AMCP Posts Summary Of Key Provisions In Senate's H.R. 3590"

Main Category: Public Health
Article Date: 26 Nov 2009 - 2:00 PDT

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On Saturday, November 21, 2009 the U.S. Senate voted 60-39 to end debate on a motion that sets the stage for the Senate to proceed to consideration of a 2,074 page health care reform bill, H.R. 3590 (the "shell" House bill is now entitled the "Patient Protection and Affordable Care Act of 2009"). H.R. 3590, as approved for debate, is based upon the measures previously approved by the Senate Committee on Finance and the Senate Committee on Health, Education, Labor & Pensions (HELP). The Senate will begin its historic debate when Senators return from the Thanksgiving recess.

The Congressional Budget Office (CBO) scored H.R. 3590 as costing $849 billion over ten years, which is the least costly of any of the Senate or House bills that had previously been considered. CBO and the Joint Committee on Taxation (JCT) estimate that the proposal would reduce the federal deficit by $130 billion over the 2010-2019 period and would ensure 94 percent of Americans would have insurance coverage, but they acknowledged that their estimates are subject to substantial uncertainty.

The following is an AMCP staff summary of some of the key provisions of interest to the Academy in the Senate bill (H.R. 3590, the "Patient Protection and Affordable Care Act").

Medicare Part D - Drug Price Negotiation

Government negotiation of drug prices does NOT appear in the Senate bill. With regard to the Exchanges (see below), the Senate bill specifically prohibits the Secretary from participating in negotiations between plans and drug manufacturers.

Medicare Part D - Coverage Gap

Similar to the House bill, the bill will reduce the size of the "doughnut hole" by raising the ceiling on the initial coverage period by $500 in 2010. It also incorporates a voluntary agreement with the drug manufacturers to provide discounts of 50% for brand-name drugs and biologics used by Part D enrollees.

Other Medicare Part D Issues

- Uniform Exceptions and Appeals Process: The bill requires Part D plans to use a single, uniform exceptions and appeals process.

- Prescription Drug Waste in Long-term Care: Similar to the House bill, the bill requires PDPs and MA-PDs to "utilize dispensing techniques," such as daily, weekly or automated dose dispensing, to reduce waste associated with unused medications in long-term care facilities.

- Independent Medicare Advisory Board: The bill creates an independent, 15-member Medicare Advisory Board tasked with presenting Congress with comprehensive proposals to reduce excess cost growth and improve quality of care. In years when Medicare costs are projected to be unsustainable, the proposals take effect unless Congress proposes an alternate plan that achieves the same level of savings. The Board would be prohibited from making proposals that ration care, raise taxes or Part B premiums or change Medicare benefit, eligibility or cost-sharing standards.

- Medicare Part D - Formularies: The bill gives new authority to the HHS Secretary to identify classes of clinical concern to be protected on Part D plan formularies.

- Medicare Part D - Vaccines": The bill includes a GAO study on the barriers to Medicare beneficiaries' access vaccines under Medicare Part D.

Public Health Insurance Plan

The bill establishes a new government-run health insurance plan within the exchange that would compete with private health plans. Under the government plan, among other requirements, a public plan would be established that would negotiate rates directly with providers and hospitals (rather than use Medicare rates). States would have the option of not offering the public plan on the state's exchange.

Health Insurance Purchasing Pool/Exchange

The bill creates "American Health Benefit" insurance exchanges at the state level, although states would be able to join together and form regional exchanges. Eligible individuals would include those who do not have qualifying coverage from an employer or public program, Employers with fewer than 50 employees would also be eligible to purchase insurance through the exchanges, though states would have the option of increasing the eligibility level to employers with fewer than 100 employees. In 2017, states could also allow larger employers to participate. Employers who do not provide insurance would be penalized $750 per employee. Prescription drugs are included as "essential benefits" but do not require professional services of pharmacists.

The exchanges would be operational as of January 1, 2014.

PBM Disclosure

The bill requires that PBMs that enter into contracts with plans that participate in the health exchange disclose certain financial information, including rebate information to the HHS Secretary. The bill requires that PBMs that enter into contracts for Medicare Part D plans, MA-PDP plans and plans operating on the exchanges disclose the following to plan sponsors: the percentage of prescriptions filled through retail, community and mail order pharmacy, as well as generic fill rates; an aggregate amount of all rebates, discounts or concessions received from drug manufacturers and the differences between the price paid by the plan sponsor to the PBM and the price the PBM pays to the dispensing pharmacy.

Repeal of the Antitrust Exemption for Insurers

Contrary to the House bill, the bill specifically notes that it makes no changes to the antitrust laws.

Follow-on Biologics

The bill authorizes FDA to approve follow-on biologic drugs. The bill would grant biologics manufacturers 12 years of market exclusivity (four years of data exclusivity) for innovator biologic products. The first follow-on biologic approved as interchangeable with the innovator product would receive one year of market exclusivity.

Comparative Effectiveness Research

The bill establishes the "Patient-Centered Outcomes Research Institute," which is outside of the federal government. Government officials would be prohibited from serving on the board of the institute. However, government agencies would receive preferential treatment in the rewarding of research contracts by the institute. The Secretary of HHS would be allowed to use the results of CER (along with other information) to make coverage and reimbursement determinations as long as the decision process is transparent and allows for a public comment period. However, such determinations cannot be made solely on the basis of CER.

Generic Exclusion Agreements

There is nothing on generic exclusion agreements in the bill, contrary to the House bill that prohibits brand name drug companies from settling patent litigation with generic competitors by paying them to delay marketing their products.

[Note: It is more likely that the Senate Judiciary bill on this issue will be offered on the Senate floor. The Senate JudiciaryCommittee passed S. 369, the "Preserve Access to Affordable Generics Act," on October 15, 2009. The legislation would prohibit an agreement between a brand-name manufacturer and a generic manufacturer in which the generic manufacturer receives anything of value or agrees to not market a generic product for a specified period of time. The Federal Trade Commission (FTC) would be able to exempt any agreement that is deemed in the best interests of consumers. Any generic manufacturer that is found in violation of the agreement would forfeit the 180-day "first filer" exclusivity period.]

Medication Therapy Management Grants

The bill provides for two types of federal grants that would promote medication therapy management (MTM) services. The bill provides for: (1) grants to eligible entities to establish community-based, multidisciplinary teams to support primary care practices with the provision of "pharmacist-delivered medication therapy management services (including 'medication reconciliation"), as a component and (2) grants to eligible entities for the specific purpose of implementing pharmacist-delivered MTM services in the treatment of chronic diseases. Also, the bill includes a Center for Medicare and Medicaid Innovation within CMS. This Center is charged with providing grants for coordinated care programs that include medication therapy management services. In addition, performance bonuses are provided to plans for various care management programs, including MTM programs that are more extensive than is required under Sec. 1860-D, as determined by the Secretary.

Sunshine Provisions

The bill includes requirements that manufacturers and distributors of covered drugs, devices, biological, or medical supplies under Medicare, Medicaid, or CHIP report to the HHS Inspector General information on their financial relationships with physicians. The bill does NOT include reporting requirements for pharmacists, contrary to the House bill which includes pharmacies, pharmacists, health plans, pharmacy benefit managers and their employees, organizations that sponsor continuing medical education, and professional organizations, among others.

Medicare Advantage Reforms

- Medicare Advantage (MA) Payments: The bill uses a competitive benchmark rather than a fee-for-service benchmark, as in the House bill. MA payment rates would be based on the average of the bids from MA plans in each market. Payment reforms would be phased in over a four-year period beginning in 2011.

- Medicare Advantage Bonus Payments: The bill creates performance bonus payments based on a plan's level of care coordination and care management and achievement on quality rankings.

Center for Medicare and Medicaid Payment Innovation

The bill directs the Secretary to establish a Medicaid Global Payment System Demonstration Project, in coordination with the Center for Medicare and Medicaid Innovation, in up to five states.

Fraud, Waste and Abuse

Similar to the House bill, the bill makes numerous changes to fraud and abuse laws, as well as enhances the authority of the HHS Inspector General. The bill includes new exclusion authority for obstructing an investigation or audit, new civil monetary penalties and exclusion from Medicaid or CHIP, if an entity owns, controls or manages an entity that is suspended, excluded or terminated from Medicaid or is affiliated with an individual or entity that has been suspended, excluded or terminated from Medicaid.

Quality Measures

The bill requires HHS to develop national priorities for quality performance improvement and to develop new quality measures/metrics for providers of health care services. It establishes an Interagency Working Group on Health Care Quality to achieve collaboration among agencies, avoid duplication, and assess quality efforts. It supports research, technical assistance and process implementation grants awarded through the Agency for Healthcare Research and Quality (AHRQ). Grants funded under this program will identify, develop, evaluate, disseminate and provide training in innovative methodologies and strategies for quality improvement practices in the delivery of health care services.

Conclusion

The Academy is closely monitoring health care reform developments and will do all it can to advocate for its positions as legislation moves forward on Capitol Hill. Please check http://www.amcp.org or your Daily Dose for updates.

Source
Academy of Managed Care Pharmacy

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