Washington and Public Policy Update

Web Exclusives —August 18, 2020



What are the practical implications of a flurry of recent healthcare-related actions taken by Congress, the Centers for Medicare & Medicaid Services (CMS), and the White House? In summary, “Some can happen, some will take significant effort, but most are just political grandstanding as we get closer to the election,” said Jayson Slotnik, JD, MPH, Managing Partner with Health Policy Strategies, the moderator of an August 13 public policy webcast from the Association for Value-Based Cancer Care.  

The pro-telehealth steps taken by CMS primarily fall into the first 2 categories, said webcast participants. “This makes sense. Nearly half of Medicare primary care visits were provided by telehealth in April, compared to less than 1% before the pandemic,” said John O’Brien, PharmD, MPH, former Senior Advisor to the Secretary of Health and Human Services (HHS). “CMS and the White House have been very clear that they want to see providers practicing at the top of their license, and that things like state line restrictions on telehealth serve as unnecessary burdens.”

During COVID-19, CMS has added more than 80 codes encompassing additional services that can be furnished via telehealth. But some of the webcast participants expressed concern about proposed code changes to the 2021 Physician Fee Schedule released last week, listing 9 telehealth codes the agency plans to keep and 13 new codes it will add, but 74 others that will end when the public health emergency is over.

“One thing CMS is proposing is to phase out reimbursement for audio-only telehealth visits,” said Ted Okon, Executive Director of the Community Oncology Alliance (COA). “That’s a real problem in rural areas where people don’t have broadband access. When you don’t have that, you can’t do telehealth.”

Will another element of a new CMS proposed rule—the 6.2% additional rate cut for Medicare Part B reimbursement of 340B drugs—go through? Taken together with a 2018 final rule recently upheld by an appellate court, which cut 340B reimbursement by nearly 30%, the proposed rule would produce a 340B reimbursement rate of average sales price (ASP) minus 34.7%, with 6% added overhead and handling costs, for a net proposed rate of ASP minus 28.7%. “Institutions will be underwater on a lot of drugs with that rate,” said Mr Slotnik.

But all the participants in the webcast thought the cuts would go through in the final rule, with the exception of Dr O’Brien, who predicted they might be reduced slightly.

“While I was at HHS I met with a number of institutions that pointed to all the great services they are providing for patients, and opened their books to show me exactly how the 340B funds supported the things they were doing,” said Dr O’Brien. “Those services are important. I just wish there were another way for them to be paid.”

“We agree that the 340B program is out of control and needs reform, and have talked about the idea of that benefit following the patient. On the face of it that sounds like a great idea, but the administrative difficulties with having those discounts follow the patient are very challenging,” said Deborah Kamin, RN, PhD, Vice President for Policy and Advocacy with the American Society of Clinical Oncology. 

“COA will do everything we can to make that possible,” said Mr Okon. “We have supported what the administration has done in terms of reapportioning 340B; even on the federal grantee side, where they have more requirements in terms of accountability and transparency, they don’t do enough.”

And what about the Trump administration’s flurry of executive orders, including a proposed “Most Favored Nation” drug pricing model that would essentially mandate that Medicare would pay manufacturers for their drugs at the lowest price paid by comparably wealthy nations.

“This is more fun policy to campaign on than to regulate on,” said Mr O’Brien. “One problem is that you can’t directly compare US drug prices to those in other countries, because it’s not simply ASP+6, we have 340B and many other manufacturer discounts, so those numbers are wildly distorted. It’s also a hard proposal to try to implement. For example, if companies stop submitting their data to IQVIA, which is where the HHS Secretary gets this information about what other countries are paying, then the government has to find another place to get that data.”

“It’s political theater,” said Mr Okon. “It’s the president checking boxes off on doing something about drug prices. And doing something like this in the middle of a pandemic is one of the most ludicrous things I’ve ever heard of. Clinicians are going to extraordinary lengths in order to provide care, out there on the front lines, and you’re going to throw something on them that will totally disrupt the system even more? It’s not sound policy and it’s not right.”

View the Webcast
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