacy Benefit Managers,” earlier this year.  

To read Dr. Debra Patt’s op-ed in MedPage Today, CLICK HERE. 

To read the full text of the Pharmacy Benefit Manager Reform Act, CLICK HERE. 

To watch Dr. Debra Patt’s Senate testimony, CLICK HERE. 

Dr. Ralph Heaven Pens Op-Ed on Need for Site Neutral Payments in Cancer Care 

In a recent op-ed in the Dallas Morning News, Ralph Heaven, MD, a hematologist-oncologist at Texas Oncology – Abilene, shared his insight on how site neutral payments are contributing to health care consolidation, driving up costs, and restricting patient access to community cancer care.  

In the article, Dr. Heaven illustrated the growing payment disparity between independent practices and hospital outpatient departments (HOPDs). “In 2016, the first hour of chemotherapy infusion – one of the most common services billed by oncology practices – was reimbursed at $136 for physician’s offices, while payment for HOPDs was 106% higher, at $280. This year, this payment disparity has jumped to 158%, with physician reimbursement declining to $129 and the HOPD rate increasing to $333. This means that today, chemotherapy is nearly three times more expensive when provided in the HOPD setting,” Dr. Heaven wrote.  

Dr. Heaven emphasized that this payment disparity incentivizes hospitals to acquire community-based providers and charge higher prices. This has resulted in a hefty price tag for patients, whose out-of-pocket costs increase dramatically when care is provided in the more expensive hospital setting. 

Additionally, Dr. Heaven emphasized that hospital acquisition of independent cancer centers is restricting access to care for rural patients, particularly in Texas. Community cancer practices often operate satellite sites that bring oncology services directly to rural areas. However, these are often the first to close when community oncology practices are bought by hospitals as they are seen as unprofitable. This results in rural patients being left without access to their trusted oncology providers.  

To level the playing field for cancer care, Dr. Heaven urged federal lawmakers to support the Medicare Patient Access to Cancer Treatment Act (H.R. 4473), which would require Medicare to pay the same amount for the same cancer services, regardless of where they are provided.  

To read the op-ed, CLICK HERE.  

To read the full text of the Medicare Patient Access to Cancer Treatment Act, CLICK HERE. 

The Network’s State Government Relations Team Attends NCSL Annual Summit 

Last week, The US Oncology Network’s state government relations team participated at the National Conference of State Legislatures (NCSL) Annual Summit in Indianapolis. The Network’s longstanding commitment to the NCSL Foundation, spanning over 15 years, reflects our unwavering dedication to championing policies that promote accessible, affordable, and high-quality community cancer care. 

This annual gathering brought together more than 2,000 legislators from all corners of the country to engage in discussions about policies that profoundly impact community cancer care. The Network specifically advocated for state policies that provide transparency and oversight of Pharmacy Benefit Managers, reform step therapy and prior authorization practices, incentivize physicians to provide high-quality, evidence-based care, and encourage payers to incentivize the use of healthcare information technology.  

In addition, The Network is thrilled to announce that Angela Storseth-Cooper, Director of Government Relations & Public Policy, received a prestigious nomination to serve on the NCSL Foundation Board of Directors. Angela’s nomination underscores her commitment to advancing the effectiveness of state legislatures and her dedication to fostering a positive impact on the legislative process. 

The Network’s commitment to advocating for access to high quality, affordable, evidence based, and comprehensive care close to home remains unwavering. The NCSL Annual Summit serves as an invaluable platform for these efforts and The Network is deeply honored to be part of these important conversations.  

Lawmakers Scrutinize Nonprofit Hospitals’ Compliance with Community Benefit Requirements 

Following recent reports that nonprofit hospitals have failed to comply with community benefit requirements, a group of bipartisan senators is calling for a revision of federal auditing standards. In a letter sent to the Internal Revenue Service (IRS) commissioner and the Treasury Inspector General, Senators Elizabeth Warren (D-MA), Raphael Warnock (D-GA), Bill Cassidy (R-LA) and Chuck Grassley (R-IA) urged a review of charity care tax regulations – which the senators claim are currently insufficient.  

“We are alarmed by reports that despite their tax-exempt status, certain nonprofit hospitals may be taking advantage of this overly broad definition of ‘community benefit’ and engaging in practices that are not in the best interest of the patient,” the senators wrote. “These practices — along with lax federal oversight — have allowed some nonprofit hospitals to avoid providing essential care in the community for those who need it most.”  

While Republicans have long been concerned with this issue, momentum has been building amongst Democratic lawmakers as recent reports have shown that many nonprofit hospital systems spend less on community programs than the value of their tax exemptions.  

The current auditing standards allow nonprofit hospitals to report the scope of their charity care in an open-ended structure, which has prevented transparency into nonprofits’ charity care for tax exemptions. 

The senators are asking the IRS to provide a list of the community benefits provided by hospitals in 2021 and 2022, and how many hospitals have been identified as “at risk” for noncompliance with federal regulations. The lawmakers have asked for answers within 60 days.  

To read the lawmakers’ letters, CLICK HERE. 

Department of Justice Responds to IRA Lawsuit 

The Department of Justice (DOJ) has spoken out against the Chamber of Commerce’s injunction to block the Medicare drug price negotiation program under the Inflation Reduction Act (IRA). In its court filing, the Department of Justice argues the organization had no standing to file the lawsuit and that any stop to the program would harm the public.  

The Chamber of Commerce’s lawsuit, filed in July, claimed the drug pricing negotiation program violates the U.S. Constitution by giving the executive branch excessive control over drug pricing. Drugmakers Merck, Bristol Meyers Squibb, Johnson & Johnson, and the industry group PhRMA filed similar lawsuits this summer. The Chamber argues that provisions violate fundamental protections for free enterprise under the Constitution.  

In its rebuttal, the DOJ argued that the drug companies are provided “plenty of flexibility” within the timelines for negotiation and that any pause to the program will harm patients and payers. Throughout the court filing, the DOJ highlighted that the program is voluntary, though companies who do not participate will lose out on income brought in through Medicare.  

The pushback from the DOJ comes just weeks before the first 10 drugs for the negotiation program are set to be announced on September 1.  

To read more about the DOJ’s response, CLICK HERE. 

To read about the Chamber of Commerce’s lawsuit, CLICK HERE. 

Bipartisan Interest Builds to Address PBM Business Practices Before End of Year 

Multiple bills aimed at increasing transparency and oversight of pharmacy benefit managers (PBMs) have advanced through the House and Senate, but advocacy groups are pushing lawmakers to do more.  

The multiple measures being considered by the House and Senate are largely focused on implementing various PBM transparency and reporting requirements. While some groups claim these reforms will go a long way in benefitting patients, others are expressing concern that transparency alone won’t address PBMs’ role in driving high drug costs.  

Specifically, employer groups argue that legislation must include fiduciary responsibility to hold PBMs accountable toward plans and their enrollees. Meanwhile, other health care stakeholders say that lawmakers must consider legislation that directly addresses issues that arise when vertically integrated PBMs and their health plans bundle their services.   

PBMs, however, assert that lawmakers should investigate the role of drugmakers, who are setting drug prices.  

It’s clear that bipartisan interest in this issue continues to build, setting the stage for Congressional action later this year.  

To read more, CLICK HERE.  

New Survey Reveals How High Drug Prices Impact Patient Care 

The American System of Health-System Pharmacists (ASHP) recently released the results of its quarterly survey on the severity and impact of current drug shortages in the United States. Of the more than 1,100 hospital-based pharmacists surveyed in June and July 2023, over 99% reported experiencing a drug shortage. Overall, the survey found an active, ongoing shortage of 309 drugs across the country, close to an all-time high.   

While widespread, drug shortages are impacting cancer care more than other areas of medicine. More than half of respondents (57%) said shortages of chemotherapy drugs were critically impactful, defined as rationing, delaying, or canceling treatments and procedures—a trend that could be devastating to access to oncology services. 

The shortage is also contributing to upward cost pressures. Most respondents to the ASHP survey estimated that their budgets for drugs would rise significantly in the year ahead. The two most common projections for drug budgets were a 6–10% increase (32%) and an 11–15% increase (25%).  

Meanwhile, on August 10, the AARP Public Policy Institute released a new report that details the exponential growth of Medicare Part D drug costs. This AARP Public Policy Institute Spotlight report finds that list prices for the 25 top Part D drugs have increased by an average of 226% since they first entered the market, greatly exceeding the corresponding rate of general inflation. Nearly 60% of the current list price of these 25 drugs can be attributed to price increases in the years since they entered the market.  

According to the researchers, “These findings highlight the importance of the Inflation Reduction Act and its inflation-based rebates that will require drug companies to pay Medicare when they increase their prices faster than inflation. The Congressional Budget Office has estimated that these inflation-based rebates will reduce enrollee and Medicare Part D program spending by billions of dollars, and lead to lower drug prices in the commercial insurance market.” 

To read the ASHP survey, CLICK HERE

To read the AARP report, CLICK HERE