Health Policy Report – November 9, 2023

The Network Hosts Senator Bill Cassidy for Breakfast Discussion 

The US Oncology Network recently hosted a breakfast discussion with Senator Bill Cassidy, MD (R-LA) in The Woodlands, TX. Senator Cassidy is a gastroenterologist who has served in the Senate since 2014 and sits on the Finance, Health, Education, Labor and Pensions (HELP), and Veterans’ Affairs Committees. The discussion focused on The Network’s experience in the Oncology Care Model and policies that are driving consolidation in community oncology. Thank you to those who attended this event and helped make it a success! 

Midterm Election Recap  

With control of the House and Senate at stake, a near-record number of Americans voted in the midterm elections on November 8. Since the results of several key races remain up-in-the-air, the Senate is still up for grabs while Republicans seem to have the inside track on a slim majority in the House. 

Analysts widely expected a “red-wave” of Republican wins. Historically, the president’s party tends to lose seats—and often control of Congress—in the midterm elections. With widespread anxiety about the country’s economic situation, many expected the Republicans to pick up enough seats to wield a commanding majority in the House and a slight majority in the Senate. Republicans only needed to flip one seat to gain control of the Senate and five seats to gain control of the House.  

However, the results announced so far make clear that the red wave was far more modest than originally thought. Republicans have gained two seats in the House so far—including the notable defeat of Democratic Congressional Campaign Committee Chair Rep. Sean Patrick Maloney (D-NY). Senate GOP candidates in Ohio and Wisconsin won their elections, while the GOP candidate in Nevada maintains a slight lead as ballots are still being counted.  

In the Senate, Republicans have lost one seat as Democrat John Fetterman defeated Republican Mehmet Oz in Pennsylvania to win a seat currently filled by outgoing Republican Senator Pat Toomey. Meanwhile, Democratic nominees in two other key states, Arizona and Georgia, currently maintain slight leads over their opponents with ballots still being counted. In Georgia, if no candidate secures over 50% of the vote, a run-off election will be held in December to determine the winner.  

The Network Submits Comments to Congress on MACRA Payment Mechanisms 

On October 31, The Network submitted comments to lawmakers in Congress in response to the Request for Information (RFI) on the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) with a focus on ways to improve Medicare payments, and how to further advance value-based care. Led by Representatives Ami Bera, MD (D-CA) and Larry Bucshon, MD (R-IN), the bipartisan group of House lawmakers sought feedback for comprehensive solutions that can bring America’s health care system into the 21st century. 

The Network’s letter focuses on the following areas: 

• Regulatory, Statutory, and Implementation Barriers: Due to factors impacting the original timeline envisioned by MACRA, including a lack of available models and the COVID-19 pandemic, The Network urges Congress to reconsider the timeline and extend existing incentives to continue encouraging provider participation in Advanced Alternative Payment Models (APMs). Further, since providers continue to face challenges meeting the criteria to achieve Qualifying Participant (QP) certification, and since thresholds are set to increase in 2023, The Network urges Congress to extend the existing QP threshold scores and the current 5% Advanced APM bonus to continue rewarding participation. 
• Increasing Provider Participation in Value-Based Payment Models: The Network stresses the importance of designing APMs with enough flexibility to allow participation from providers across the delivery system by ensuring 1) voluntary introduction and testing of new APMs, 2) stakeholder and physician buy-in, and 3) adequate time and resources for practice transformation. 
• Recommendations to Improve MIPS and APM Programs: The Network urges the Centers for Medicare & Medicaid Services (CMS) to offer timelier access to comprehensive claims data for value-based care (VBC) participants to help monitor performance and take corrective action. It also suggests considering administrative and reporting burdens on providers to enable practices to focus on change and patient care. Further, The Network points out that there is a need for a process to better measure costs in MIPS to account for specialties, like oncology, that treat patients with higher complexity and costs. Last, The Network stresses that APMs present an opportunity for CMS to test site-neutral payment policies across sites of care. 

In addition to the recommendations outlined above, The Network stresses the importance of payment predictability. “Without payment certainty and predictability, independent physician practices will be reluctant to take on additional risk. The Network continues to support MACRA’s goal of tying payment to quality and is hopeful this goal can still be sought through more predictable payment updates and improved incentives and updates to the Medicare Quality Payment Program,” the letter states. 

To read the September 8 RFI, CLICK HERE. 

To read The Network’s comment letter, CLICK HERE. 

Final CY 2023 Physician Fee Schedule Rule Released 

On November 1, the Centers for Medicare & Medicaid Services (CMS) released its final Physician Fee Schedule (PFS) rule for calendar year 2023, which includes a 4.5% decrease in the conversion factor. As a result, the final rule will lead to payment cuts for physician services. 

These cuts will go into effect beginning on January 1, 2023, unless Congress acts before the end of the year. Already lawmakers in the House and Senate—both Democrats and Republicans—are calling for a delay and reform to the policy. 

The Supporting Medicare Providers Act of 2022 (H.R. 8800) has been introduced in the House of Representatives by Congressmen Ami Bera, MD (D-CA) and Larry Bucshon, MD (R-IN). The bill has garnered broad support in the House, while Senators Debbie Stabenow (D-MI) and John Barrasso (R-WY) circulated a dear colleague letter expressing concern about the stability of Medicare payments to health care providers. 

To view the Senate letter to leadership supporting reform, CLICK HERE. 

To view a coalition letter in support of H.R. 8800, Supporting Medicare Providers Act of 2022, which was signed by The US Oncology Network, CLICK HERE. 

To view CMS’ fact sheet on the final rule, CLICK HERE. 

New CMS Final Rule and Legal Battles Subject 340B Program to Changes 

The Centers for Medicare & Medicaid Services (CMS) recently finalized payment rates for hospital outpatient departments and ambulatory surgery center services for 2023, which included updates to the 340B drug discount program. Following the Supreme Court’s ruling in American Hospital Association v. Becerra, CMS finalized a general payment rate of the average sales price (ASP) plus 6% for drugs and biologics acquired through the 340B program for CY 2023. CMS is also implementing a -3.09% reduction to the payment rates for non-drug services to achieve budget neutrality for the 340B drug payment rate change for CY 2023.  

The 340B program has been at the center of multiple ongoing legal battles. In a federal courtroom in Washington, DC, judges recently questioned whether manufacturer-imposed limits on pharmacies that certain health care providers have designated to distribute medications would work against the law’s primary objective of drugmakers selling their products at discounted prices. The government’s attorneys argued that no limits or conditions are allowed in the statute, but drugmakers maintained that reasonable limits should be allowed to prevent abuses and fraud.  

The Department of Health and Human Services (HHS) also fined drugmaker Merck for cutting off 340B sales to hospitals’ contract pharmacies, potentially opening the way to another lawsuit. This comes shortly after the Health Resources and Services Administration (HRSA) sent letters to both AbbVie and Amgen over contract pharmacy restrictions—the tenth and eleventh companies to get warnings.  

To read the administration’s fact sheet, CLICK HERE.  

To learn more about the legal battles, CLICK HERE.  

CMS Innovation Center Releases One-Year Report 

On November 7, the Center for Medicare & Medicaid Innovation (CMMI) released a one-year report on the implementation of its refreshed strategic vision and objectives, originally announced in September 2021.  

The report shares CMS’ new vision of “A health care system that achieves equitable outcomes through high quality affordable, person-centered care.” With CMS having taken stock of lessons learned, they are charting a path for the next ten years of value-based care with the focus on improving the health system for all patients.  

This foundation positions CMMI to launch models, supports, and tools in the coming years that advance each of the five strategic objections: 

1. Drive Accountable Care 

2. Advance Health Equity 

3. Support Innovation 

4. Address Affordability 

5. Partner to Achieve System Transformation 

The report also provides a roadmap for how the Innovation Center will continue execution of its strategy by announcing and launching new accountable care models that increase access to advanced, high-quality, primary care, with more focus on underserved population; developing strategies to drive better integration of primary and specialty care to serve those with chronic or serious conditions through our models; and improving the way providers are incentive, the way care is delivered, and the way information is distributed with individuals and across care settings. 

To read the report, CLICK HERE. 

To read the strategy blog, CLICK HERE. 

To visit the strategic direction webpage, CLICK HERE. 

Pharmaceutical Companies Put Certain Drugs on Hold in Response to Inflation Reduction Act 

The first pharmaceutical company earnings calls since the Inflation Reduction Act (IRA) was enacted gave a glimpse into how the industry is reacting to the new law. On October 27, Alnylam Pharmaceuticals announced that it would not carry out a phase III trial of a drug intended to treat a rare eye disease because doing so may subject it to Medicare’s drug pricing negotiation mechanism. Though orphan drugs are exempt from negotiation, the drug called “vutrisiran has already been designated an orphan drug for one indication; if approved for another indication, it would no longer be exempt from negotiation.”  

Meanwhile, Eli Lilly told investors on November 1 that it would not move forward with a $40 million cancer drug it had licensed from Fosun Pharma in October 2020. In an explanation to reporters, an Eli Lilly spokesperson explained that the Inflation Reduction Act has forced the company to discontinue investing in the drug LOXO-338. “The IRA changes many dynamics for small molecules in oncology, and when we integrated those changes with this program and its competitive landscape, the program’s future investment no longer met our threshold,” according to the spokesperson. 

To read Alnylam’s earnings call transcript, CLICK HERE. 

To read Eli Lilly’s earnings call transcript, CLICK HERE. 

To read more about the Eli Lilly decision, CLICK HERE.