Medicaid Value-Based Payment Proposal Stops Short Of ‘Portability’ Solutions
Executive Summary
US Congress may need to weigh in on how installment payments would be handled if patients switch from Medicaid to commercial insurance or from one state Medicaid plan to another, congressional staffer suggests.
The recent Medicaid proposed rule that would change rules around "best price" to facilitate value based contracting in the commercial market fails to address how installment payments would be handled if patients move in and out of Medicaid programs, Senate Finance Committee health care advisor Stuart Portman pointed out during a recent webinar sponsored by the Institute for Gene Therapies.
“There are certain things that Congress would need to align with this rule should it be finalized … and the biggest issue in our eyes is how we would deal with portability,” Portman said. The webinar focused on the application of the proposal to value based arrangements for high cost gene therapies.
“How would we ensure, if someone who receives treatment in a [value-based purchasing arrangement] in one state’s Medicaid program, who continues to pay if that person goes to the commercial market or goes to another state’s Medicaid program?” Portman asked. “Those are questions that stand out quite a bit. We have spent a lot of time talking about them on [Capitol] Hill.”
Portman suggested that the Centers for Medicare and Medicaid Services “was intentionally silent’ on the issue in the proposal because “it starts to get to the edge of their lengthy amount of authorities … they don’t want to overstep." However, "I’m not here to speak on behalf of CMS, only to say that we think that there is an important role for Congress to add clarity here as to how we actually consider continued payment if someone leaves one state’s Medicaid program,” he explained.
Released on 17 June, the proposal would allow companies to report more than one Medicaid best price per drug and contemplates two routes manufacturers could take to report best price if they are involved in value-based purchasing arrangements. (Also see "CMS Changes The Dictionary: Medicaid ‘Best Price’ Could Soon Mean Many Things" - Pink Sheet, 18 Jun, 2020.)
Portman pointed out that data systems and outcomes tracking are two additional challenges, even if the rule is finalized. “There is a strong belief that the data systems that CMS and the states have need to be updated but … I would say on Capitol Hill there is a lot of belief right now after seeing this [proposal] that without congressional action … the onus falls on the manufacturer in tracking outcomes.”
"If it costs more to track the outcomes than the value of the value-based payments ... no one’s going to want to do these. We have to get the systems in place.”Co-panelist Mark Trusheim, strategic director of the New Drug Development Paradigms (NEWDIGS) program at the MIT Center for Biomedical Innovation, agreed that “the federal government does not often update systems quickly and well.”
And “without specific funding and attention to updating the CMS system, and then more broadly, as Stuart said, how are we actually going to collaboratively collect and track all these outcomes in a way that doesn’t make every product have to do their own thing, is going to really be part of an impediment,” he added.
The cost of updating systems to track outcomes across different insurers may be prohibitive, Trusheim acknowledged. “If you can’t get the cost of executing [a value-based arrangement] down to a reasonably low level, people are going to say the juice just isn’t worth the squeeze. … If it costs more to track the outcomes than the value of the value-based payments ... no one’s going to want to do these. We have to get the systems in place.”
Congressional ‘Clarity’ Needed On Anti-Kickback Concerns
Portman discussed other areas where congressional action could help advance value-based contracting. One would be to define a safe harbor from anti-kickback concerns that might arise.
“I do think Congress plays a role here in figuring out what the right approach is in terms of a process, what are the definitions everyone needs to live by and what are the steps that need to be taken when it comes to CMS" and the Health and Human Services Department's Office of Inspector General, he said. "No one should have any concern that there is ill intent or preferential treatment or anything like that playing a role in any sort of” value-based payment arrangement.
Portman also pointed out that statutory changes could help value-based arrangements “flourish” in the Medicaid program, noting that the proposal is aimed at encouraging novel contracting in the commercial insurance space. “The idea that there are alternative ways to receive care or have payment be made and that a different payment method encourages broader uptake and helps more people, that’s something we would like to see on the Medicaid side as well. But it requires congressional action,” he said.
Nevertheless, the proposed rule marks a significant step for CMS, Portman emphasized. "It's interesting to see CMS open the door to flexibility that they haven't opened" before. Furthermore, “I’m not trying to give Congress a bigger job, we’re are still struggling to accomplish our larger drug pricing efforts writ large," he said. "But I do think Congress plays a role here.”
Senate Finance Committee Chairman Chuck Grassley’s drug pricing bill also includes a provision that would allow state Medicaid programs to pay for potentially curative treatment intended for one-time use through risk-sharing value-based agreements. (Also see "Medicaid Rebate Ceiling Raised To 125% In Senate Legislation " - Pink Sheet, 23 Jul, 2019.)
However, the bill has failed to garner the backing of Senate leadership and recently lost its Democratic support in the Finance Committee, so prospects are dim for any near term progress.