Congress’s Tax Proposals Affect The Rheumatology Community

Dr. Angus Worthing

Dr. Angus Worthing

Angus Worthing MD @AngusWorthing
Greetings, patients, colleagues and health policy advocates!
This month’s Washington update covers how Congress’s tax proposals affect the rheumatology community, the American College of Rheumatology’s  plan to fight Medicare’s adjustments to Medicare physician-administered drug costs, the good news of Medicare’s new individualized biosimilar reimbursement, advances in the rheumatology-specific Alternative Payment Model and developments in Congress’ awareness about the perilous pharmacy benefit manager system.

 

Senator Addresses ACR
Senator Lisa Murkowski (R-Alaska) spoke at the  American College of Rheumatology (ACR) Annual Meeting in San Diego this month by video about her efforts in Congress to create patient-friendly health reforms — check it out here (3 minutes). I was honored to introduce her video to those in attendance, and I can attest that there was ample applause! ACR awarded Sen Murkowski the 2017 Award for Public Leadership in Rheumatology for championing causes that are critical to the rheumatology community. She’s the best!
 


Tax Reform Bills
On Nov 16, the House of Representatives passed tax legislation repealing waivers that allow grad students to avoid paying tax on tuition assistance grants, which makes higher ed tuition grants taxable. This would reduce incentives to go into biomedical research fields, and could really limit rheumatology research. Meanwhile, the Senate tax bill keeps those waivers, fortunately, but proposes to repeal the Affordable Care Act’s individual mandate to buy insurance. The Congressional Budget Office (CBO) estimates that such a move on its own could cause 13 million people to lose insurance. The ACR released a statement urging Congress to protect the tax waivers for graduate student tuition and to support continuous health insurance coverage. Finally, and of dire concern to us, the CBO also estimated that these tax reforms may increase the deficit such that further sequester cuts would be triggered — up to 4% more in Medicare payments. This would drive doctors out of Medicare and push them to close their doors to Medicare beneficiaries who have their medicines injected or infused in an office center. The ACR is actively monitoring this fast-moving development.

 

The Part B “Perfect Storm”
Challenging news: On Nov 2, the Centers for Medicare and Medicaid Services (CMS) finalized a plan to adjust Medicare physician-administered drugs (a.k.a., Part B drugs) costs in the Medicare fee for service program (“MIPS”) starting in 2020 based on doctors’ 2018 performance. This means that doctor groups that provide expensive rheumatology drugs may be at risk of reimbursement cuts of up to 5% of those high drug fees — growing to 9% over 3 years. This could potentially bankrupt a practice passing through those drug costs with a 4% margin, and would therefore severely limit access to treatments. The  ACR advocacy team has already voiced our strong opposition to the Congressional committees responsible for fixing the problem of MIPS adjusting Part B drug costs, and we are now working with coalition partners (other specialties like oncology and ophthalmology, and patient advocacy groups) to leverage our message. We’ll soon have a grassroots campaign at the Legislative Action Center and Simpletasks.com. Meanwhile, a “perfect storm” is brewing related to costs: MIPS will begin weighing costs 10% in doctors’ 2019 performance scores. Also, since Medicare has not clearly shown how Part D prescription drug costs will be counted, Part B providers may be unfairly given worse cost scores. Stay tuned!

 

Biosimilars
Biosimilars are the follow-on biologic drugs akin to generics. Lots of good news here! On Nov 2, Medicare changed an Obama-era policy on reimbursement of biosimilars given in the doctor’s office. Instead of paying doctors based on average price of all the biosimilars that refer to one bio-originator (Inflectra and Rcmsima that are biosiilar to Remicade, for example), Medicare will instead reimburse each drug based on its own individual billing code. Thus, reimbursement will reflect the doctor’s office costs more accurately and fairly, to preserve patients’ access to treatments. Also, on Nov 16, CMS changed the cost-sharing policy for patients who will be using self-administered biosimilars in Part D, so that biosimilars won’t possibly be more expensive for patients. The ACR advocated strongly for both of these reforms and they are both victories for a more seamless transition to the era of safe and effective biosimilars.

 

Alternative Payment Model (APM) for Rheumatology
As folks may know, Medicare’s system of paying doctors is changing this year to a two-pronged approach called MACRA: one is a fee-for-service (“MIPS”) track and the other track pays for value (“APMs”). At the ACR Annual Meeting this month, Dr. Kwas Huston unveiled a near-final draft of the new APM for rheumatoid arthritis. If approved by Medicare, it could allow rheumatologists to avoid MIPS cuts and instead receive monthly fees for taking care of people with rheumatoid arthritis, while adding valuable services and reducing costs using a guideline-driven treatment pathway. Days later, ACR volunteer leader Dr. Colin Edgerton testified at a Congressional hearing on APMs about the APM development experience. He asked Congress to to reduce thresholds necessary to qualify for the APM track, and lower the financial risk required in APMs. These reforms would make it easier for rheumatologists to participate in the pay-for-value track. Check the video! (Dr. E starts at 2:35) The ACR has also asked Medicare for those changes. Meanwhile, CMS made it a bit easier to qualify in the APM track by proposing to allow Medicare Advantage participation to count as APM participation for medical groups to avoid possible cuts from MIPS.

 

Pharmacy Benefits Managers
Yes, PBMs. If you haven’t heard of them by now please read this or this. More good news here too! We may soon see more transparency in this opaque drug-pricing process. Medicare just proposed to include more transparency for PBMs in Part D, and to base drug copayments on the lower rebated price instead of the PBM list price. Also, an October Senate hearing (the 2nd of 3 on drug prices) saw rigorous questioning from both sides of the aisle about the rebate system. President Trump’s pick to lead HHS, Alex Azar, has publicly blamed PBMs for high drug prices and advocated for changing the US drug distribution system. Meanwhile, the ACR and ATAP will be asking the Federal government for clear definitions of the rebates and fees that PBMs incur, as a first step toward forcing transparency and ultimately reforming the system. A shout out to Dr. Mattie Feldman, the national leader on PBM reform, seen here giving her outstanding lecture on PBMs to ACR Advocates for Arthritis on Capitol Hill in September.

 

Thanks to those who have read this far — and if you did, you understand the high-stakes challenges and opportunities that rheumatology advocates are facing. No doubt you’re fired up! For more information, check out www.simpletasks.org and www.ATAPadvocates.com.

 

A Happy Thanksgiving to all!

 

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