Health Policy Report – October 11, 2022

The Network Joins Over 100 Stakeholders in Support of Legislation to Address Physician Payment Cuts

On September 30, over 100 healthcare stakeholder groups including The US Oncology Network, submitted a joint letter to Representatives Ami Bera, M.D. (D-CA) and Larry Bucshon, M.D. (R-IN) applauding the introduction of H.R. 8800, The Supporting Medicare Providers Act of 2022. If enacted, the bipartisan legislation would help mitigate the financial impacts of scheduled payment cuts in the Center for Medicare & Medicaid Services’ (CMS) Medicare Physician Fee Schedule’s (MPFS) Proposed Rule for 2023.

Specifically, H.R. 8800 would provide a 4.42% positive adjustment to the proposed MPFS conversion factor cut. Modeled on previous legislation that Representatives Bera and Bucshon successfully spearheaded, the bill would significantly alleviate the financial strain placed on clinicians by the MPFS cuts, which are currently scheduled to go into effect on January 1, 2023 unless Congress acts before the end of the year.  

The organizations note that the MPFS is the only payment system within Medicare that does not maintain an annual inflationary update. With inflation at decades-long highs, the groups argue that the MPFS cuts are destabilizing and could negatively impact practices and, ultimately, patients’ access to care. 

“Our organizations strongly support H.R. 8800 as an essential step toward providing clinicians with financial stability and ensuring patients have access to critical services our members provide. Moving forward, we reiterate our commitment to working with you and your Congressional colleagues to identify and advance systemic Medicare payment reforms designed to ensure longer‐term stability for clinicians, promote and reward value‐based care, advance health equity and reduce disparities within the Medicare system,” the letter said.

To read the letter, CLICK HERE.

To read the text of the Supporting Medicare Providers Act of 2022, CLICK HERE.

CMS Announces Lower Part B Premiums for Calendar Year 2023

In a speech at the White House on September 27, President Biden announced that the Centers for Medicare & Medicaid Services (CMS) would lower Medicare Part B premiums. Monthly premiums will be $164.90 in 2023, a drop of $5.20 from this year’s $170.10 per month cost. Annual deductibles will be $226 next year, a decrease of $7 from the annual deductible of $233 in 2022. 

CMS credits the decrease in part to lower-than-projected spending on the controversial and costly Alzheimer’s medication, Aduhelm. When it was initially approved, the drug was priced at $56,000 annually per patient. Consequently, CMS raised monthly Part B premiums last year by 14.5% or $21.60 to help offset the costs of the drug. Following public concern for the cost, Biogen subsequently halved its price for Aduhelm’s price and Medicare also announced last April that it would only cover the drug for post-market clinical trials. Since the number of people who would qualify to be covered for Aduhelm under Medicare would be much lower than expected, Medicare found it feasible to lower premiums for next year. 

To view the CMS fact sheet, CLICK HERE.

To read President Biden’s speech announcing the lower premiums, CLICK HERE. 

Latest Updates on the Implementation of the Inflation Reduction Act

As parts of the Inflation Reduction Act (IRA) begin to go into effect, the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services (HHS) have begun initiating key elements of the legislation related to drug pricing. 

Effective October 1, Medicare reimbursement for qualifying biosimilars will be at the biosimilar’s ASP + 8% of the reference product’s ASP. If the biosimilar’s ASP is higher than the reference product’s ASP, then the ASP+8% rule does not apply and the biosimilar will be reimbursed at ASP+6% of the reference product’s ASP. Medicare claims will continue to be subject to sequestration. 

Medicare Part D inflation rebates also went into effect on October 1 and are expected to bring billions of dollars in savings to government spending. Drug companies can no longer raise prices for drugs covered by Medicare Part D faster than inflation without being penalized and will have to pay rebates next year. The Part B inflation rebate measurement period begins in 2023. These drug cost savings initiatives come following a new report from HHS, which found that over 1,200 pharmaceuticals increased their prices past the inflation rate of 8.5% from July 2021 to July 2022, with an average jump of 31.6%. 

CMS also started to outline the staff needed to negotiate drug prices. In documents recently sent to lawmakers, CMS proposed establishing a Medicare Drug Rebate and Negotiations Group with six divisions, including Divisions of Rebate Agreements & Drug Price Negotiations, Policy, Data Assessment and Analytics, Manufacturer Data and Inflation Rebate Operations, Manufacturer Compliance and Oversight, and Contract Support, and 95 full-time employees. The IRA provides $3 billion in funds to start and gives Medicare new authorities to implement the law through regulatory guidance. 

To read a CMS press release about these provisions, CLICK HERE.

To learn more about the change to biosimilar payment, CLICK HERE.

To view CMS’ timeline of IRA implementation, CLICK HERE.

Over 800 Stakeholders Ask Congress to Extend Advanced APM Incentives

On September 28, more than 800 physician and health care associations, health systems, provider practices, and accountable care organizations (ACOs), led by the National Association of ACOs (NAACOS), sent a letter to House and Senate leaders asking Congress to extend Medicare’s 5% Advanced Alternative Payment Model (APM) incentive payments.

Specifically, the groups ask the Congressional leaders to include Section 4 of the Value in Health Care Act (H.R. 4587) in any end-of-year legislative package. If enacted, H.R. 4587 would extend the current 5% Advanced APM incentive payments and permit the Centers for Medicare & Medicaid Services (CMS) to adjust the thresholds to qualify for future incentive payments, which the letter warns will experience significant increases under current law.

The letter further warns that without Congressional action, the ability for clinicians to qualify for the incentive payments will expire at the end of 2022, which would reduce reimbursements and disincentivize clinicians from participating in Advanced APMs. The groups stress that without these payment incentives, fewer physicians and other providers will take part in these important models that generate Medicare savings and help participating practices provide additional resources for expanded beneficiary services.

To view the letter, CLICK HERE.

Federal Judge Rules Department of Health and Human Services Must Stop 340B Cuts for Remainder of 2022

On September 28, a federal judge ruled that the Department of Health and Human Services (HHS) must end the nearly 30% cut to 340B payments for the remainder of 2022. Beginning in 2018, HHS reduced payments for drugs purchased through the 340B drug discount program from ASP+6% to ASP-22.5%. Hospitals participating in the program sued HHS over the payment reduction and, in June 2022, the Supreme Court ruled that HHS should not have reduced payments to hospitals participating in the 340B drug discount program in 2018 and 2019 without first conducting a statutorily-mandated survey of hospital drug acquisition costs. Despite this ruling, HHS had continued to reimburse hospitals at the lower rate, although CMS had noted in the CY2023 Outpatient Prospective Payment System proposed rule that it expected to revert back to ASP+6% reimbursement rate for 340B drugs in 2023.

Plaintiffs in the case—The American Hospital Association, America’s Essential Hospitals, the Association of American Medical Colleges, and 340B Health—applauded the court’s decision.

“We continue to urge the administration to promptly reimburse all the hospitals that were affected by these unlawful cuts in previous years and to ensure the remainder of the hospital field is not penalized for [the] prior unlawful policy,” said Melinda Hatton, general counsel, and secretary for the American Hospital Association. 

The Court is still considering potential remedies to make participating hospitals whole for the historical payment cuts. 

To read the court’s decision, CLICK HERE.
To read the American Hospital Association’s press release about the court decision, CLICK HERE.