Tag: ACOs

Massachusetts Releases PBM Transparency Report

Posted on June 6, 2019 by - Government Affairs

The Massachusetts Health Policy Commission has released its analysis of state PBM activity titled, Cracking Open the Black Box of Pharmacy Benefit Managers. Notably, the report concludes the need for additional PBM oversight and scrutinized the practice of PBM spread pricing.

According to the report, PBM spread pricing practices appear to be increasing in Massachusetts: “…this practice covered 22% of PBM compensation in 2014, but rose to 54% in 2016. This practice, often used as a means of payment for PBM services instead of administrative fees, may have significant impacts on public insurance programs, employer health plans, and consumers. Additionally, the media has reported growing concerns from pharmacists about low reimbursement rates from PBMs in Massachusetts and other states. PBM payments to pharmacies are sometimes even below the pharmacy’s acquisition costs of the drugs, which can affect the financial viability of pharmacies and potentially impact access to care. Yet the extent to which PBMs profit from this practice, and on which drugs, remains largely hidden from payers and the public.”

Additionally, the Commission cited, “As part of the fiscal year 2020 state budget strategy on MassHealth drug prices, the Baker-Polito administration proposed a new requirement for PBMs to be transparent about their pricing and to limit PBM margins under contracts with MCOs and accountable care organizations (ACOs), which the administration projects will save $10 million. To advance transparency, MassHealth recently released a bulletin directing MCOs and MassHealth Accountable Care Partnership Plans to obtain and submit to MassHealth drug-specific data from their PBMs including payments to dispensing pharmacies and rebate and administrative payment data.”

Based on recent activities and discussions with Massachusetts, additional PBM policies are forthcoming. Frier Levitt Government Affairs’ (FLGA) forecasting and monitoring services help keep healthcare and life sciences stakeholders “in the know” regarding pending policy and marketplace changes. Forecasting and monitoring helps stakeholders make better strategic decisions so that they no longer just “reacting” to outside changes. Contact FLGA today for forecasting and monitoring services tailored for you and your organization.

CMS Makes Proposed Copay Accumulator Rule Final

Posted on April 30, 2019 by - Government Affairs

In January 2019, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule titled, “Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2020,” targeting Accountable Care Organizations (ACOs), payers and Affordable Care Act (ACA) exchange stakeholders, with one component of the proposed rule focusing on copay accumulators. CMS has now finalized this proposed rule, allowing payers to implement copay accumulator programs to prevent the application of manufacturer coupons from applying to patient out of pocket costs.

Currently, copay accumulators are being implemented by insurance companies and Pharmacy Benefit Managers (PBMs), harming patient access. With this payor program, the value of copay assistance cards/coupons issued by manufacturers do not count towards out-of-pocket costs that are applied toward deductibles. The result has caused a cost shift onto consumers and away from employers and payers. Unfortunately, in the proposed rule, the Administration defends the use of copay accumulators.

In contrast, Arizona, Virginia, and West Virginia are leading the state legislative efforts this year to ban copay accumulator programs, although Arizona’s approach to this issue is much more measured.

CMS has stated that its final rule would apply to individual market, small, and large group and self-insured group health plans starting in 2020. The final rule is effective June 25, 2019 which will be sixty days from its April 25, 2019 publication date. There will be no further public comments taken for this rule.

States are currently trending against CMS’ position regarding copay accumulators. If you would like to target your state legislation, Frier Levitt Government Affairs (FLGA) can lobby state legislators to prohibit copay accumulator programs. Contact FLGA today to get started.