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Inside Drug Pricing Daily News

CMS Seeks Help From Doctors To Control Drug Costs By Looking At Adding Part D To ACOs

August 15, 2018

CMS officials are seeking the help of doctors to reduce drug spending by soliciting advice on getting accountable care organizations to work with Part D drug plans. Drug makers and ACOs are wary of making doctors responsible for retail-drug spending, but they’re open to the idea if CMS puts safeguards in place.

The ACO rule that CMS proposed last week includes a request for information on the idea. The more than 600-page rule includes one paragraph that requests comments on getting ACOs to work with prescription drug plans, and the rule does not outright say agency officials are considering making ACOs responsible for retail-drug spending. Instead it asks about “financial arrangements to reward ACOs and Part D sponsors for improved health outcomes and lower growth in expenditures for Medicare FFS beneficiaries.”

CMS in 2014 similarly solicited advice on including Part D spending in ACOs, but that request applied to the now-defunct Pioneer ACO demo, which was designed for a handful of advanced health care systems. Agency officials now are considering incorporating drug spending into the Medicare Shared Savings Program, which accounts for the vast majority of ACOs.

CMS officials want to encourage ACOs and Part D plans to coordinate pharmacy care. To do that, they need to know how to base rewards and what clinical and pharmacy data ACOs need, according to the newly proposed rule.

Drug makers and doctors say they understand the desire to make ACOs responsible for drug spending. In responding to the 2014 request for information on Pioneer ACOs, the Biotechnology Innovation Organization said when ACOs are responsible for Part B spending, which includes doctor-administered drugs, and not Part D, they have an incentive to unduly rely on Part D drugs. On the provider side, the National Association of ACOs wrote in November that ACOs are well positioned to manage patients’ medications.

However, drug makers and ACOs also are wary of making ACOs responsible for drug spending. Doctors don’t think they have much control over retail drug spending, and drug makers worry that doctors in ACOs will avoid prescribing new expensive drugs that raise short-term spending, even though those new therapies might reduce health care spending in the long run.

“BIO strongly urges CMMI to incorporate protections added by Congress to the Medicare program more broadly by creating a carve-out for new, innovative medical technologies from both the shared savings calculations and capitated payment rates for Pioneer ACOs,” the trade group told CMS in 2014.

To exempt new drugs from ACO spending benchmarks, CMS could use the existing policy of granting pass-through status under the hospital outpatient pay system, BIO said. Pass-through payments don’t count toward Medicare outpatient budget limits.

BIO also encouraged CMS to consider carving-out some existing biopharmaceuticals, such as drugs that treat hemophilia.

The National Association of ACOs said CMS should conduct a market analysis as the first step toward integrating Part D costs into ACO spending benchmarks.

“This would focus on arrangements currently available with Part D plans, such as gainsharing arrangements with providers, and arrangements with commercial payers, some of which include provider accountability and risk for prescription drug costs for patients,” NAACOS wrote in November in response to CMS’ request for information on revamping the innovation that runs demonstrations.

After that, NAACOS says, CMS should test the idea using a small, voluntary demonstration for ACOs interested in assuming responsibility for restraining drug spending, coupled with the chance for bigger bonuses. -- John Wilkerson (jwilkerson@iwpnews.com)