The Centers for Medicare & Medicaid Services in October 2018 issued anoutlining a test that would pay for Part B drugs with price points more closely aligned with international rates through the use of private sector vendors that would negotiate drug prices, procure the products, distribute them to physicians and hospitals, and take on the responsibility of billing Medicare.
Although the so-called International Pricing Index (IPI) model is not fully fleshed out in the regulatory filing, one of the key details that has been announced is that the demonstration project would have mandatory participation. This did not sit well with medical societies offering feedback to CMS.
The American College of Rheumatology stated infiled with the agency that “we do not support mandatory demonstration projects.”
The American Society of Clinical Oncology echoed that sentiment in Dec. 31, 2018,filed with the agency. “ASCO cannot support a mandatory demonstration program,” the group noted. “We are concerned about losing access points to oncology care provided by oncology practices, especially in rural, underserved, and low-income areas that are already struggling to deliver care.”
And while the Community Oncology Alliance also spoke against making participation in the IPI model demonstration project mandatory, it went further with its criticism of the proposal.
“COA does not support the IPI Model as proposed in the pre-proposed rule published by [CMS] because we have serious concerns about its impact on cancer patient care and even its legality,” the group said in Dec. 31, 2018,filed with the agency, adding that “mandatory demonstration projects are clearly not in the charter of CMMI [Center for Medicare & Medicaid Innovation] as written into law by Congress. If CMS believes that CMMI has the power via statute to effectively amend Medicare law – in this case the Part B drug reimbursement rate for at least 50% of Part B providers – it (CMS representing the Executive branch) either has overstepped its constitutional boundaries separating the powers of government branches or Congress has effectively handed over its powers to the Executive branch. That would either be illegal or unconstitutional, with the latter case invalidating the section of the law that created and funded CMMI.”
While none of the groups offered support to the IPI demonstration project, all offered suggestions on what could be done to improve on the details outlined in the advance notice of proposed rulemaking.
The American Academy of Dermatology, which like other groups took exception to CMS’ “insinuation” in its regulatory pre-proposal that physicians select treatments based on reimbursement ahead of patient need, suggested in Dec. 19, 2018, comments to the agency that drugs on the Food and Drug Administration’s drug shortage list be excluded from the list.
It also expressed concerns regarding access if a drug goes without international reference pricing because a manufacturer chooses not to sell in certain countries.
“AADA is concerned that this model could result in patients losing access to some drugs when a distributor and manufacturer are unable to agree on a price,” the group said. Similarly, the lag in setting a reference price after a new product is introduced could also create access issues.
AADA also took issue with the fact that vendors could not offer physicians and hospitals volume-based incentive payments or rebates but did not have the same prohibition from vendors receiving such incentives. “Under this proposal, CMS should prohibit vendors from prioritizing drug availability or excluding some drugs from distribution to physicians based on discounts provided by manufacturers. CMS will need to monitor utilization to ensure access to necessary treatments is not delayed or impeded.”
AADA also wants more clarity in how providers will be selected to participate.
The American College of Rheumatology expressed concern that “the administrative difficulties that would be associated with utilizing vendors could lead some practices to lose the ability to provide infusion services. Specifically, we are concerned that the added administrative burden of proposed interactions with the vendors in the model exceeds any inherent benefits to practice.” It added that CMS needs to look at how a potentially mandatory participation could affect specialty physician shortages.
The ACR made a number of recommendations, including making the IPI model participation voluntary; allow for an exit for participants if the program is not working for them; provide incentives that could increase gross reimbursement; increasing provider reimbursement to cover the expenses associated with dealing with vendors; and making sure the agency is adequately tracking the effect on patient access.
ASCO used its comments to reiterate previous comments provided to the agency on revising the competitive acquisition program (CAP), a failed program that used third-party vendors as suppliers for Part B drugs. Among its suggestions were to make the program voluntary; ensuring it does not result in an aggregate reduction in payments to oncology practices; ensuring a CAP does not result in interruption in care; and the CAP should restrict burdensome utilization management requirements.
The Community Oncology Alliance said it is working on an alternative to the IPI model, one that could contain a number of provisions, such as tiered average sales price-based reimbursement; clinically appropriate utilization management techniques; and lowering drug prices without artificial international price indexing.
The American Medical Association in Dec. 20, 2018,to the agency outlined a number of principles that any new vendor-based program needs to include, such as being voluntary; providing supplemental payments to cover the cost of special handling and storage of Part B drugs; flexibility to ensure various ordering issues; preventing variation in treatments for patients; and prohibiting vendors from restricting access using utilization management techniques.
The AMA also offered a range of suggestions for the IPI model, including timeliness of deliveries measured in hours, not days; prohibiting vendors from withholding shipments of subsequent treatments if the initial claim has not been processed; making all treatment options available, even for off-label use; and getting guarantees from vendors on the availability of next-day delivery to any location where the patient is being treated.
Likewise, the AMA suggested that CMS should not set unreasonable deadlines for claims submissions and should provide an adequate number of vendors to ensure choice and access.
“We are also concerned about the impact of the proposed IPI model and its overall impact on costs to physician practices,” the AMA said in its comment letter. “The Administration proposes to allow the vendors to charge administrative fees to physician practices as part of their agreement to provide drug products to those practices included in the model. While we understand that third-party vendors must have a financial incentive in order to participate in the program, allowing vendors to charge physician practices administrative fees would add new, potentially significant increased costs to physicians in acquiring and providing treatments to patients without adequate changes to the reimbursement model to compensate for these costs.”
The AMA said that lower reimbursement combined with administrative fees would likely make the model untenable for physician practices unless changes to the reimbursement model were made.
The AMA also took issue with the focus on single-source drugs and biologics indexed with international pricing, which could create access issues.
“We urge CMS to undertake modeling and simulation of the impact if vendors are unable to obtain these drugs at the reimbursement amount,” the AMA stated in its comment letter. “There is a distinct possibility of immediate adverse patient impact if none of the vendors are able to secure needed clinical treatments.”