COA Gearing Up for Fight on Proposed CMS Payment Cut

Shelagh Foster, JD

Members of the Community Oncology Alliance (COA) have issued a call to arms to spur a greater lobbying effort to stop a plan by The Centers for Medicare & Medicare Centers (CMS) to implement a drug reimbursement change under Medicare Part B. The proposal to adjust payments by limiting markup on drugs purchased for administration to patients is poorly thought out and could do harm to patients, the group contends.

CMS is viewing this as “an experiment or a test upon practices, and it really is an experiment on patients. They have no mechanism to measure outcomes, and this is really concerning,” said Shelagh Foster, JD, senior director of advocacy for ASCO. Foster joined a panel discussion on the subject at the 2016 Community Oncology Conference this week in Orlando, FL.

The proposal from CMS would trim the Average Sales Price (ASP) plus 6% markup to ASP plus 2.5%, and it would establish a flat fee rate to augment those payments, but oncologists have said they’re already losing money or making only marginal sums on certain drugs. They say sequestration cuts and discounts already applied to Medicare payments further eat away at their profitability, while storage, handling, and other expenses also take a bite out of their drug sales business. They have said the CMS plan could affect their treatment choices for patients, thereby affecting outcomes.

The panel discussion at the COA meeting amounted to a full-blown dissection of the Medicare Part B proposal. However, commentary about the plan slipped into many other segments of the conference agenda, as the proposal is viewed as a major threat to community oncology practices in particular. Hundreds of groups and associations—not just oncology sector entities—have registered their opposition to the plan in letters to CMS and to their elected representatives.

Panelist Brad Tallamy, who serves as director of government affairs for the drug wholesale company Amerisource Bergen, said that he and others have spent the past 3 weeks in Washington working exclusively to persuade legislators to oppose the CMS initiative. He said elected officials are under siege on this issue.

He said legislative staffers have requested that oncologists provide them with specific examples of how the quality of treatment would be compromised under the payment change.

“They want specific examples of patients diagnosed with disease X, or standard of care versus treatment Y, and there is not a generic equivalent, or the brand is standard therapy. They want a comprehensive list of situations so they can go to [CMS] and say, ‘What are oncologists in all of these situations supposed to do?’ Because, under the model, they’re going to be under water on these drugs,” Tallamy said.

Medicare has described the proposed payment revision as a way to get better value for Medicare patients. Drugs included under the plan would include intravenous infusions, injectables, and other drugs that require a medical professional to administer. The proposed system would result in “smarter spending and healthier people” and would better integrate care, CMS explained in a March statement. Whereas physician margins on higher-priced drugs would be reduced, the addition of flat fees would improve the attractiveness of prescribing lower priced drugs, thereby reducing a prescribing bias, CMS stated.

The public comment period on the CMS proposal, which would be implemented through the sub-entity Center for Medicare and Medicaid Innovation (CMMI), will terminate on May 9, 2016, adding to the sense of urgency. Additionally, plans for other drug price management efforts have been announced but not clearly defined, and these will be rolled out in test markets across the United States, CMS has announced.

The COA panel contended that the plan amounts to an effort to control soaring drug prices by capping physician pay. Adding to the cynicism are rumors in Washington, DC that CMS plans to exempt oncology practices that enroll in the forthcoming Oncology Care Model (OCM), according to Ted Okon, executive director of COA, who moderated the panel discussion. The OCM is a CMS-led effort to drive reform in pricing and value in oncology treatment.

“This a concern for us on the Hill,” said Foster. “They think Democrats may look at an OCM carve-out as a solution—they’re taking care of oncologists. It’s really important to explain to them why that’s not the case.”

Roughly 75 oncology practices have been informed by CMS that they are on the short list for inclusion in the OCM, according to Okon, and the next step is for them to complete additional paperwork.

Panelists urged the assembly of oncologists, practice administrators, and other healthcare workers to use available tools on oncology association websites to calculate the impact on their practices that the Medicare Part B proposal would have. They said those results should be shared with legislators and CMS in order to add additional weight to the argument against the planned revisions.

Okon said COA is poised to take legal action and has engaged the services of its law firm, which has begun an examination of executive orders relating to the CMS proposal, “which is a process of getting our ducks in a row.” No official COA board vote has been taken to pursue legal action, Okon said. “The sentiment is clearly [that legal action is] a means of last resort, but we will do it. If you let CMS use CMMI to overwrite a law—ASP plus 6%—then whoever is in the White House, whether it’s Bernie or Hillary or Trump … Donald Trump could come in and use CMMI to build a mandatory demonstration project to build his wall [between Mexico and the United States]. That’s how absurd this could get.”

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