Tara O'Neill Hayes August 24, 2018
While most of the regulatory news during the
Trump Administration thus far has been about deregulation,
health care is one sector where the administration has implemented or proposed
an onslaught of new regulations. In particular, the administration has focused
on reforming Medicare and drug pricing.
Since April, the Centers for Medicare and
Medicaid Services (CMS) published 45 final
or proposed rules, primarily relating to the Medicare program. A summary of
some of the most noteworthy provisions can be found here.
Most of the changes are aimed at providing beneficiaries with greater choice
and access to more tailored benefits and reduced costs. Other provisions aim to
eliminate policies that unnecessarily increase costs. Finally, CMS continues to
work to move the traditional Medicare program toward a more value-based payment
system through continued reform of the Accountable Care Organization models.
The administration has also been looking for
ways to reduce drug costs for consumers and taxpayers, through
regulations. This week, officials at the Department of Health and Human
Services (HHS) touted their
myriad accomplishments since the administration published its drug pricing
blueprint 100 days ago. Some of these “accomplishments” are
more deserving of that descriptor than others, but progress toward lower
medication costs—even if incremental—is being made nonetheless.
Most of the progress has come from increasing
the supply of drugs, which puts downward pressure on prices through increased
competition, and the administration likely will continue with this strategy as
it is likely to be the most effective in our market-based economy. The Food and
Drug Administration (FDA) approved a record number of generic drugs in July,
including the first product deemed a “competitive generic therapy” under a new
pathway created by Congress to expedite approval for products where there is
limited competition. The FDA also published guidance to
stop abuse of the Risk Evaluation
and Mitigation Strategy (REMS) system that some brand-name
manufacturers have employed to prevent generic competition.
Other actions will change what Medicare and
consumers pay for their drugs, even if the price of those drugs doesn’t
actually change. CMS has notified Part D
plans that the use of “gag clauses” in their pharmacy contracts
(provisions that prevent pharmacists from notifying patients when paying cash
for a drug would be cheaper than using their insurance) will no longer be
tolerated. CMS plans to extend its decision to reduce Medicare’s reimbursement
rate for 340B drugs to
off-campus hospital sites and to modify the calculation of the average sales
price for biosimilars in a way that will reduce reimbursements. All of these
changes will reduce Medicare patients’ out-of-pocket costs.
As Doug Holtz-Eakin pointed out in the Daily Dish on
Tuesday, anyone expecting a miracle in 100 days would be foolish; the drug
supply chain and pricing policies are quite complex.
There is no silver bullet. But the evidence shows the administration is very
aware of this reality, and if they continue attacking this issue from many
angles, they stand a chance of making real progress.
CHART REVIEW
Tara O’Neill Hayes, Deputy Director of Health
Care Policy
AAF recently examined a new proposal for reforming the Medicare Part D
benefit structure. This proposal would restructure the standard Part D benefit
in a way that realigns incentives—placing greater financial risk for high-cost
beneficiaries on both insurers and drug manufacturers—while also protecting
beneficiaries from catastrophic financial risk through the imposition of an
out-of-pocket cap. AAF’s analysis finds these changes are likely to lead
stakeholders to alter their behavior in ways that reduce overall Part D
expenditures for all stakeholders and ensure the program’s continued success.
https://www.americanactionforum.org/weekly-checkup/flurry-new-health-care-regulations/#ixzz5PPygABle
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