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August 2024
In this issue we feature:
LUGPA's Holds Second DC Fly-In in July
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In late July, LUGPA held its second DC Fly-In of the year, bringing together members in Washington, DC, to advocate for crucial healthcare reforms outlined in the 2024 Legislative and Regulatory Agenda. Despite the challenges of a turbulent political climate and heightened security measures due to the presidential election and the visit of Israeli Prime Minister Benjamin Netanyahu, our members effectively engaged with key policymakers through a mix of in-person and virtual meetings.
Key Issues Discussed:
- Seniors Access to Critical Medications Act (HR 5526/S. 3458): Advocated for legislation to enable physician practices to deliver Part D drugs to Medicare beneficiaries' homes, enhancing patient care and coordination.
- Physician Reimbursement and MACRA Reform: Our members emphasized the need for sustainable reimbursement amidst Medicare payment cuts and the bureaucratic burdens of MACRA, highlighting the threats these pose to independent practices.
- 340B Program Reforms: We urged for transparency and stronger eligibility criteria to ensure the program benefits low-income patients and addresses misuse by large hospital systems.
- Site Neutrality: Promoted reforms to ensure equal Medicare reimbursement for services, regardless of setting, to prevent hospital consolidation and reduce healthcare costs.
- Protecting Patient Access to Cancer Therapies (HR 5391/S. 2764): Supported legislation to preserve physician reimbursement for Part B drugs threatened by the Inflation Reduction Act.
Our members met with representatives and staff from key committees, including Energy and Commerce, Ways and Means, and Finance,
Impact and Next Steps:
- Legislative Progress: The Seniors Access to Critical Medications Act has advanced out of the Energy and Commerce Committee and awaits a House floor vote.
- Future Considerations: Continued advocacy for pending legislation crucial to healthcare reform, aiming for inclusion in year-end healthcare packages.
LUGPA's July DC Fly-In highlighted the power of advocacy in shaping healthcare policy. We urge all members to participate in future fly-ins to ensure the voice of independent practices is heard. For more information or to join an upcoming fly-in, please get in touch with Matthew Glans at [email protected].
CMS Introduces Cuts to Medicare Physician Fee Schedule Conversion Factor, Again
On July 10, the Centers for Medicare and Medicaid Services (CMS) released its proposed rule for the 2025 Medicare Physician Fee Schedule (MPFS), which includes significant cuts to physician reimbursements for treating Medicare patients. The proposed 2025 conversion factor is $32.36, representing a 2.8% decrease from 2024.
The conversion factor is a critical component of the MPFS; due to the legal requirement for Medicare programs to maintain budget neutrality, any increase in reimbursement for one service necessitates a decrease for another. LUGPA and physician advocates across the country have long campaigned for an update to this policy, arguing that it fails to keep pace with the rising operational costs faced by medical groups.
With 92% of medical groups reporting increased operating costs and struggling to remain financially viable, these proposed cuts are critically shortsighted.
The PFS conversion factor decreased by $3.73 from 2020 to the proposed 2025, representing a percentage decrease of approximately 10.33%. In the same interval, average inflation increased costs by approximately 20%. A physician pay cut, amplified not only by inflation but also in the context of previous cuts, can only amplify the trend of physicians into retirement or employment.
Members seeking to understand the effects of these cuts should consider using LUPGA’s Medicare Physician Fee Schedule Calculator. This tool is tailored for LUGPA practices and aims to streamline the evaluation of financial impacts linked to the 2024 Medicare Physician Fee Schedule (PFS) based on each practice's unique patterns. This Microsoft Excel tool includes pre-programmed calculations and schedules, facilitating straightforward comparisons of Medicare reimbursement changes using historical practice volumes. By projecting reimbursement outcomes aligned with updated PFS data, the calculator empowers practices to make informed financial decisions effectively.
LUGPA has consistently urged Congress to implement stable payment updates that accurately reflect the costs of healthcare practice. In response to the proposed rule, LUGPA will collaborate with lobbyists and aligned stakeholders over the coming weeks and months to develop and submit comprehensive commentary to CMS. We also covered these issues directly with lawmakers during our Washington, DC, fly-in to advocate for reconsidering and modifying the final rule.
LUGPA Sends Comments to Senate Finance Committee on Medicare Payment Reform
In July, LUGPA sent detailed commentary to Chairman Wyden and Ranking Member Crapo Senate Finance Committee regarding the white paper addressing challenges in Medicare Part B. The commentary highlights critical concerns and offers specific recommendations to bolster the healthcare system, particularly for chronic care patients. Here are the key points:
1. Physician Fee Schedule Cuts: The CY 2025 Physician Fee Schedule proposes a 2.8% reduction in reimbursement, exacerbating the financial strain on physician practices. These cuts and inflationary pressures threaten the viability of independent practices, especially in rural and underserved areas.
2. Disparities in Payment Updates: Medicare's policy of providing more substantial payment updates to large hospital systems while cutting physician reimbursements creates an unsustainable imbalance. This disparity drives independent practices to shut down, merge, or be acquired by hospitals.
3. Call for Reform:
- Reform Payment Updates: Eliminate pending cuts and implement a methodology that reflects the actual costs of care.
- Promote PFPMs: Reform the PTAC to involve independent physicians in developing and reviewing APMs and require CMS to pilot-test PTAC-approved APMs.
- Repeal and Reform MIPS: Eliminate the zero-sum game in MIPS and replace it with a system that rewards quality and value without penalizing other physicians.
- Site-Neutral Payments: Move towards site-neutral payments for physician-administered drugs and outpatient procedures, using savings to finance physician payment reform.
- Stark and Anti-Kickback Reforms: Codify recent administrative reforms to encourage value-based care models and amend underlying statutes to facilitate payment arrangements promoting value-based care.
4. Specific Recommendations:
- Block CY 2025 Cuts: Congress should act immediately to block the proposed cuts and replace the current payment system with updates based on the Medicare Economic Index.
- Pilot-Testing APMs: Require CMS to pilot-test PTAC-approved APMs in diverse geographic areas and patient populations.
- Stabilize MIPS: Reauthorize and expand the $500 million exceptional performance bonus and eliminate the budget-neutral provisions.
- Achieve Site Neutrality: Ensure payment parity between hospital and physician office settings for identical services.
- Amend Stark Law: Provide statutory amendments to Stark law to allow for innovative payment arrangements.
In the comments, LUGPA emphasized the need for immediate and substantial reforms to protect the future of independent physician practices and improve patient care. We are committed to working with Congress to implement these changes and ensure a sustainable and equitable healthcare system.
Community Practice Coalition Urges Congress to Halt Medicare Payment Cuts
In a new letter being sent to Congress in early August, the Community Practice Coalition will call on Congress to eliminate the proposed 2.8% cut to the Medicare Physician Fee Schedule (MPFS) and to consider reforms for a more stable and predictable payment system that reflects the actual costs of care. These cuts follow years of reductions, totaling nearly 10% over the past four years, while the cost of providing healthcare in communities continues to rise. This has created an unsustainable financial environment for community-based healthcare practices, particularly in rural and underserved areas.
The coalition's key recommendations to Congress include:
- Eliminating Pending Cuts: Remove the proposed reductions in the Medicare Conversion Factor.
- Reflecting Actual Costs: Implement a payment system based on the Medicare Economic Index (MEI) for reliable updates.
- Promoting Community-Focused Payment Models: Reform PTAC to include community providers in APM development, mandate CMS to pilot PTAC-approved APMs, and encourage CMMI to adopt community-focused models.
- Revising MIPS and Quality Metrics: Eliminate the zero-sum nature of MIPS, reward high-performing practices, and develop meaningful, specialty-specific quality measures.
- Achieving Site-Neutral Payments: Equalize payments between hospitals and community practices for the same services to ensure equitable reimbursement.
- Supporting Administrative Reforms: Codify and expand reforms to Stark and Anti-Kickback laws, promoting innovative, value-based care models.
The coalition stresses that these reforms are essential to maintain the financial stability of community practices, prevent further consolidation of healthcare services into higher-cost hospital settings, and ensure equitable access to high-quality care for all Americans.
LUGPA Joins Coalition Effort to Promote Safe Step Act
In July, LUGPA and our social media team joined the Ad Hoc Safe Step Act Coalition to advocate for policies that ensure timely patient access to necessary medications without payer-mandated delays.
Step therapy often undermines the patient- and physician-developed treatment plan, leading to treatment delays, higher out-of-pocket expenses, and decreased quality of life.
Recent studies highlight the dangers of step therapy, including forced drug switching and treatment gaps, which can cause adverse effects and worsen health outcomes. For example, a 2019 AmerisourceBergen study revealed that step therapy can result in negative immune responses and disease flares. A 2021 review found that over 90% of insured Americans may face obstacles in accessing their prescribed treatments. Furthermore, a 2020 Avalere study showed that step therapy increased payer costs by 37% for Crohn’s Disease treatment.
LUGPA remains particularly concerned about CMS's 2019 decision to end the prohibition of step therapy for Medicare Part B drugs. We continue to advocate for the reinstatement of this ban, emphasizing the burdensome nature of fail-first protocols on patient care.
PBM Update: House Oversight Committee Hearing on Pharmacy Benefit Managers
On July 23rd, the House Oversight Committee convened a hearing titled “The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part III: Transparency and Accountability.” The Committee heard testimony from representatives of the three leading PBMs, CVS Caremark, OptumRx, and Express Scripts, focusing on how their practices influence drug prices and the overall market. LUGPA’s DC team attended the hearings and reported what was discussed.
The majority of the Committee members strongly condemned the actions of PBMs. Key issues discussed included rebate pass-throughs, Group Purchasing Organizations (GPOs), step therapy requirements, and price negotiation tactics. PBM representatives attributed rising costs to the list prices set by drug manufacturers, asserting that their clients receive between 98% and 100% of all rebates.
Most of the hearing addressed the relationship between PBMs and independent pharmacies. Committee members questioned whether PBMs are driving independent pharmacies out of business and if they favor their in-network pharmacies.
Additionally, the Committee released a report on PBMs, revealing several key findings:
- PBMs share patient information across integrated companies to steer patients to PBM-owned pharmacies, which is anti-competitive.
- PBMs claim to save patients and payers money, but the Committee found instances of PBMs using opaque pricing schemes to overcharge plans and payers.
- PBMs often place higher-cost medications in favorable formulary positions despite the availability of lower-cost, equally effective alternatives.
- PBMs use prior authorization, fail-first policies, and formulary manipulation to hinder the uptake of cheaper generics and biosimilars.
- PBMs have overcharged or withheld rebates/fees from taxpayer-funded programs and steered patients to their own pharmacies, reducing patient choice and increasing taxpayer costs.
- The report also discusses the implications of the Inflation Reduction Act (IRA), suggesting that price negotiation may lead to higher launch prices for new medications and reduced R&D investments.
CMS Finalizes Medicare Prescription Payment Plan Guidance
In July, The Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), released the final part two guidance for the Medicare Prescription Payment Plan, in line with the Inflation Reduction Act. This initiative aims to reduce high upfront out-of-pocket prescription drug costs for Medicare beneficiaries.
Starting in 2025, Medicare recipients will have the option to spread their prescription drug costs over the calendar year rather than paying the full amount at the pharmacy counter each time. Beneficiaries must opt into the plan to take advantage of this new benefit. Additionally, annual out-of-pocket prescription drug costs for all Medicare beneficiaries will be capped at $2,000.
The guidance complements CMS' upcoming national education and outreach efforts to engage Part D plans, pharmacies, providers, drug manufacturers, and beneficiary advocates. This initiative seeks to provide the necessary support and materials to educate those who may benefit from the program.
For additional information, you can view CMS’s fact sheet here: https://www.cms.gov/files/document/fact-sheet-medicare-prescription-payment-plan-final-part-two-guidance.pdf.
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