Q&A: Legislative updates and healthcare advocacy report

We recently spoke with Rita Norton, Senior Vice President of Government Affairs and Public Policy, to learn about the latest legislation that may impact physician practices. Rita walks us through developments in potential reform for DIR fees, the pending Medicaid copay assistance benefit rule, and the effects of white bagging legislation.  

Q: AmerisourceBergen Government Affairs and Policy, in collaboration with our business leaders, have continued to seek ways to amplify the growing alarm and concerns expressed by our physicians, pharmacists, and healthcare administrators in asking the Centers for Medicare and Medicaid Services (CMS) and Members of Congress to address Direct and Indirect (DIR) fees. Why is this important, what are the latest developments, and why should the healthcare community get involved now? 

Rita Norton: DIR fees—fees that Pharmacy Benefit Managers (PBMs) charge outside of administration fees, after point-of-sale—have continued to overwhelm community physician practices and independent pharmacies. The financial impact of post- point-of-sale “clawbacks” issued by PBMs and health plans is varied and unpredictable, sometimes hitting up to several months after pharmacy counter transactions.

In January, CMS issued a proposed rule intended to reduce this unpredictability. If finalized, effective January 1, 2023, the proposed rule would redefine the negotiated price as the baseline, or lowest possible payment to a pharmacy. All price concessions from network pharmacies, negotiated by Part D sponsors and their contracted PBMs, would have to be reflected in the negotiated price that’s available to the patient at the point-of-sale. They would also have to be reported to CMS on a prescription drug event (PDE) record through the plans applying all the price concessions at that sales point.¹ 

While the goal is to create stability, CMS assumes that pharmacy business decisions resulting from the proposed rule “will result in a slight increase in pharmacy payments of 0.1–0.2 percent of Part D gross drug cost.” Over 10 years, CMS estimates the potential impact of the proposed could stand to reduce beneficiary cost sharing by $21.3 billion, increase Part D costs for the government by $40 billion (due to increases in direct subsidy and low-income premium subsidy payments), and save manufacturers $14.6 billion. ²

The physician/patient advocacy group Community Oncology Alliance (COA) suggests that the proposed rule has “interesting implications for pharmacy providers, including community oncology practices.” COA concludes, “CMS notes that this policy does not violate the noninterference clause given that it only directly impacts the price that is used to determine beneficiary cost-sharing and the information that is populated and reported on the PDE record, but it does not dictate the amount that is ultimately paid to the pharmacy or the timing of payments and adjustments.” COA has long been critical of PBM practices (see a detailed report commissioned by COA on their website) and points out that DIR fees not only skew drug costs, but PBMs also use them to dictate which drugs physicians may prescribe to patients. 

We filed our comments to the proposed rule on March 7, signed by Jenny Sherak, President and Senior Vice President of AmerisourceBergen’s Specialty Physician Services division, and Jenni Zilka, Senior Vice President of Community & Specialty Pharmacy and President of Good Neighbor Pharmacy/Elevate Provider Network. The positions we advocated in AmerisourceBergen’s comment letter and in the letters of stakeholder trade associations helped to advance and protect the needs of our physician and pharmacy customers and their patients. We amplified our position and the advocacy efforts of our customers’ trade associations advocacy in Our Independent Voice and Community Counts through email alerts to AmerisourceBergen Specialty GPOs and ION Oncology Practice Network (which included a link to submitting a comment to CMS), urging our customers to support the efforts of National Community Pharmacists Association and COA in contacting Congress and CMS.  We also issued a call to action for AmerisourceBergen’s team members, encouraging them to contact their Members of Congress to call on CMS by utilizing AmerisourceBergen’s grassroots advocacy platform. Finally, through Good Neighbor Pharmacy and Elevate, we also supported a pharmacy stakeholder letter—expected to have 200+ organizations in support—to HHS urging the agency to address DIR fees and finalize the proposed rule.

Q: What can you tell us about manufacturer-sponsored commercial copay assistance? Do you anticipate changes in the coming year?
Rita Norton: In late 2020, CMS finalized a Medicaid rule that will go into effect on January 1, 2023. Under this new rule, manufacturers will need to ensure that the full copay assistance benefit goes directly to the patient or face best price implications with Medicaid. 

Manufacturer-sponsored commercial copay assistance has faced challenges from commercial payers, likely because most commercial payers tend to deploy an accumulator strategy. This strategy blocks manufacturer copay assistance from counting toward the deductible and maximum out-of-pocket spend. 

This change is a critical and timely challenge for the industry. I think we can expect to see manufacturers take actions to mitigate potential adverse impacts on patients, and on their copay assistance programs. 

Q: With changes on the horizon in 2023, what can you tell us about the potential impact of the drug pricing provisions of the Build Back Better Act? 

Rita Norton: As of this writing, the chances for enactment of the Build Back Better Act (BBB) Act remain uncertain without substantial revision. While there is significant skepticism that Congress will enact any part(s) of the BBB, support for many of the drug pricing proposals appears to remain strong enough to be included in another legislative opportunity should the BBB be shelved for this year. Near-term potential vehicles could include the annual appropriations bills expected to be packaged with other must-do provisions providing opportunities to include “catch all” issues popular with consumers in a year-end “catch all” Omnibus bill. Other provisions impacting providers including Medicare provider reimbursement and sequestration relief may be addressed in the omnibus as well. But Congress will need to hear from their constituents, and we are here to help. 

 

Q: Speaking of Congressional legislation, AmerisourceBergen was part of the successful effort to get Congress to delay Medicare physician fee cuts. What is the status of that delay? 

Rita Norton: Yes, AmerisourceBergen was very glad to be part of that win for physicians and their patients and we thank Specialty Physician Services and our partner physicians for sending letters to Members of Congress on this issue. 528 doctors sent 1,576 emails to Congress through a Community Counts action alert, and that kind of response is noticed! President Joe Biden signed into law on December 10, 2021, legislation that:

• Delayed 2 percent sequestration relief in full from January 1, 2022 until March 31, 2022, with a 1 percent cut from April 1, 2022 to June 30, 2022; and with the reinstated amounts added at the back end (in 2030) and the 2 percent cut reinstated effective July 1, 2022. 
• Fully paused the 4 percent PAYGO sequestration cut until 2023. 
• Included a one-year 3 percent increase in the Medicare Physician Fee Schedule (largely reviving the current 3.75 percent “COVID bump up” that was scheduled to expire on December 31, 2021). 
• Delayed implementation of the Radiation Oncology demonstration for one year for a second time, through January 1, 2023.  

AmerisourceBergen Government Affairs & Policy is working with Congressional leaders to try and prevent the 1 percent and 2 percent sequestration cuts from coming into effect, but we are facing challenges in finding a legislative vehicle given that the near-term Congressional calendar is occupied by budget negotiations and the Supreme Court nomination. We will continue to work with our stakeholder partners to address these issues.

Q: How has AmerisourceBergen Government Affairs & Policy engaged on the issue of white bagging legislation? 

Rita Norton: As most of your readers know, under a “white bagging” arrangement, a patient’s insurance company requires the drug to be purchased through the insurer’s exclusive specialty pharmacy of choice and then shipped to the physician’s office for administration to that specific patient. This complex requirement can interrupt the normal course of treatment and may interfere with the physician’s ability to provide efficient care.

We are carefully monitoring the progress of, as of early March, 19 white bagging bills in 13 states, with the key bills in play in Michigan, Minnesota, Ohio, Illinois, West Virginia, Arizona, and Oklahoma, and some momentum is building against this practice. We carefully craft our positions with stakeholders, such as COA, and we regularly speak with physicians who keep us well grounded in the real-time effects of policies and industry trends and are active advocates on issues such as white bagging and DIR fees.

References:
1. 87 FR at 1915 (CMS–4192–P), January 12, 2022. 2022-00117.pdf (govinfo.gov)
2. 87 FR at 1849 (CMS–4192–P), January 12, 2022. 2022-00117.pdf (govinfo.gov)