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August 4, 2023
In this issue we feature:
LUGPA Goes to Washington: July 2023 Fly-in Recap
In July, the Political Affairs Committee and members of LUGPA returned to Washington, DC, to promote the 2023 Legislative and Regulatory Agenda. The fly-in focused on five key issues:
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LUGPA Attendees Nathan Diller, Christopher Cantrill, MD,
Josh Langston, MD, and Guy Manetti, MD,
during Fly-In Hill Meetings. |
- Physician Payment and MACRA Reform
- Legislative Efforts Directed at Pharmacy Benefit Managers (PBMs)
- Expanding Regulations to Allow for In-Office Dispensing
- Making Pandemic-Related Telehealth Waivers Permanent
- Supporting Reforms to Improve the 340B Program.
LUGPA’s efforts come at an essential time of the year for independent healthcare providers. In July, the Centers for Medicare and Medicaid Services released the proposed rule for the physician fee schedule. A 3.3 percent cut is expected on January 1, absent any legislative change. LUGPA members voiced their concerns to members at these meetings, and every member we visited, along with their staff, shared our concerns regarding these cuts. LUPGA will continue to follow the proposed rule and voice our serious concerns about these unfair cuts in our September and October fly-ins.
During these meetings, other important issues were raised, including concerns about the shrinking healthcare workforce, increased vertical consolidation within the healthcare industry, expanding healthcare access to rural areas, needed reforms for reimbursement by CMS, rising healthcare and prescription drug costs, and the necessity of permanently strengthening telehealth post-pandemic.
You can read more about the July Fly-In here. You can also watch a short video featuring attendees of the July event here.
LUGPA Submits Comments to Congress on the 340B Program
On July 28, LUGPA submitted comments to Congress on the 340B Program Request for Information (RFI), expressing our concerns about the program's rapid expansion and its impact on the consolidation of the U.S. healthcare system. In our comments, we recommend several crucial policy changes to reform the 340B program, including amending the statute to prohibit 340B eligibility for future hospital-acquired physician practices, requiring the Centers for Medicare and Medicaid Services (CMS) to survey acquisition costs, and establishing a minimum level of charity care for hospitals to earn the non-profit designation and participate in the 340B program.
LUGPA raised concerns about the significant growth of the 340B program and its contribution to the consolidation of the healthcare market. We highlight that the program's expansion has increased discounted drug purchases, potentially benefiting hospitals rather than the intended vulnerable patient population. We also advocate for more precise patient definitions to prevent program abuse, reforming contract pharmacies, and enforcing non-profit hospitals' obligation to provide a minimum level of charity care in exchange for tax exemptions and 340B program participation. Our comments emphasize that addressing these issues is crucial to ensuring the 340B program fulfills its intended purpose and benefits needy patients.
CMS Introduces Proposed Rule for Physician Fee Schedule 2024
In early July, the Centers for Medicare & Medicaid Services (CMS) unveiled the proposed rules for the Medicare Physician Fee Schedule (MPFS), the Hospital Outpatient Prospective Payment (OPPS), and Ambulatory Surgical Center (ASC) Payment Systems for calendar year (CY) 2024. The proposed CY 2024 conversion factor is set at $32.75, indicating a decrease of approximately 3.4% from the CY 2023 Conversion Factor (CF). According to LUGPA's specialty-based analysis focused solely on the MPFS, this reduction will likely result in a similar decrease for GU-specific codes.
It is important to note that this cut is happening in a healthcare landscape still grappling with the aftermath of the COVID-19 pandemic, alongside challenges such as supply chain disruptions, inflation, and workforce shortages. LUGPA will be submitting formal comments to CMS on the proposed cuts over the next few weeks.
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New Proposed Rule on 340B-Acquired Drug Payment Policy
On July 7, The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule outlining a remedy for the 340B-acquired drug payment policy for Calendar Years 2018-2022. In the proposed rule, CMS suggests implementing a one-time lump sum payment to each affected 340B provider for 340B-acquired drugs. This payment will account for the beneficiary cost-sharing associated with these drugs, and 340B covered entity hospitals will be prohibited from billing beneficiaries for coinsurance on these remedy payments.
To achieve budget neutrality, CMS proposes to offset the cost of the remedy over time. The agency plans to reduce future non-drug item and service payments by 0.5% starting in Calendar Year (CY) 2025 until the full amount is recovered, a process that CMS estimates will take approximately 16 years. The proposed rule will be open for public comment for 60 days until September 5, 2023, allowing stakeholders to provide feedback and suggestions.
Medicare PBM Accountability Act
The "Medicare PBM Accountability Act" is a bill introduced in Congress to amend Title XVIII of the Social Security Act to establish reporting requirements for Pharmacy Benefit Managers (PBMs) concerning prescription drug plans and Medicare Advantage Prescription Drug (MA–PD) plans under Medicare Part D.
The bill includes several provisions to enhance transparency and accountability in prescription drug pricing and management under Medicare Part D. It requires contracts between Prescription Drug Plan (PDP) sponsors and PBMs to include a written agreement outlining the PBM's responsibilities, pricing guarantees, exclusions from guarantees, and detailed information about covered drugs.
Each PDP sponsor must also provide an annual certification of compliance with the reporting requirements along with any additional information deemed necessary. The Medicare PBM Accountability Act would require pharmacy benefit managers to disclose behind-the-scenes practices that drive up prices and costs and aims to allow Medicare to negotiate lower prices for the millions of Americans enrolled in Medicare Part D drug plans.
FTC and DOJ Propose Premerger Review Changes
On July 19, The Federal Trade Commission (FTC) and the Department of Justice (DOJ) released a draft update of their Merger Guidelines, which describe and guide the agencies’ review of mergers and acquisitions to determine compliance with federal antitrust laws. These changes would affect the premerger notification form and rules governed by the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act). Under current rules, entities involved in mergers or acquisitions must submit premerger notifications and wait for 30 days before completing their deals.
The proposed improvements aim to enhance the agencies' review process by requiring additional information from merging entities, allowing for better identification of transactions requiring further investigation. The changes mandate details about transaction rationale, investment vehicles, revenue projections, market conditions, and previous acquisitions.
Additionally, the proposals address concerns about subsidies from foreign entities that pose strategic or economic threats to the U.S., as required by the Merger Filing Fee Modernization Act of 2022. Despite increased antitrust scrutiny, healthcare merger and acquisition activity will remain robust in 2023.
For more information on the updated guidelines, you can read the FTC’s release here.
CMS Issues New Memo on the Maximum Monthly Cap on Cost-Sharing Payments Program
On July 17, CMS issued a new technical memorandum regarding implementing the Inflation Reduction Act (IRA) and the calculation of the Maximum Monthly Cap on the Cost-Sharing Payments Program under Prescription Drug Plans. Starting in 2025, all Part D sponsors are required to offer Medicare enrollees the option to pay their out-of-pocket prescription drug costs through monthly payments over the course of the plan year instead of at the pharmacy point of sale.
The memorandum provides a high-level summary of statutory provisions and examples of monthly cap calculations. The formula for calculating the maximum monthly cap differs for the first month of enrollment and subsequent months, taking into account previously incurred costs and additional out-of-pocket expenses. CMS plans to issue further guidance on program requirements and will seek public feedback before finalizing the guidelines.
New Proposed Bill Aims to Improve Administrative Processes and Improve Access to Affordable Care
On July 19, HELP Committee Chairman Sanders introduced a new bill addressing several healthcare issues, including primary care, workforce issues, and other health policy matters, including site neutrality. Key sections of the bill include measures to enhance price transparency, implement site-neutral payment principles for off-campus hospital outpatient departments, prohibit redundant prior authorization requirements for certain services, and advance access to behavioral health services.
Moreover, the bill would establish automatic interchangeability between biosimilars and biologics to reduce regulatory burdens and enhance access to more affordable biologics. The bill's provisions aim to streamline administrative processes, improve access to affordable care, and address critical healthcare challenges.
A summary of the bill is available here.
LUGPA Supports the Medicare Patient Access to Cancer Treatment Act of 2023
On July 7, a new bill, the "The Medicare Patient Access to Cancer Treatment Act of 2023" (HR 4473), was introduced by Rep. Jodey Arrington. The proposed legislation aims to address the payment disparities between hospitals and free-standing practices when providing cancer treatments. LUGPA believes that leveling the playing field in reimbursement will curb the concerning trend of hospitals acquiring physician practices.
The act also closes a loophole in the Bipartisan Budget Act of 2015, which perpetuated payment disparities favoring higher-cost care in hospital-owned off-campus physician practices. The LUGPA expressed its support for the bill's introduction, and our comments were posted on Rep. Arrington’s website.
LUGPA Policy Brief: Value-Based Care Models
This LUGPA Policy Brief discusses the organization's focus on value-based care models to lower healthcare costs and improve patient access to care. The traditional fee-for-service reimbursement model has been a cost driver, leading to unnecessary tests and procedures. Value-based care ties payments to specific quality measures, aiming to provide better care, improve population health, and reduce costs. Medicare has introduced several value-based care models, such as Accountable Care Organizations (ACOs), bundled payments, and patient-centered medical homes.
Despite progress, only a portion of healthcare dollars flow through value-based models. LUGPA has actively supported the development of specialty-focused APMs and made recommendations to Congress for further payment reform and the inclusion of independent providers in APMs.
For more information, view the Policy Brief here.
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