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Is Mandatory Participation in Medicare Demonstrations Necessary?

May 25, 2022
10:31 am

Recently, Health Affairs Forefront, published a post by Dan L. Crippen, former director of the Congressional Budget Office and currently a Healthcare Leaddership Council consultant, that should be a catalyst for discussion on a critical element of the Center for Medicare and Medicaid Innovation’s future direction.

In his post, Dr. Crippen enters the debate over whether models being tested by CMMI should have mandatory or voluntary participation on the part of healthcare providers.  Some have argued that demonstration projects have floundered under voluntary participation because providers have brought in cohorts of comparatively healthy patients not reflective of the Medicare beneficiary population at large. He points to several examples, though, to make the case that voluntary participation did not result in adverse selection and that a more weighty problem plaguing CMMI demonstration projects has been the lack of timely data flowing to model participants.

The Crippen post is below and at the link above, which will take readers to the Health Affairs Forefront site.

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The tenth anniversary of the Center for Medicare and Medicaid Innovation (the Innovation Center) was in 2020. This anniversary was accompanied by several retrospectives of the results of the Innovation Center’s first decade of operation. Unfortunately, most of the analysts, including those from the Centers for Medicare and Medicaid Services (CMS), reached similar conclusions: that the demonstrations deployed by the Innovation Center neither saved much money nor greatly improved quality, the two primary objectives set out for the Innovation Center in the Affordable Care Act.

Past and present Innovation Center directors concluded that the primary reason for the demonstrations’ failure to achieve the objectives was selection bias by the providers who had volunteered to participate in the various models. The claim is that the providers brought with them a cohort of healthier-than-average patients, making it easy to show savings relative to the benchmark. Relative to providers with sicker patient populations, these providers were more motivated to participate in the demonstrations due to the potential opportunity to earn a bonus from the Innovation Center if they spent less than the Innovations Center’s benchmarks.

Some of the demonstrations included an alignment algorithm for assigning patients to providers within an accountable care organization (ACO), at least one of which assigned patients depending upon their previous use of participating providers in the ACO. In some demonstrations, there was considerable turnover in both the beneficiaries and providers, which theoretically allowed ACOs the opportunity to alter their risk pool by selecting or changing providers (or other aspects of the model) to create a patient population with certain characteristics or health care needs. The former and current directors concluded that only mandatory participation by providers would overcome this perceived selection bias.

However, before seeking a solution to this problem, the question of whether selection by voluntary providers contributed to the disappointing results of the demonstrations should be explored. This article summarizes a multitude of analyses surrounding the reasons the demonstrations show little savings or quality improvement. The analyses indicate that the failure was not due to voluntary, as opposed to mandatory, participation by providers. The article then suggests several ways that any future selection challenges could be addressed, should they occur, without requiring mandatory participation.

 

The Evidence On Selection Related To Voluntary Participation

As described below, outside observers, papers published by think tanks, academic research, contractors hired by the Innovation Center to provide an independent evaluation of the demonstrations, as well as reports by the Innovation Center itself neither found the existence of selection bias nor recommended mandatory participation. These experts offered many suggestions on how the Innovation Center could achieve its stated objectives, but mandatory participation was not among them.

The ACO model is one of the Innovation Center’s longest running demonstrations, albeit in different forms over time, which attempts to measure cost-effectiveness and quality of treatment. It is the early experience of this model that most proponents of mandatory participation cite as proof of selection bias, primarily because so many providers dropped out at the beginning of the demonstration. Only 123 (36 percent) of the 339 ACOs entering the program between 2012 and 2014 were still participating in 2020.

There were several reasons for the attrition, much of which occurred early in the program. Many of the provider groups were small and ill-equipped to provide the complex reporting and data required by the Innovation Center. The participants did not understand the convoluted requirements before they enrolled, and only thereafter realized they were very unlikely to achieve savings, and therefore the bonuses offered by the Innovation Center. Moreover, participants did not have the processes, experience, or capital to ultimately assume the downside risk required later in the demonstration. In accordance with the rules of the program, they were allowed to drop out and did so.

An outside evaluator concluded: “Pioneer ACO stakeholders also noted that the relationship between the ACOs’ activities and their financial results were not well understood or articulated and that they struggled to firmly understand the Pioneer model rules such as the beneficiary alignment algorithm and financial benchmark calculations…[which] raises the question of whether the alignment algorithm may de-align or not align beneficiaries who are less healthy.”

Other credible sources determined that voluntary participation did not result in adverse selection. For example:

  • One analysis concluded: “We also find no evidence that ACOs systematically manipulated provider composition or billing to earn bonuses…. Robustness checks revealed no evidence of residual risk selection…. Careful examination of selection issues revealed that these findings were not driven by nonrandom participation.”
  • A study published by the Brookings Schaffer Center concluded: “Evidence suggests that there was minimal systematic patient-level risk selection by ACOs in the first three years of the Medicare Shared Savings Program (MSSP).”  
  • An internal CMS evaluation noted: “It does not appear that participants are selecting healthier patients.”
  • The Innovation Center engaged outside experts to evaluate the operation of each demonstration, several of whom included explicit conclusions about selection bias. One expert concluded: “This finding suggests that AIM [AIM Investment Model] ACO participant changes over time did not result in selection of certain types of beneficiaries, on average.”

No evaluator of the many demonstrations suggested that that mandatory participation was necessary to produce better results. In one demonstration, the third-party reviewer concluded that the results of the mandatory model were no better than voluntary models. One study directly compared results for mandatory verses voluntary participation and concluded: “spending changes did not differ between the voluntary and mandatory hospitals. This result does not support the concept that organizations perform better when self-selecting into programs.”

If Not Selection, Then What?

While adverse selection did not distort model results, studies did show that there was a myriad of other factors that plagued the initial demonstrations and persisted throughout much of the first decade. A common complaint by providers was a lack of timely data from the Department of Health and Human Services on demonstration operation and performance. One CMS internal evaluator lamented that the inability of CMS technology systems to perform basic tasks for value-based care, including providing performance data to participants, was a key contributor to the reasons providers dropped out.

Additionally, in a 2020 Medicare Payment Advisory Commission meeting, commissioners expressed the view that the multiplicity and overlap of demonstrations made it difficult for participants to sort out the effects of one demonstration from the other. This burden of sorting through the complex requirements for providing data and reports, and inconsistent reporting specifications between the demonstrations, caused many smaller participants to quickly drop out of the demonstrations.

The benchmark calculations, which were intended to measure providers’ effects on costs, were too narrowly drawn and created disincentives that increased over time. The use of historical performance for providers could lock in original calculations of savings/costs. Savings by providers with high-cost patients resulted in lower future benchmarks, which made it more difficult to continue to achieve savings, reducing the incentive to do so.

Many of the shortcomings of previous demonstrations were recognized by the Innovation Center in its assessment of the first decade. The review included a number of suggestions, including health equity a centerpiece of every model; reducing the number, complexity, and redundancy of the many models; re-evaluating how the Innovation Center designs financial incentives to ensure meaningful provider participation (presumably including mandatory participation given the director’s previous comments); better enabling participants to handle down-side risk by providing the tools to participate; reducing the complexity of establishing benchmarks; and expanding the definition of success to include lasting transformation and a broad array of quality investments, rather than focusing on each model’s cost and quality.

Looking Ahead

Despite evidence to the contrary, the Innovation Center has not publicly dropped its position that adverse selection is a problem and that the solution is to require mandatory participation by providers.

Even if selection remains a concern for the Innovation Center, there are ways to detect and correct for selection. One alternative is the expanded use of risk adjusters to assess each participant’s risk before, during, and after the demonstration. Risk adjustment, which is typically used to establish initial payment rates, can also be used to evaluate the risk pools of participants at the end of demonstrations, with payments and shared savings adjusted accordingly.

If benchmarks remain the comparator, risk adjustment will become more important, especially as applied to high- and low-cost beneficiaries as benchmarks converge over time. Risk adjustment is and will continue to be an imperfect process but can be improved by better data, improved statistical techniques, and perhaps, artificial intelligence.

Evidence from many different sources shows that adverse selection has not heretofore been an issue and is not a cause of the failures of past Innovation Center demonstrations in meeting the objectives of savings and quality. Other factors in the operation of the demonstrations are much more likely to explain the results. If selection should ever become an issue, there are ways to adjust models other than forcing providers to participate.

 

Understanding State Laws for Interchangeable Biosimilars

October 15, 2021
12:40 pm

An important development in the biopharmaceutical world, with significant ramifications for patients, is the progress being made on biosimilars.  These are products with the same safety and efficacy as FDA-approved biologic medications, but potentially less costly for patients.  Below, executives with Cardinal Health, a global manufacturer and distributor of healthcare products and a Healthcare Leadership Council member, discuss the laws governing the interchangeability of biologics and biosimilars and how pharmacists can provide the medication that best meets their patients’ needs.

Understanding State Laws for Interchangeable Biosimilars

by Sonia T. Oskouei, PharmD, BCMAS, DPLA, Vice President, Biosimilars, Cardinal Health and Jeff Baldetti, Director, Biosimilars, Cardinal Health

Earlier this year, the FDA approved Semglee (insulin glargine-yfgn), the first interchangeable biosimilar in the US. The approval represented a significant milestone since the development of the Biologics Price Competition and Innovation Act in 2009 for a few reasons: it is the first interchangeable biosimilar to be approved in the US, it’s the first official biosimilar for an insulin product, and it’s the first biosimilar that will primarily be dispensed in retail pharmacies. With the approval comes the significant opportunity to help expand access to high-quality, lower-cost treatment options for patients with diabetes.

What Are Interchangeable Biosimilars?
Biosimilars are biologic products that are highly similar to, and as safe and effective as, existing FDA-approved biologics. Interchangeability is a regulatory designation that is unique to the US and is achieved through the submission of additional data (which per FDA guidance, may be in the form of switching studies). Interchangeability designation does not denote clinical superiority, as all biosimilars- whether interchangeable or not- meet the FDA’s rigorous regulatory standards for approval.

Why is Interchangeability Important?
The most important aspect of interchangeability is the implication associated with the designation. Interchangeability designation ultimately allows “pharmacist-level substitution,” whereby a pharmacist can automatically substitute the branded biologic with the biosimilar (as done routinely with brand and generics), per state laws. Given these implications, the designation is likely to have the greatest impact on biosimilars dispensed by pharmacists in the retail/specialty pharmacy setting (e.g., products billed under the pharmacy benefit).

Biosimilars are developed with the promise of increasing access and lowering costs for biologic therapies, which represent the most expensive drug category in the world. Interchangeability designation can position pharmacists to further enhance patient accessibility to biologics at a lower cost through automatic substitution authority.

State Pharmacy Laws
Currently, all 50 states and the District of Columbia have laws pertaining to interchangeability; however, pharmacy laws and practices vary from state to state, including requirements related to provider notification/permission, patient communication, and documentation practices. In addition, some states require that interchangeable products can only be swapped if the cost is lower, which adds a need for pharmacists to understand the managed care landscape, including PBM/payer formularies and policies and their impact on patient out-of-pocket costs. With the launch of an interchangeable version of Semglee (insulin glargine-yfgn) expected later this year, plus more interchangeable biosimilars seeking approval, it is critical for pharmacists to understand state requirements and prepare to operationalize these new treatment options.

Resources for Pharmacists
To help pharmacists navigate individual state laws regarding interchangeability, Cardinal Health has created an interactive map that provides pharmacists with key information to help prepare for interchangeability so they’re able to appropriately educate and support their patients with treatment options. The map details how each state defines interchangeability, clarifies the requirements pharmacists must follow to substitute biosimilars, and defines what healthcare providers and pharmacists need to know about switching to a biosimilar.

 

 

 

The Innovation-Competition-Affordability Connection and its Importance to Patients

June 15, 2021
12:49 pm

One of the biggest headlines in healthcare this month occurred when the Food and Drug Administration gave approval to a new treatment for Alzheimer’s disease developed by Biogen. This is a development that brought hope to the millions of individuals and their loved ones who have or will have a terrible and complex disease that is taking an increasing toll on our society.  The Biogen approval speaks to the importance of biomedical research and development in this country as well as the FDA’s Accelerated Approval Pathway program, which makes novel treatments available in areas of unmet need.

But the good news is not without controversy.  There is already criticism of the recommended market price of this product.  In that light, I found the blog post below from Genentech CEO Alexander Hardy to be relevant and insightful.  As he points out, the most effective pathway to achieve greater affordability for breakthrough medicines is to encourage more innovation and the development of competing therapeutics.  Remember the firestorm that occurred over price levels when Gilead Sciences developed a cure for Hepatitis C?  Those prices dropped precipitously when other biopharmaceutical companies developed competing products.  It’s an important lesson for policymakers that innovation is a more effective and patient-centered tool for achieving affordability than heavy-handed regulation.

I am pleased to share the perspectives of Genentech’s chief executive.

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Innovative Medicines Demand Responsible Pricing

The FDA approval of Biogen’s new Alzheimer’s disease medicine will be, I hope, the first of many new treatment options for patients to help combat this devastating condition. With this news, there has also been much commentary on the price of the medicine.

At Genentech, we’re well aware of the challenges of developing treatments for Alzheimer’s disease. We’ve spent the last decade researching potential targets and have experienced a number of scientific setbacks. But we’re proud to remain in the fight and are currently developing three investigational medicines – two in Phase II and one nearing Phase III completion. Despite the challenges, we remain optimistic about our potential to launch one or more medicines in the future.

Alzheimer’s is one of the biggest public health challenges of our time. The impact of the disease on patients and caregivers is truly tragic and we applaud Biogen for their efforts to develop a treatment.

We believe, like many others in the industry, that the price of a medicine must be based on the benefits it provides to patients and society. Ultimately, the price must enable patients to have rapid and broad access and provide a reasonable return that will fund future R&D investments.

Given the growing worldwide incidence of Alzheimer’s disease, it’s imperative that people with the  disease have multiple treatment options to choose from. Hopefully, a number of additional medicines will be approved that deliver more benefits to patients and society. With those advances, the resulting competitive market dynamics will prevail and bring a decline in prices. The availability of more therapies should drive healthy competition, delivering savings to the healthcare system overall and ensuring patients and doctors have important choices in the medicines they receive.

There is an opportunity now for lawmakers and industry to work together on policies that will fuel efficient market-based competition. We must also provide a safety net in the form of a cap on Medicare out-of-pocket costs to ensure that patients have access to life-changing medicines.

At Genentech, we’re committed to working every day to bring even more hope for patients and caregivers living with Alzheimer’s disease. If we are successful, we will price our medicines responsibly so that they reflect the benefit they provide to people with Alzheimer’s disease and society as a whole. We’re committed to working with the U.S. Administration, Congress, and others to find sustainable, system-wide solutions that lower costs while also protecting scientific innovation and ensuring patients have access to the life-changing medicines they need.

Waiving Patent Protections for Vaccines is a Damaging and Short-Sighted Move

May 06, 2021
3:42 pm

Biopharmaceutical companies are receiving justified praise for the rapid speed with which they produced effective vaccines against COVID-19, offering hope for a return to normalcy from a pandemic that has cost lives and damaged economies.  The success of vaccine production underscores the critical importance of investments in research and development and the value those investments can bring in the future.  Pfizer scientists, for example, are already exploring how the mRNA technology used to create a COVID-19 vaccine can be utilized to develop advanced treatments for cancer, HIV, and other diseases.

Thus, it’s mystifying that there is a push to discourage this kind of investment by shredding the intellectual property protections held by the vaccine makers.

The Biden Administration has done a superb job in COVID-19 vaccine distribution and administration, but it has taken a misstep on the intellectual property issue.  Yesterday, the U.S. Trade Representative said that the United States would now support a move in the World Trade Organization to waive patent protections for vaccine products.  India and South Africa had initiated this action, ostensibly to open the door for poorer countries to create their own generic version of vaccines.

Seeking this waiver is a move based on a false premise that vaccines are not making their way around the world.  In fact, vaccine manufacturers have pledged to supply over 12 billion doses by the end of this year and working with the World Health Organization to supply doses to 90 developing countries at a discounted price. Eliminating patent protections will do less for global vaccine production and dissemination than what is already occurring.  Any country seeking to make its own version would have to acquire vaccine components and the knowledge on how to manufacture the products and then generate large-scale manufacturing capabilities.  This would take significant time.

The long-term harm here is to future research and development.  Intellectual property protections are vital to the development of new treatments, cures and vaccines.  Without those protections, there is no incentive to invest in the research cycle that can require years and billions of dollars just to get one new product through the development pipeline.  The WTO move achieves limited short-term gain while risking damage that could leave the world more vulnerable to the next public health crisis.

Enhance and Expand Access to Vaccines

September 16, 2020
3:09 pm

With progress continuing on development of a vaccine for COVID-19, conversations are taking place over the best strategies for distributing a vaccine, once approved, to millions of Americans.  In the post below, two executives from Pfizer – one of the companies involved in coronavirus vaccine development – point out that local pharmacies are a logical vaccination site, but that will also require harmonization of state laws that affect the roles of pharmacists in providing care.

Enhance and Expand Access to Vaccines

By:

Robert Popovian, Pharm.D., MS, Vice-President US Government Relations, Pfizer Inc.

Dave Hering, Regional President, North America, for Pfizer Vaccines.

It was not so long ago, and certainly within the memory of many older Americans, when the fear and uncertainty we are experiencing today with coronavirus were much more common. Before the advent of vaccines for a vast number of diseases, it was not uncommon for people to know friends and family members who had contracted measles, mumps, rubella or polio. Families routinely had to deal with the impact of these diseases on everyday life and, more significantly, manage life-long disabilities like loss of vision, hearing or mobility.

There are scores of studies on the positive impact that vaccination has had on public health. In addition, vaccines are one of the most cost-beneficial interventions in health care. It is estimated that caring for unvaccinated adults costs the U.S. health care system approximately $7 billion per year.

Vaccination rates in the United States for most serious ailments are in the 90th percentile for children, while for adults, the immunization rates are abysmal. For example, less than 50 percent of adults age 19 and older get a flu shot every year. What’s even more alarming is that for adult patients between the ages of 18 and 65 with risk factors (e.g., patients with asthma or chronic bronchitis or smoking history), the rate of pneumococcal vaccination is only 23 percent. Both measures are well below the Healthy 2020 targets set by the U.S. Office of Disease Prevention and Health Promotion.

One approach to encourage adult vaccination is to further expand the ability of community-based pharmacists to administer vaccines. Patients and health systems have benefited most when pharmacists are allowed to immunize patients.

Roughly 9 out of 10 Americans live within 5 miles of a pharmacy that provides vaccination services to patients without an appointment. Community pharmacies offer extended hours of service compared to other sites-of-care, which is especially important for younger, healthier adults for whom immunization rates are exceptionally low.

Also, the evidence is clear that allowing pharmacists to administer vaccines is the lowest-cost alternative for providing this essential public health service. For the most vulnerable adults, our seniors, there may be additional access issues because a majority of family physicians either aren’t stocking or are unable to bill for all available vaccines, especially those reimbursed under Medicare Part D.

Unfortunately, there are significant variations in state laws governing pharmacists’ ability to immunize patients. States that have more restrictions on pharmacists’ ability to provide vaccinations may negatively affect public health and increase health care costs. Therefore, it is of utmost importance for states to expand and harmonize state laws governing pharmacist authority to immunize and allow pharmacists to administer all Food and Drug Administration-approved and Advisory Committee on Immunization Practices (ACIP) recommended adult vaccines.

The recent guidance from Health and Human Services (HHS) allows pharmacists to administer any COVID-19 vaccine, which is FDA-authorized or FDA-licensed, is a step in the right direction. However, the HHS direction under the Public Readiness and Emergency Preparedness Act (PREP Act) is time-limited and mandates that it be based on ACIP recommendation.

Reducing vaccine-preventable disease prevalence and overall health care costs is critical for all Americans. The best way to achieve both goals is through increased vaccination of adults in the United States, particularly at the pharmacy. Policymakers must take the important step of implementing state laws to expand pharmacists’ immunization authority for adults, so we are better prepared if and when the next public health crisis occurs.