Health Policy Report – October 22, 2024

Dr. John Schuler Highlights How Oregon’s Measure 118 Would Harm Independent Medical Practices

In a recent interview with the Portland Business Journal, Dr. John Schuler, Compass Oncology, discussed how Oregon Ballot Measure 118 would uniquely impact independent cancer care. The proposal would improve a 3% gross receipts tax for corporations with Oregon sales of more than $25 million a year. 

“Health care is an essential life-saving service we’re providing, and a gross receipts tax doesn’t make sense in our industry,” Dr. Schuler said in the interview. “While other businesses might be able to raise prices, we can’t do that. It would have a dramatic impact to our bottom line, and our real concern is that it will restrict access to care to patients.”

Like many independent oncology practices, Compass Oncology sees a high amount of patients covered by Medicare & Medicaid, which often pay less than the cost of providing care. Meanwhile, the cost of cancer drugs borne by the clinic continues to accelerate. 

Dr. Schuler expressed his concern that, if the measure passes, Compass Oncology will have to limit the number of government-insured patients it sees. 

“We are the low-cost provider of oncology services in the Portland metro,” Schuler said. “If we go away, patients will have to drive farther and pay more for care and the cost to the system goes up as well.”

To read the article, CLICK HERE.

Rep. Mariannette Miller-Meeks (R-IA) and Rep. Jimmy Panetta (D-CA) Lead Dear Colleague Letter on Physician Fee Schedule Cuts

On October 15, a bipartisan group of 233 Members of the House of Representatives sent a letter to House Speaker Mike Johnson (R-LA) and Minority Leader Hakeem Jefferies (D-NY) expressing support for comprehensive reform to the Medicare Physician Fee Schedule (MPFS). In the letter, the lawmakers urged the Centers for Medicare & Medicaid Services (CMS) to reverse the proposed 2.8% cut to MPFS, which is currently set to take effect on January 1, 2025.

The letter argued that although Congress has stepped in to mitigate proposed cuts to MPFS each of the past four years, a longer-term reform package is necessary to ensure that physicians are adequately compensated as costs continue to rise. Lawmakers noted that, when adjusted for inflation, Medicare reimbursement for physicians has decreased by 29% over the last two decades.

“We urge Congressional Leadership to move legislation to provide physicians and other clinicians with a permanent, annual inflationary update in Medicare equivalent to the Medicare Economic Index (MEI),” the letter read.

The letter echoed warnings by physicians across the country that cuts to MPFS threaten access to quality care, especially in rural and other traditionally underserved areas, and noted that these issues are likely to worsen in the absence of comprehensive, inflation-adjusted reform. The final rule from CMS is expected to be out in early November, which will determine the full percentage cut in the fee schedule.

To read the letter, CLICK HERE.

To read more, CLICK HERE.

Biden Administration Proposes $2 Drug Model

On October 9, the Centers for Medicare & Medicaid Services (CMS) released a list of 270 prescription drugs that it intends to include in a potential Medicare $2 Drug List Model, which would cap a generic drug’s monthly price at $2. 

“The initial version of the $2 Drug List represents a starting point for the drug list that would be included in the model,” said Liz Fowler, CMS deputy administrator and director of the Innovation Center. “CMS intends to include many drugs that are used to treat common conditions for people with Medicare, with periodic updates to the drug list once it is finalized.”

The drugs included in the list help treat conditions like high cholesterol and blood pressure. To further develop the model, which would be voluntary for plan sponsors, CMS issued a Request for Information (RFI) for stakeholders to evaluate how to improve medication adherence and healthcare outcomes. 

The RFI comes after the agency announced its intention to further reduce prescription drug costs for beneficiaries beyond the drug price controls included in the Inflation Reduction Act. The model could take effect as early as January 2027. 

To read a press release, CLICK HERE. 

To read more, CLICK HERE. 

Senator Elizabeth Warren (D-MA) Releases Bill Targeting Private Equity in Healthcare    

On October 10, a group of House and Senate Democrats led by Senator Elizabeth Warren (D-MA) announced the Stop Wall Street Looting Act of 2024 which would close regulatory loopholes and end incentives that allow investors to “loot” businesses they own. 

The bill’s introduction comes after the collapse of Steward Health, a formerly private equity-backed hospital chain whose bankruptcy led to the recent closure of hospitals across Massachusetts. “Our bill is designed to close loopholes and end incentives for private equity pillaging—and it will make sure what happened at Steward never happens again,” Warren said in a statement. 

The bill was originally introduced in 2021 but gained no traction. The updated version of the legislation is expected to be formally reintroduced when the Senate returns in November. 

To read more, CLICK HERE. 

Texas Attorney General Sues Major PBMs, Pharmaceutical Companies Over High Drug Costs

Texas Attorney General Ken Paxton is suing pharmacy benefit managers and pharmaceutical manufacturers, accusing them of conspiring to inflate the cost of insulin.

The lawsuit, brought against manufacturers Eli Lilly, Novo Nordisk, and Sanofi, as well as pharmacy benefit managers (PBMs) Express Scripts, CVS’ Caremark and UnitedHealth Group’s Optum Rx, claims that drugmakers “artificially and willingly” increased their prices for insulin to be listed on the PBMs’ formularies, then paid a portion of the drug price back to PBMs as administrative fees or rebates.

Texas’s suit follows multiple other lawsuits against PBMs concerning insulin prices, including the FTC’s allegations that CVS Caremark, Express Scripts, and Optum Rx “steered patients toward expensive insulin products to bring in larger rebates from pharma companies.” In response, drugmakers Novo Nordisk and Eli Lilly called the lawsuit ‘meritless’ and ‘baseless,’ emphasizing their commitment to helping lower drug prices for patients. 

To read more, CLICK HERE.