Health Policy Report – July 11, 2023

Reps. Arrington, Lesko, Burgess Reintroduce the Medicare Patient Access to Cancer Treatment Act

On July 6, Representatives Jodey Arrington (TX-19), Debbie Lesko (AZ-8), and Michael Burgess (TX-26) introduced legislation to ensure to create payment parity for outpatient cancer care services in Medicare. This is a critical step toward reducing consolidation and maintaining access to high-quality, cost-effective care in community cancer clinics.

Congress previously attempted to address site of service payment differentials in the Balanced Budget Act (BBA) of 2015 by requiring site neutral payments for new HOPDs. However, this provision has been largely ineffective because the majority of existing HOPDs continue to receive higher payment rates under the BBA’s grandfathering clause. 

In recent months, Congress has shown increased interest in expanding site neutral policies to reduce spending in the Medicare program, with the House Energy and Commerce Committee passing legislation to expand site neutral payments. 

To view a press release from Congressman Arrington, CLICK HERE.

To ask your Member of Congress to cosponsor H.R. 4473, CLICK HERE.

CMS Issues Proposed Rule on 340B Repayment
On Friday, July 7, the Centers for Medicare and Medicaid Services (CMS) announced a proposed rule relating to 340B repayments. The proposed rule was issued in an attempt to remedy 340B underpayments to hospitals during the years 2018 to 2022.

CMS proposes to require a one-time lump sum payment to the affected hospitals, calculated as the difference between what they were paid for 340B drugs (ASP minus 22.5 percent or an adjusted WAC or AWP amount) during the relevant time period from CY2018 through September 27 of CY2022 and what they would have been paid had the 340B payment policy not applied. CMS estimates a total of $9 billion is owed to affected 340B providers.

Because the original reductions to 340B payments were offset under budget neutrality rules by increased payments to non-drug items and services, CMS is proposing to reduce future non-drug item and service payments by adjusting the OPPS conversion factor by minus 0.5% starting in CY 2025. CMS proposes to continue making this adjustment until the full $7.8 billion is offset, which CMS estimates to be 16 years.

In 2018, CMS began cutting payments to 340B providers by nearly 30% after research suggested that some hospitals were profiting excessively from the 340B drug pricing program. After the American Hospital Association (AHA) and other hospitals sued, a unanimous Supreme Court decided last June in American Hospital Association v. Becerra that the differential payment rates for 340B-acquired drugs were unlawful because HHS failed to conduct a survey of hospitals’ acquisition costs under the relevant statute prior to implementing the rates.

Since the Supreme Court Ruling, AHA has been pushing for HHS to expedite repayments to hospitals, sending a letter to HHS earlier this year requesting a meeting to “accelerate the regulatory process.”

To read the Fact Sheet, CLICK HERE.

To read the proposed rule, CLICK HERE.

ASTRO Proposes Legislative Initiative on Radiation Oncology Case Rates
The American Society for Radiation Oncology (ASTRO) recently released a proposed Radiation Oncology Case Rate payment program that aims to change industry payments from per-treatment to per-patient, align financial incentives with clinical guidance, and provide inflation-adjusted payment updates.

According to ASTRO, the proposed model would provide a site-neutral, episode-based, radiation oncology case rate payment for 15 disease sites. The proposal would also help cover transportation costs and incentivize practice accreditation. ASTRO estimates the ROCR program will save more than $200 million over the next five years.

In a blog post, ASTRO wrote that the proposal “represents a bold initiative to reverse disastrous Medicare payment trends. ASTRO believes ROCR is our best chance to secure long-term rate stability and continue to deliver cutting-edge care to patients close to home,”

ASTRO is seeking feedback on the program so it can gather support from the radiation oncology community before bringing the legislative proposal to Congress.

To read ASTRO’s blog on the proposal, CLICK HERE.

For more details on the model, CLICK HERE and HERE.

CMS Issues Revised Guidance for Medicare Drug Negotiation Program

On June 30, the Centers for Medicare & Medicaid Services (CMS) released revised guidance for the Medicare drug price negotiation program established within the Inflation Reduction Act (IRA).

Negotiations under the Medicare drug price negotiation program are set to take place throughout 2023 and 2024. In recent weeks, CMS has faced an onslaught of lawsuits from groups including Merck, Bristol Myers Squibb, the Chamber of Commerce, and PhRMA challenging the program’s constitutionality.

The guidance removed a confidentiality requirement so Medicare now plans to release certain information after a maximum fair price is decided and companies can share details if they wish. However, the revised guidance did not make major changes likely to convince drugmakers to halt their lawsuits.  

To read the revised guidance, CLICK HERE.

To view a press release from CMS, CLICK HERE.