Updated Questions Questions Questions: Lequembi and CMS (with two answers) Here is what CMS said to STAT: "Medicare’s actuaries expect the drug Leqembi, made by the Japanese drugmaker Eisai and sold in partnership with Biogen, to cost the traditional Medicare program around $550 million in 2024, and the entire Medicare program $3.5 billion in 2025, a spokesperson for the Centers for Medicare and Medicaid Services confirmed to STAT. That projection forecasts a large increase in uptake over the next year and a half." As usual I just have questions: 1) Is this the actuarial contingency margin or actual expected expenditures? Answer expected expenditures (OACT) 2) Does that estimate include the cost of diagnosis and checking that patients do not have ARIA? Answer The PMPM estimates include the cost of the drugs themselves, the cost for administration of the drug, and the costs of associated diagnostic testing and office visits. (OACT) 3) If just the drug, did the actuaries consider the primary site of service is the HOPD where drugs are part of the overall budget neutrality equation? Its not like physician fee schedule where drugs were separated from the other fees. 4) Are rural hospital proponents examining Medicare hospital outpatient payments shift away from smaller urban and rural facilities to large urban due to the addition of these and similar highly complex services. (I note the cost of the "340B" fix demonstrated the link clearly for all to see in the HOPD final rule for 2023* I'll put the shift at the bottom.)) Example of budget neutrality shift: "As required by statute, CMS implemented a 3.09% reduction to the payment rates for non-drug items and services to achieve budget neutrality for the 340B drug payment rate change for CY 2023." #lequembi #CMSOACT #ruralhospitals
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One of those ideas spinning out the cross implications of provisions. Triggered when I was annoyed lately when I saw a reference to the inclusion of PBM rebates in best price. But I thought I had better check it. Regs say the following are excluded “(17) PBM rebates, discounts, or other financial transactions except their mail order pharmacy's purchases or where such rebates, discounts, or other financial transactions are designed to adjust prices at the retail or provider level.” So what happens if the new Finance legislation passes that adjusts the coinsurance in high gross to net classes? I dunno. Let’s look at 1927k and let me know what you think the courts would say needs to be fixed: “ prices charged which are negotiated by a prescription drug plan under part D of title XVIII, by an MA-PD plan under part C of such title with respect to covered part D drugs” Is there a limited ability now under Roper Bright for the agency to limit -if it wanted to- longheld agency positions That correct regs?
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Metformin is the Better Deal 5 Bucks vs net $500 - $600 net “When GLP-1s were compared with metformin, the researchers found a nonsignificant trend toward a lower risk for colorectal and gallbladder cancer. Kidney cancers, however, showed an increased risk with GLP-1 treatment relative to metformin (HR 1.54, 95% CI 1.27-1.87). The increase in kidney cancer risk suggests "the need for continued monitoring in patients being treated with GLP-1 receptor agonists," And please bear in mind this is all correlations (interesting tho given the different effects of insulin vs metformin) and a big so what on the “non significant trend” Kudos to the researchers tho for comparing to stds of care, unlike the placebo in the heart trial
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Can risk adjustment paper over the high cost of new therapies? “ This month, CMS is set to announce what insurance companies will owe or receiverisk-adjustment payments this year, which will give the industry its first indication of whether the revised system answers their concerns. A flurry of novel and high-priced treatments for diseases such as sickle cell disease, hemophilia and cancer raises the stakes.“You've got a lot of very expensive therapies in the pipeline here and it's just super important that the risk-adjustment system works as well as possible so that there's no incentive for a health plan to try to design benefits or networks to exclude these high-risk treatments or the providers that provide them,” said Kris Haltmeyer, vice president of policy analysis for the Blue Cross Blue Shield Association.” Not so much. Risk adjustment under the current model doesn’t do such a great job for rare therapies because of the statistical technique. A recent paper found that the HHS HCC underpaid for rare diseases by 33 percent. There are models built by machine learning that can do better (link in comments). Given redistributional, complex and we don’t seem to be able to ask the right questions (maybe we are overpaying for healthy people) or move off old modeling techniques* I am not optimistic. *MedPAC favorable selection study prime example #raredisease
New gene therapies strain risk-adjustment for exchange plans
modernhealthcare.com
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Thoughts on nfp operating margins “Earlier this year, UPMC reported nearly $28 billion in revenue for 2023. However, the hospital chain also reported an operating loss of nearly $200 million last year. For the first quarter of 2024, UPMC reported a $103 million operating loss. That compares to a $100 million gain in the first quarter of 2023.” They say they need to fly back and forth to their overseas hospitals (none in low income countries) On the day of the layoffs someone flew to Boca Raton and back. Operating margins are a fiction (for NFPs)
News Anchor/Sports Director at WTAE-TV Pittsburgh. Using this page to share stories of interest to the Pittsburgh regional business community.
UPMC officials said the jet is an efficient way to conduct business. They have leased a similar jet in the past. However, some nurses dealing with staff shortages said they were outraged not only by the jet but also by UPMC paying millions to its former CEO.
Months before announcing 1,000 layoffs, UPMC leases new $50 million jet
wtae.com
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Has Stifling Reasonable Dissent Hit Health Affairs? Much is made in the press that Americans are divided into camps and don't talk with each other. On May 23, 4 current and former MedPAC members published a dissent on the MedPAC MA recommendations. The authors concluded that MedPACs new model is incomplete and overestimates certain effects. It does not suggest that the current situation is copacetic; its a matter of degree. (Link in comment) On July 1, in a rebuttal to the rebuttal, 4 Health policy experts write that the rebuttal was wrong. I won’t belabor analytical details from the July article (I intend to follow up.) But in an example, the July article says MA is out of whack because plans report codes for CHF for a diabetic with that condition because the payment is higher. This is sadly outdated, just google the 2019 AHA scientific statement on the importance of treating to both so the medication is correct. I share my concerns about the July 1 conclusion below: First, the study says the Commission operates by consensus. The law only requires reporting individual votes. No Congressman would write a requirement for consensus (and I can personally validate the rationale for the language.) Second, it characterizes the May rebuttal as an “attack’ on MedPAC that was “highly unusual”. Why do the July authors say a disagreement is an “attack"? Strong word. Instead could they have not contacted or asked the May set "why did you make a rebuttal" and reported on that rather than say "unusual" (gaslighting term)? Finally, the July piece says the May rebuttal reflects the authors’ "normative values.” What does that mean in this context? Was it their desire to see "Medicare as a sacred promise”? Or, the premise of “holistic thinking”? A political comment? You got me. In contrast, Gail Wilensky and I wrote a letter to MedPAC laying out questions on the MA analysis this winter. We were received graciously by Chairman Chernew who followed up and spoke to us for an hour (even tho he was ill). I still have two questions and will lay those out in the later correspondence. #MedPAC #MA Eric Hargan Lisa Grabert Kenny Kan Abigail Chance Colin Yokanovich Gail Wilensky Brian DeBusk Matthew Hittle Brian Miller Craig Samitt, MD, MBA Charles Chapman
Estimating Overpayments To MA Plans: MedPAC Critics Get It Wrong | Health Affairs Forefront
healthaffairs.org
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More on The Change to Chevron Unsurprising, that an excellent recap of the decision was written by someone whose views as CMS Acting General Counsel we relied on when legislating. 3 key points from this brief: First, the decision applies beyond regulations to guidance and other statements. Second, “deference to federal agencies—even where expressly prescribed by Congress—is permissible only in the context of “fact-bound determinations,” not pure questions of law, which belong solely to the courts.” So perhaps we can be less worried about the agencies losing their strength as scientific and clinical experts; Third, it rightly warns “But companies seeking to persuade an agency to adopt a policy change may have a tougher road to hoe, as agencies are likely to be more cautious in the wake of Loper Bright when promulgating rules, developing administrative guidance, or taking any other action that requires the agency to interpret or implement a statute.” To potential actions, one suggested is on Medicare coverage. I cannot speak for the authors but in general in law the secretary has been expressly delegated authority over coverage; but coverage with evidence is not statutory. Thus the agency may be more limiting in its decisions forward than coverage with guardrails. Too bad, independent registries have tremendous public health value, ex the Israeli Covid vaccine or the Danish GLP-1 or ESRD USRDs. Another suggested is issues around Medicaid coverage. Here again I interject that long been clear that Medicaid has been playing fast and loose with the legally required open formulary. (Oh perhaps that is why the recent panic on the cost of new cures.) Thanks again Thomas Barker and coauthors #coverage #chevron #formularies
The Supreme Court struck down the doctrine of Chevron deference, ending four decades of judicial deference to agency interpretations of ambiguous statutes. For healthcare and life sciences companies, this decision will significantly impact the future of regulation, creating both opportunities and risks. Read more from Thomas Barker, Andrew London, Ross Margulies, Beth Neitzel, Marilyn Icsman and Regina L. DeSantis: https://bit.ly/4cvsiLR
Chevron’s Demise—And What It Means for Healthcare and Life Sciences Companies
foleyhoag.com
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Will PBMs Be Hit by Chevron? i have been reading with interest the financial reports about the losses of PBMs -hundreds of millions-because of contract pharmacy restrictions. I also read the letter by Senator Cassidy on contract pharmacy to a PBM, referring to their referral percentage and other fees thru their wholly owned 340B tpas (gives whole new insight to the MTF fiasco by allowing these fees to flow outside of the CMS processes. But also doesn’t that mean the PBM knows at the counter that these are 340B and can unduplicate them from the MFP? Real question.) Excerpt from the new SCOTUS case “The first step was to discern “whether Congress ha[d] directly spoken to the precise ques- tion at issue.” Id., at 842. The Court explained that “[i]f the intent of Congress is clear, that is the end of the matter,” ibid., and courts were therefore to “reject administrative constructions which are contrary to clear congressional intent,” id., at 843, n. 9. But in a case in which “the statute [was] silent or ambiguous with respect to the specific issue” at hand, a reviewing court could not “simply impose its own construction on the statute, as would be necessary in the absence of an administra- tive interpretation.” See diff with some courts on state laws in article below. And yes that conflicts with one appeal court decision- the 8th in favor of the ark law. In the big picture, if silence is not permission, what happens to contract pharmacies? I want to write more and I will later on.
340B providers are at a disadvantage after the latest court ruling on contract pharmacies
https://www.hfma.org
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A little history on why this is momentous I wanted to add on to Bills excellent post and the one on the ability for new entities to revisit the law. CRS: “Chevron is unquestionably one of the foundational decisions in administrative law. A search of the Westlaw electronic database indicates that, at the time of this writing, the Supreme Court and lower federal courts have cited the Chevron decision more than 18,000 times. In the last decade or so, however, the Chevron framework has come under increasing fire from various corners of legal academia, the courts, and the political branches. Over that same period, the Supreme Court has relied on the Chevron framework less and less. It is difficult to identify a single cause for the Court’s recent silence on Chevron, but changes in the Court’s personnel as well as increasing attacks from some corners of academia may account for some of the Court’s reluctance to rely on the doctrine. In the Court’s most recent full term, Chevron went unmentioned in three cases where an agency interpretation of federal law was at issue” It of course will move down stream Differences Between the Supreme Court and Courts of Appeals Although the Supreme Court may have reduced its application of Chevron over the last decade, the courts of appeals have not. Because Supreme Court decisions bind lower federal courts, they generally must apply the Chevron framework when reviewing agency interpretations of statutes” #this is important from the decision, the decision states it is the courts that have the expertise to decide statutory interpretation. “That is no less true when the ambiguity is about the scope of an agency’s own power—perhaps the occasion on which abdication in favor of the agency is least appropriate.” https://lnkd.in/euQBRnk5
Nationally Recognized Expert in Health Care and Life Sciences, Educator, Regulatory Consultant, Patient Access Advocate, Independent Director, and Retired Sidley Austin Partner
Methinks This Article on Chevron Doth Protest Too Much In the aftermath of #SCOTUS’ overturning #Chevron, the papers are filled with the “sky is falling” articles that predict dire results. This article, for instance, breathlessly tells the anxious reader that the Supremes have put “countless regulations” in “jeopardy”. Hyperbole much? The article actually references, by my count, 29 areas of purported concern—a number that, even if we accept it, is certainly not insignificant, but something a shade short of “countless”. Even the areas it mentions don’t particularly make the case well in many instances. One of the cited and most stressed, for instance, is the FTC’s proposed ban on #noncompetes. Though I am actually something of a fan of that proposal, the primary issue that it faces is not the level of deference #FTC might receive in its statutory interpretation, but whether the proposal represents such a sweeping departure from prior assertions of authority under the FTC Act that the proposal is a violation of the entirely separate “#majorquestions“ doctrine. That doctrine prohibits #agencies from resolving questions of “vast #economic and #political significance” without clear statutory authorization. It’s not a Chevron issue. A bunch of the other finite examples of the supposedly “countless” threats suffer similar failings. But the real problem with the suggestion that overruling Chevron places “countless regulations” at risk is that, if that were true, that would actually PROVE how ESSENTIAL it was to strike down Chevron. Let’s remember what Chevron held. It mandated that courts defer to agencies where a statute was ambiguous and the agency offered a “permissible” interpretation of the statute, but not really the “best” interpretation. If “countless” #regulations are “vulnerable” because Chevron has been overruled, then that would mean that #federalagencies have been systematically NOT choosing the best interpretations, instead preferring in “countless” cases INFERIOR interpretations. If that were the case, overturning Chevron would be essential to ensure that Congressional intent was not systematically manipulated by federal agencies. I don’t think that premise is correct and, as a consequence, I think that something far short of “countless” regulations will be affected by the demise of Chevron. Some #journalists, unfortunately, can be in the business of huffing and puffing to generate clicks. The sky is not falling, and this article is a disservice to its readers. https://lnkd.in/eaRTY7qk #administrativelaw CNN #clickbait #courts #judiciary #judicial #administrativestate #Biden #Trump
🔎 cnn ditigsl chevron - Google Search
google.com
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Can you believe two impossible things? That the increase in cited launch prices -median price of a newly launched drug in 2023 was $300,000 a year- have nothing to do with increases in Medicaid rebates and 340B. And so we can double down on more of the same with PDABs, Without consequence. If you do believe in it I would be interested to see your economic justification. (not a study because the lack of transparency, the lack of the a single drug metric and the complicated nature of the actors in the supply chain and payment mean studies are weak and confounded.) However I will point you to the literature on the Nixon wage and price controls. #PDABs #costshifting Note: “States that have established PDABs so far include Colorado, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Ohio, Oregon, and Washington.”
Can Individual States Effectively Cap Prescription Drug Costs?
medpagetoday.com
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Has the amyloid hypothesis reached the end of its rope? ☑️Axios reports (link at end) that there is a sense that the amyloid hypothesis has reached a limit. ” of January, there were 127 drugs being assessed in 164 clinical trials against Alzheimer's, according to a study published in an Alzheimer's-focused journal. Three-quarters aim to modify the disease versus treat its symptoms, and a quarter were in Phase 3.Less than a fifth of total drugs under development — and 22% of those in Phase 3 trials — target amyloid.” ☑️The article goes on to say that some believe the newest product just approved has effects so minimal that patients may not notice. (Ah percentages are the devil you know.) But Lilly still may make Billions. ☑️ Why is there such a mismatch between value and price? Please don’t say hope or to quote (better) critic, constant reader might frow up. Its the following: “pathologies affecting individuals’ identity have a distinctive significance in the perspective of valuing health in the sense that the ability to realize their identity by forming and pursuing goals and values is itself a constitutive aspect of well-being.” I see identity is the X factor in value like mortality. and the search continues because it must. link in comments https://lnkd.in/eygXFxuw
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Health Policy Regulatory and Legislative Expertise; Market Innovator
2moRandy Vogenberg, PhD Anna Kaltenboeck I received a couple of answers from OACT and updated this post