Q&A with the AmerisourceBergen Office of Government Affairs and Public Policy (AB GA&P)

In our previous Q&A, we explored the Omnibus Appropriations legislation (officially entitled the “Consolidated Appropriates Act, 2023¹”), the Inflation Reduction Act (IRA)² and the three related proposed payment models³ proposed by the Centers for Medicare & Medicaid Services (CMS) and the Center for Medicare and Medicaid Innovation (CMMI).

You can view the article here.

Today, Lisa Harrison, SVP & President of AmerisourceBergen Specialty Distribution and Solutions, engages in a dialogue with Beth Mitchell, VP of AmerisourceBergen U.S. Public Policy and Advocacy, to shed light on the implications of guidance released by CMS pertaining to the Stark Law as the U.S. Public Health Emergency (PHE) comes to an end. We also hear updates on the IRA that have developed since our last discussion.

Join us as we explore the implications of these policies and initiatives on independent specialty practices and learn how AmerisourceBergen continues to advocate for their success and the delivery of quality, affordable care in our communities.

The Stark Law

Lisa Harrison (LH):

Beth, it's great to have you here today. Let's jump right into the topic at hand. Could you provide us with an overview of the Stark Law, the latest related guidance, and its significance for independent specialty physicians?

Beth Mitchell (BM):
Of course, Lisa. The Stark Law, also known as The Physician Self-referral Law⁴, prohibits physicians from referring Medicare patients for certain designated health services to entities with which they have a financial relationship, unless an exception applies. This law was implemented to prevent inappropriate financial relationships that could influence medical decision-making. However, recent guidance issued by CMS in the form of Frequently Asked Questions (FAQs)⁵ has created confusion and potential barriers for independent specialty physicians and their patients.

The guidance warns dispensing medical practitioners that mailing oral medications to beneficiaries would violate the federal prohibition on self-referral (Stark). During the COVID-19 pandemic and associated Public Health Emergency (PHE)⁶, any such Stark violation was protected under a PHE waiver, but with the expiration of the PHE on May 11, 2023⁷, patients who rely on prescription delivery will be put at increased risk.

Patients are often unable to travel due to the complications of their disease including side effects of treatment, or barriers such as lack of transportation. Caregivers also have the potential to be affected by this guidance, as it would prohibit a spouse or any other designated caregiver from picking up a beneficiary's prescription on their behalf directly from the practice itself.

In addition to the burdens that the CMS FAQ places on Medicare patients around receiving access to their medications, this guidance has the potential to be detrimental to physicians who offer medically integrated dispensing (MID) in their practice, as they could be at risk of being eliminated from PBM networks and forced to refer their patients elsewhere.

It is imperative that we address these concerns to safeguard the accessibility and affordability of care for patients in their communities, and the practices that serve them.

LH:
I couldn't agree more, Beth. Our independent specialty practices are the backbone of healthcare in communities across the country. We must do everything in our power to ensure their continued viability.

Can you share any updates regarding the efforts by AmerisourceBergen’s Office of Government Affairs and Public Policy (AB GA&P) to support these practices and advocate for change?

BM:
Our government affairs team is working diligently, alongside AB’s Specialty Physician Services (SPS) leaders and the Community Oncology Alliance (COA), to champion the need for clarity and reasonable regulations. We firmly believe that maintaining community-based access to care, particularly for patients who rely on specialty services, is crucial.

Members of Congress from both parties have expressed interest in this issue, recognizing its potential disruption to patient care and independent practices. We are engaging with these legislators to make them aware of the impact these changes can have and are urging their support to clarify the guidance or withdraw the FAQs entirely.

LH:
Our commitment to supporting our practices has never been stronger. I want to take a moment to emphasize the expertise and dedication that AB brings to this cause. We have an incredible depth of knowledge in the industry, and we are passionate about advocating for our practices and their patients. We understand the unique challenges they face and are determined to drive meaningful change.

BM:

You're absolutely right, Lisa. Our team's expertise and passion are essential in navigating the complex landscape of healthcare policy. By leveraging our relationships and knowledge, we can effectively advocate for the needs of independent specialty physicians. Together, we can protect the viability of community practices and ensure patients continue to receive the care they deserve.

LH:
Can you highlight the ways our practices can get involved and support these advocacy efforts?

BM:
Our practices play a crucial role in shaping the future of healthcare. They can join professional associations, such as COA, and actively participate in advocacy initiatives through AB’s Community Counts platform. By sharing their experiences and concerns with legislators, they can contribute to a collective voice that drives meaningful change. Together, we can ensure that the needs of patients and independent specialty physicians are at the forefront of policy decisions.

The Inflation Reduction Act

LH:
Last quarter we discussed the implications of the Inflation Reduction Act (IRA). Could you provide some updates on the IRA that have taken place since our last Q&A?

BM:
The Inflation Reduction Act continues to be an important focus within the healthcare landscape. The IRA aims to address rising healthcare costs by exploring innovative payment models that seek to prioritize value and quality. Since our last discussion, two notable lawsuits have been filed in relation to the IRA, signaling potential challenges and implications for its implementation.

Merck has filed a lawsuit⁸ concerning the IRA against the U.S. Department of Health & Human Services (HHS) and CMS, as well as HHS Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure, citing that this law will violate the Fifth and First Amendments to the U.S. Constitution.

The litigation argues that manufacturers would be forced to negotiate prices for drugs covered under Medicare Part B and Part D at below market rates, asserting a Fifth Amendment violation which requires the U.S. government to pay just compensation for private property taken for public use. Their second argument indicates that the law will violate the First Amendment’s protections of free speech by requiring manufactures to sign agreements conceding that these negotiated prices are fair.

Additionally, the Chamber of Commerce has also initiated legal proceedings⁹ related to the IRA against HHS and CMS. In its complaint, the Chamber alleged the Medicare Drug Price Negotiation Program that was established by the IRA violates the principles of separation of powers within the federal government. The Chamber publicly addressed the litigation in a statement¹⁰, arguing that “Government price controls harm patients, limit access to medicine, and stifle American innovation.”

The Chamber's involvement highlights the broader concerns and interests of businesses and organizations that may be affected by the IRA's policies and reimbursement mechanisms. The outcome of these lawsuits will undoubtedly have far-reaching implications for the future of the IRA and its potential impact on the healthcare industry as a whole.

In light of these lawsuits, there is a growing likelihood that more legal actions will follow. As the IRA continues to undergo implementation and stakeholders navigate the intricacies of the payment models, disagreements and challenges may arise, leading to further litigation.

LH:
Thank you, Beth. We will be closely monitoring these developments, as they will shape the future trajectory of the IRA and its effectiveness in addressing rising healthcare costs and patient access to quality care.

Can you touch on any noteworthy progress that has been made on the development of the IRA models by CMS and CMMI?

BM:
CMS has issued several significant guidance implementing aspects of the IRA. Initial guidance on the Medicare Drug Price Negotiation Program was released on March 15, 2023, and the first round of 10 Part D drugs selected for negotiation will be announced by September 1, 2023. Negotiated prices for this first round of drugs will take effect January 1, 2026. The next round of 15 Part D selected drugs will be announced February 1, 2025; and subsequently selected drugs will be announced annually thereafter, with the first Part B drugs being eligible for selection February 1, 2026.

In addition, initial guidance was released on the Medicare Part B and D Inflation Rebates, and the list of 27 Part B drugs that triggered a rebate in Q1 was released by CMS on March 15, 2023; although CMS later removed 7 drugs from that list citing updated calculations. CMS released the Q2 list of Part B drugs on June 9, 2023, and noted that the list of 43 drugs was subject to change as additional data was received. The list of Part D drugs triggering a rebate will not be known until the end of the fiscal year, as the evaluation period for Part D runs on a yearly, rather than quarterly, basis.

In response to an Executive Order from President Biden and in an effort to lower prescription drug costs, CMMI has been working on the development of other drug pricing and coverage specific models³ in addition to the sweeping changes made by the IRA to drive drug costs down even more. These models are intended to drive healthcare providers towards value-based care and improve patient outcomes while controlling costs. For instance, encouraging Part D plans to offer Medicare generic prescriptions at $2 or less, cutting Medicaid costs for cell and gene therapies through multistate outcomes-based agreements with manufacturers, and imposing Medicare payment restrictions on medicines approved through the Food and Drug Administration’s accelerated approval pathway.

AmerisourceBergen is actively engaged in discussions to advocate for policies that support AB, our customers and patients. We are engaging with CMS, CMMI, and other stakeholders to ensure that these models align with the unique needs of specialty practices and foster a sustainable healthcare system.

Thank you, Beth and Lisa, for providing valuable insights into the significance of the current legislative landscape and the ongoing efforts of AB and our industry partners to support community care. We remain dedicated to advocating on behalf of our customers and ensuring that quality, affordable care remains accessible to all patients. Stay tuned for our next quarterly update, where we will continue to shed light on the latest government affairs.