Life Science Compliance Update

November 07, 2017

MedPAC Discusses Part D Exceptions and Appeals Process


On October 6, 2017, the Medicare Payment Advisory Commission (MedPAC) met for its October meeting, where it discussed recent information about Medicare Part D exceptions and appeals. Also discussed were the potential benefits and obstacles to the adoption of electronic tools, such as real-time prescription benefit checks and electronic prior authorization that have the potential to reduce the need for the exceptions and appeals process.

MedPAC commissioners were supportive overall for the adoption of electronic tools to streamline efforts, but stopped short of making specific recommendations due to lack of reliable data.

MedPAC Senior Analyst Jennifer Poldulka outlined the exceptions and appeals process for Medicare Part D beneficiaries, noting that enrollees may request a formulary or tier exception for purchase of a specific drug. She said that plans are required to report data on transactions that are rejected at the point of sale and outcomes of the determination and redetermination appeal steps. Ms. Poldulka said that few pharmacy transactions are appealed to plans for coverage determinations or redetermination and that the plan decisions typically favor the enrollee, based on 2015 data.

It was noted that the most common Part D pharmacy transaction rejections happen when a drug is classified as a non-formulary drug. Ms. Poldulka found that only five percent of redeterminations were appealed to the Independent Review Entity (IRE), and that the IRE usually upholds plans’ redetermination decisions. However, Ms. Poldulka cautioned that not all Part D plan data must be reported, and that some data that is reported does not pass CMS data validation standards. She also mentioned that MedPAC found variations in reported pharmacy transaction rejections and determinations, redeterminations, and IRE outcomes.

MedPAC Research Assistant Emma Achola highlighted four electronic prescribing tools that can be used to help streamline the exceptions and appeals process:

(1) electronic prescribing (eRx);

(2) formulary look-up;

(3) real-time prescription benefit (RTPB) check and;

(4) electronic prior authorization (ePA).

Ms. Achola focused on ePA, noting that it is the most complete option, though there are “significant” obstacles with full adoption of ePA. She said that in order for ePA to operate efficiently, multiple actors within the healthcare system must effectively coordinate. She pointed out that the large number of electronic health record (EHR) and ePA vendors make data integration difficult. Additionally, she cautioned that clinicians may bear additional costs and must embrace practice pattern changes in order for an ePA model to succeed.

Commissioner Discussion

Commissioner Jack Hoadley of Georgetown University highlighted the need for a “good, effective” solution to the appeals process and that data limitations make it difficult to make sense of what the numbers actually mean. He was supportive of ePA, noting that he is encouraged by the technology and believes that it can be a “good route” to improving the exceptions and appeals process.

Commissioner Amy Bricker of Express Scripts called for a requirement centered around eRx. She noted that eRx gives the clinician more control and provides an effective solution for all parties involved. Ms. Bricker said that she is a big proponent of ePA, noting that it’s a “great” way to solve issues such as delays and physician workload, but that there would need to be an adequate incentive model for physicians to participate.

Commissioner Pat Wang of Healthfirst complimented the array of electronic tools that are available. She noted that the key issue is integration of planned formulary rules into EHRs so that the data is found on one platform, saying that the only way to get full adoption of ePA is to make it as easy as possible for the prescriber. She encouraged more discussion about the technology that currently exists within EHR vendors, and how it can be properly integrated into ePA.

Commissioner Dana Gelb Safran of Blue Cross Blue Shield of Massachusetts and Commissioner Kathy Buto both spoke to their support of ePA. Commissioner Craig Samitt of Anthem said that prior authorization is an area of “angst,” noting that it is a costly process for also supports ePA, but cautioned that finding a method to both mandate and incentivize these techniques raises issues. Mr. Samitt encouraged a broader conversation as to the best ways to advocate for eRx and ePA, questioning if there is an existing business model that captures this successfully.

Commissioner Rita Redberg of UCSF called the process for eRx “strenuous” and “not user friendly. She noted that it is likely that doctors would retire before they adjust their practices to account for technological disruption. Dr. Redberg also said that there are much bigger issues within prior authorization that are of concern to physicians and beneficiaries.

November 02, 2017

MedPAC Discusses Next Steps for MIPS


During the October public meeting of the Medicare Payment Advisory Commission (MedPAC), the Commissioners held a session to examine the future of the Merit-based Incentive Payment System (MIPS) in which they discussed recommending that MIPS be repealed. During the session, commissioners discussed the complexities and administrative burden associated with implementing MIPS, with specific criticisms focused on measures and scoring concerns, as well as clinical practice improvement areas.  

David Glass, MedPAC Principal Policy Analyst, outlined in greater detail the concerns with MIPS. The problem with the MIPS scoring system, he said, stems from the inability to measure clinician’s performance on an individual level. Also, he noted that clinicians can choose the six criteria areas that they wish to be measured in, making it easy to optimize an individual score and rendering the score less reliable.

What Does This Mean

It’s unclear how Congress would react if MedPAC were to recommend repealing or replacing MIPS. Congress is often hesitant to adopt on the Commission’s most ambitious priorities, and lawmakers may be hesitant to reopen discussions on MACRA, particularly given its widely bipartisan history. Similarly, provider organizations — many of whom appreciate the relative flexibility under MIPS — have made significant infrastructure investments to support the adoption of MIPS. While a MedPAC recommendation could foster changes to the program in the vein of relieving administrative burden, wholesale repeal of MIPS is extremely unlikely.

Commissioners, who almost unanimously agreed that MIPS was flawed, concentrated on finding an alternative policy solution that would achieve the original ambitions of MIPS by incentivizing providers to achieve high quality patient care.

MedPAC staff presented an alternative to MIPS that included withholding 2 percent of payments from providers not in an advanced alternative payment model (A-APM), and allowing providers to earn back funds by joining groups of clinicians that would be rated on population-based performance measures. This new approach – the Voluntary Value Program (VVP) – would attempt to align quality and value delivery across the health care system and equitably measure physician performance.

Not all the Commissioners agreed that the VVP represented a significant improvement over MIPS. The VVP would require that clinicians join large “virtual” groups for the purposes of achieving statistically relevant population-based data. There was a concern that clinicians would want to form groups with other high performing clinicians and leave the remaining clinicians in less desirable situations behind. While not all the Commissioners agreed that this alternative represented a significant improvement, the overwhelming sentiment among the commissioners was that MedPAC should recommend repealing MIPS.

There continues to be strong support among commissioners for maintaining the development of APMs. It is important to note that recommending to Congress that they repeal MIPS would not affect the APM program that MedPAC supports. 

What Comes Next

MedPAC staff plans to return in December to present draft recommendations to the Commission, which could include a MIPS replacement policy. If they are ultimately approved, they would be slated to appear in MedPAC’s annual March report. We will be sure to monitor the progress of MedPAC in December, and if any progress is made, will provide an update.

September 21, 2017

MedPAC Discusses Pharmacy Benefit Managers


During September 7th’s Medicare Payment Advisory Commission (MedPAC) public meeting, its commissioners discussed issues related to pharmacy benefit managers (PBMs). The slides during the presentation can be found here and an issue brief here as well. The Commission discussed issues related to the conflicts of interest between PBMs and PBM-owned specialty pharmacies, the role for exclusive specialty pharmacy networks in Part D, whether CMS should mandate PBMs’ disclosure of data to plan sponsors, among other topics. The following discussion between the commissioners broke along two lines: those supporting PBMs and others critical of them.

Commissioners Supporting PBMs

Commissioner Bricker (of Express Scripts) made several remarks about PBMs. First, they are required to meet discounts and provide rebates to plan sponsors. Second, they accept financial risk for generating agreed-upon levels of discounts from drug manufacturers. Third, PBMs are required to pass direct and indirect remuneration (DIR) information onto plan sponsors, and she is not aware of any widespread lack of disclosure among PBMs. The commissioner was open to exploring exclusive pharmacy networks in Part D but pushed back against the conflict of interest in PBM-owned specialty pharmacists, suggesting that the competitiveness in the industry forces PBMs to focus on negotiating low prices. Finally, she expressed support for allowing MA-PDs to manage Part B drugs similarly to Part D drugs.

Commissioner Nerenz is quoted as saying, “conflicts-of-interest run throughout the health care system, in some instances, we encourage it.” He said that if conflicts-of-interest are going to be addressed as a concern, it should also be made clear “why it’s a problem here more than elsewhere.” Also, regarding transparency, he said that PBMs work as a consultant to the plan sponsor, and that “in general, we don’t require consultants to disclose elements of their own internal finances.”

Commissioners Critical of PBMs

Commissioner Jack Hoadley raised concerns about the “maze of financial entanglements,” saying it is “unclear where the system saves money and where it adds costs.” He suggested MedPAC should look at where prices go up even as new competitors enter the market and how rebate savings should be shared with beneficiaries. Commissioner Rita Redberg criticized PBMs’ secrecy, fees, and unknown rebates.

Other Comments

Commissioner Warner Thomas acknowledged that “one could have the view that it is so complicated it must be a problem,” adding that, “we don’t really know.” Commissioner DeBusk suggested that it “is complicated enough and there is enough money that singling out a PBM is not the solution to our problem.”

Despite some of the concerns cited with PBMs, several commissioners suggested that the high cost of specialty drugs should be more of a concern than the supply chain. Commissioner Kathy Buto, a former CMS and CBO official, asked, “How big a difference do PBMs make in the value and the reduction in overall cost? Probably not a huge amount,” she said. “It’s probably the manufacture costs and utilization.” Commissioner Buto suggested that “structural changes in Part D” could help address pricing issues, and added expressed support for allowing MA-PDs to manage drugs that under Part B. Commissioner Pat Wang noted she is “not opposed to the recommendations around PBMs, they won’t change the cost of specialty drugs.” Finally, Commissioner Thomas agreed that “this pricing cascade starts with the manufacturer who sets their own price.”


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