August 2018 Newsletter

In this Issue…

Notes from Joe
· What is TAP?

Washington Update
· CMS Releases Proposed Rules on Medicare’s Physician Fee Schedule and Hospital Outpatient Prospective Payment System for 2019
· The Energy & Commerce Committee Targets Contract Pharmacies in the 340B Program with New Oversight Efforts

Payer Update
· As the Medicaid World Turns

Alliance Update
· Fall Members Meeting 2018

Team Alliance Contact Information

Notes from Joe

What is TAP?
By Joe Pugliese

The Alliance Pharmacy (TAP) is a separate 501(c)(3) organization located in Westbury New York. It was established in 2010 to create a national pharmacy capability to support HTCs across the country. It is licensed as a pharmacy in all 50 states and has grown into a multi-functional organization that offers HTCs, manufacturers and patients a unique set of services. It offers four distinct lines of service:

  1. First, TAP provides traditional specialty pharmacy services focused on the unique needs of the chronically ill bleeding disorders community. TAP’s President, Vincent Fusaro R Ph, a severe hemophilia B patient, has been a pharmacist since 1981.
     
  2. Second, TAP provides contract pharmacy services for your HTC’s 340B program. TAP offers this service at very competitive prices, with the unique focus of a family that has lived with hemophilia. The pharmacy is ACHC (Accreditation Commission for Health Care) accredited.
     
  3. The third service line is Wholesale distribution. TAP is VAWD (verified authorized wholesale distributor) certified. TAP distributes Amicar, Hemlibra, IXINITY, Nuwiq, Synera Patches and Wilate. Together with CIBD Wholesale located in Santa Ana, California, TAP and CIBD provide an “in-house” distribution network in support of HTCs across the country.
     
  4. The fourth line of service is Sample, Trial and Patient Assistance. TAP provides manufacturers, health care professionals and patients these services to take advantage of programs designed to lessen the cost of care and introduce patients and clinicians to therapies at no cost to the patient.

When TAP was created, it signed a memorandum of understanding (MOU) with the Hemophilia Alliance. TAP’s operation and strategic direction is guided by a remarkably talented group of health care professionals, including a number of pharmacists who serve on the Board and provide TAP with a one of a kind breadth and depth of experience in serving the bleeding disorders community. You will be seeing a featured piece in the Alliance newsletter moving forward sharing the focus of TAP’s monthly quality improvement discussions. The Board just recently added two new pharmacist Board Members: Joseph Bailey, PharmD, Blood Center of Wisconsin and designated representative for the Blood Center’s wholesale business in IL and WI; and Lena Charafi, PharmD, Saint Joseph’s Hospital Center for Bleeding and Clotting Disorders, Tampa, Florida.

You can learn more about TAP and meet the full Board on its website: http://thealliancepharmacy.org/.

Washington Update

CMS Releases Proposed Rules on Medicare’s Physician Fee Schedule and Hospital Outpatient Prospective Payment System for 2019
By Ellen Riker

In early July, CMS published its proposed rules for 2019 for the physician fee schedule (MPFS) and hospital outpatient payments (HOPPS). Both rules include payment changes impacting Medicare Part B drugs when an average sales price for a new drug is not available and the HOPPS rule includes an expansion of the reduction in payment for 340B drugs to physician-based departments.

MPFS – Part B Drugs: Application of Add-on Percentage for certain WAC-based payments
Drugs are typically reimbursed under Medicare Part B at the average sales price (ASP) for the drug or biological plus a 6% add-on payment. Part B payments are based on the wholesale acquisition cost (WAC) of the drug or biological when ASP is not available during the first quarter of sales or when Medicare Administrative Contractors determine pricing, which is done for drugs not appearing on the ASP pricing files. The WAC of a drug typically exceeds the ASP, as it does not include any prompt pay or other discounts, rebates or reductions in price included in the ASP.

CMS is proposing, effective January 1, 2019, to reduce payment for drugs when WAC-based payments are being used by reducing the add-on percentage to 3% (from 6%). The proposal is based on a 2014 OIG Report and recommendations from MedPAC to achieve greater parity between ASP-based acquisition costs and WAC-based payments for Part B drugs.

HOPPS – Part B Drug Reimbursement
Reimbursement for Part B drugs provided in hospital outpatient departments are reimbursed at a rate of ASP+6%. During the initial sales period of a new drug when data on prices on drug sales are not sufficient Medicare pays on the basis of wholesale acquisition cost (WAC) plus 6%. Similar to the policy proposed in the Medicare Physician Fee Schedule, CMS is proposing to pay for new drugs under HOPPS at WAC+3%.

HOPPS- 340B Drug Pricing
Starting on January 1, 2018, CMS reduced payments for separately payable drugs and biologicals (other than vaccines and pass-through drugs) acquired under the 340B program from a payment rate of average sales price (ASP) plus 6% to ASP minus 22.5%. In the 2019 proposed rule, CMS is extending this policy to nonexcepted off-campus provider-based departments (PBDs) and for non-pass through biosimilars. Biosimilars acquired under the 340B program will be paid at ASP-22.5% of the biosimilar’s own ASP rather than the reference product’s ASP. In addition, CMS is proposing that any drugs acquired under the 340B program paid for using WAC would be reimbursed at WAC-22.5%.

CMS is proposing that hospitals that purchase under the 340B program continue to use the modifier JG on all claims for drugs. In addition, CMS is requiring hospitals that are excepted from the 340B payment policy of ASP-22.5% – rural sole community hospitals, children’s hospitals, and PPS-exempt cancer hospitals – to report an informational modifier “TB” for 340B acquired drugs and continue to be paid at ASP+6%.

Note: “Excepted Provider-based Departments” are defined as: dedicated emergency departments; off-campus PBDs that were billing for covered outpatient department services furnished prior to November 2, 2015; in “on campus” PBDs or within 250 yards of the hospital or a remote location of the hospital and will not be subject to the payment reduction.

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The Energy & Commerce Committee Targets Contract Pharmacies in the 340B Program with New Oversight Efforts
By Elizabeth (Issie) Karan

On August 1, the Energy & Commerce Committee (E&C Committee) of the House of Representatives sent letters to nine contract pharmacies that participate in the 340B Drug Pricing Program (340B Program), requesting information about their participation in the program. The contract pharmacy recipients included Accredo Health Group, Albertsons Companies, Avella Specialty Pharmacy, Cains Drug Store, CVS Health, Diplomat Specialty Pharmacy, Kroger Company, Walgreens, and Walmart Inc. These new requests for information continue the E&C Committee’s oversight of the 340B Program and appear to be an outgrowth of the recently release Government Accountability Office (GAO) report on contract pharmacies.

The letters outline government oversight of contract pharmacies in the 340B Program by both GAO and the Office of the Inspector General (OIG) at the Department of Health & Human Services and describes how the number of contract pharmacies registered with the Office of Pharmacy Affairs (OPA) have increased since 2010. The letters also ask a series of ten questions, several with multiple subparts, on topics ranging from fees to the structure of the contracts to the distance between contract pharmacy sites and covered entity sites to compliance approaches to prevent diversion and duplicate discounts to treatment of low-income, uninsured patients. Many of these questions, or their subparts, also ask the pharmacies to identify what type of pharmacy (e.g. specialty, mail-order, traditional retail, or independent) is implicated by the question. The letters request answers to these questions within two weeks of their receipt.

On July 3rd, the E&C Committee released 15 draft bills related to the 340B Program for members’ consideration. Of those bills, only one related to contract pharmacies in the 340B Program as it required Congress to implement the recommendations identified by the GAO report on contract pharmacies. This new round of oversight, targeting contract pharmacies, may signal that the E&C Committee is planning to examine legislative options for this aspect of the 340B Program.

Payer Update

As the Medicaid World Turns
By George Oestreich

While it should have been complete about a year ago, the covered outpatient drug rule is still lingering in several states. A total of ten states still do not have an updated and approved state plan amendment (SPA). A few states are contending that they do not need a new SPA with at least one refusing to file a new SPA. The rest are still working with CMS on an approved plan. Once again, if you see one state Medicaid program you have seen one.

The majority of the states are actively expanding Medicaid into managed care (MCO). In most cases, hemophilia patients are also being transitioned into these MCO plans. In those plans, the reimbursement levels are at the discretion of the managed care company UNLESS the contract between the state and MCO specifically dictates otherwise. This continues to provide an opportunity for the HTC to maintain a relationship with the state to set the terms of providing clotting factor and services, thus impacting the ultimate relationship between the HTC and the MCO. That notwithstanding, the HTC needs to negotiate (yes negotiate, not allow a “take-it-or-leave it” contract as offered by the MCO) the terms and condition for participating in these MCO programs. The payer team can assist you with this endeavor.

There are two areas, somewhat related, that illustrate a threat to the HTCs: Hemlibra and reimbursement for comprehensive coordinated care. These issues are of concern in all Medicaid programs and in MCOs.

The introduction of Hemlibra presents at least two problems. The first is determining how it will be billed (either medical or pharmacy). The billing issues are confusing for states from multiple perspectives related to the drug’s dosage, billing unit, and rebate (Hemlibra is rebated as a standard injectable). These issues also translate into 340B price concerns.

Hemlibra and other newer agent also impact the need and scope of coordinated care services to support patients with bleeding disorders. Historically, the product and care coordination services were informally bundled in the pricing of the drug. With the new Medicaid pricing methods and the introduction of a product that is administered subcutaneously, payers are losing sight of the needed care, monitoring and support that assures safety and outcomes for our patients. They have questions regarding where these newer (and more expensive) products fit into the standard of care for hemophilia.

The Alliance is working with several states and a national consulting group to develop a specific list of services consistent with the accepted standards of care for hemophilia patients. These services would then be billed separately from the product. The list of services would be targeted to patients based on the relative risk the patient care. The billing parameters relative to the intensity of services, the frequency services are required and the cost to support these necessary services will be provided and linked to a billing code. Once established, the HTC would bill for the product with a reasonable margin and also bill for the comprehensive coordinated of care services necessary to support the patient at their current risk level. Collectively, these reimbursements should support the broad range of activities provided by the HTC in maintaining the wellness of the patients served.

Please share your thoughts and comments with the Alliance team so we may design and support reimbursement methodologies that adequately support your center and your patients. We work for you!

Alliance Update

Fall Members Meeting 2018
By Sean Singh

We are less than two months away from the Alliance Fall Members Meeting. We are finalizing the agenda and are working to ensure we can share the latest information with you that reflects the many changes we are seeing.

The meeting will be on September 23-25, 2018 and will be held at The Cosmopolitan of Las Vegas, 3708 Las Vegas Blvd. South, Las Vegas NV 89109. We have two full days of presentations on Monday September 24th and Tuesday September 25th. The meeting will end at 5 pm on Tuesday September 25th. You can register here.

We have added more rooms and the block rate is available on Saturday 9/22 and Tuesday 9/25 based on availability. If you have not yet made a hotel reservation, please do so at your earliest convenience. If you are having trouble making a reservation, please let me know. We are in contact with the hotel to try and accommodate everyone.

Here is a DRAFT AGENDA.

  • Marisela Trujillo, Board Chair, will provide an update on how the Alliance is achieving the goals of its 2018 strategic plan
  • Joe Pugliese, President and CEO, will provide a broad overview of Alliance activities, including an update on our manufacturer contracts and an analysis of Hemlibra and other new products
  • George Oestreich, Government Payer Consultant, will provide an update about Medicaid state plan amendments and a look ahead at potential changes coming in 2019
  • Mark Plencner and Jeff Amond, Directors of Payer Relations, will discuss examples of single case payer agreements and how members and the Alliance can work together on payer issues
  • Jeff Blake, SVP of Payer Relations and Michelle Rice, SVP, External Affairs, NHF, will discuss how NHF and the Alliance are working together to keep HTCs in network for clinical and pharmacy benefits
  • Ellen Riker and Johanna Gray, Advocacy Consultants, will provide a Washington Update and share the latest information about Trump Administration and Congressional actions related to 340B reform, the Affordable Care Act and drug pricing
  • Nancy Durben and David Oleson, Physical Therapists at Oregon Hemophilia Center, will discuss clinical uses of ultrasound in an HTC and the financial and logistical hurdles of incorporating ultrasound into an HTC setting
  • Jennifer Roberts, CPhT, 340B Compliance Officer and Care Coordinator at Hemostasis and Thrombosis Center of Nevada, will discuss the steps involved in launching a new independent HTC
  • Stacey Croteau, M.D, Associate Director – Boston HTC, will discuss new products and the effects of Hemlibra on the market
  • Sean Singh, SVP, Marketing and Operations, will discuss how the Alliance can help HTC promote their services and tools the Alliance uses to keep in touch with it members
  • Michael Glomb, Legal Counsel, will provide an interactive dialogue of Program Income. This session will be from 3-5 PM on Tuesday, September 25th – so be sure to book your flight accordingly to be able to attend. Members can submit questions ahead of time to have them discussed during the session – please submit to sean@hemoalliance.org.
  • Talking to the media – How to speak about your 340B program when the media comes around.
  • Best practice – A look at an HTC and what they are doing to enhance patient care.
  • Manufacturing partners – Our partners will present on timely topics.


Team Alliance Contact Information

We work for you! Please don’t hesitate to contact any of us with any questions or concerns:

Name Email Phone
Joe Pugliese joe@hemoalliance.org 215-439-7173
Sean Singh sean@hemoalliance.org 727-388-7326
Jeff Blake jeff@hemoalliance.org 317-657-5913
Jeff Amond amond@hemoalliance.org 608-206-3132
Johanna Gray, MPA jgray@dc-crd.com 202-484-1100
Elizabeth Karan ekaran@feldsmantucker.com 202-466-8960
Roland P. Lamy, Jr. roland@hemoalliance.org 603-491-0853
Dr. George L. Oestrich, Pharm.D., MPA george@gloetal.com 573-230-7075
Ellen Riker eriker@dc-crd.com 202-484-1100
Mark Plencner mark@hemoalliance.org 701-318-2910
Michael B. Glomb MGlomb@ftlf.com 202-466-8960
Theresa Parker theresa@hemoalliance.org
Karen Bowe
Joel Bellucci webmaster@hemoalliance.org 727-504-0491