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THE CLIENT

A life sciences manufacturer was seeking approval for a new formulation of an existing drug and needed to better understand reimbursement issues facing this new formulation under Part B of the Medicare program.

BACKGROUND

The HMA Medicare team was asked to apply our subject matter expertise鈥攁nd access to Medicare claims information鈥攖o provide a fully formed picture of the reimbursement process for this new drug formulation. Our work involved researching other precedents and the implications of those precedents for the reimbursement of this new formulation, as well as the existing product.

APPROACH

HMA鈥檚 Medicare team has significant expertise in helping life sciences manufacturers understand and address the policy challenges affecting market access of new drugs and biologics. A key aspect of the Medicare鈥檚 team鈥檚 expertise is their ability to understand how various policies interact, causing unexpected outcomes. For this client, we helped educate various internal stakeholders on the pricing implications for their new formulation鈥攁nd its legal and regulatory issues that could cause the pricing for their new product to be blended with the prior version of the product, potentially creating access problems because of the required higher numbers of units for the new formulation. Our work was aided by research into local coverage documents by Medicare administrative contractors鈥攁nd analysis of claims data to provide evidence for the hypothesis that coverage for the new formulation could be available under Medicare Part B鈥檚 coverage of physician services, even though the prior formulation is covered under the pharmacy benefit.

RESULTS

Conventional wisdom in product development teams often paints an incorrect and outdated picture of the policy environment. HMA鈥檚 expert consultants can provide appropriate context to aid these teams in their planning as new products get closer to market, because of their work to monitor and understand up-to-the-minute changes to the policy landscape. Some reimbursement challenges can be mitigated or eliminated if they are addressed early enough in the development process for new technologies. Once certain approval pathways are set, it may no longer be possible for manufacturers to avoid a link between the prices of different formulations of a drug.

The HMA Medicare team was able to educate the client about Medicare鈥檚 intricate reimbursement rules, where the same drug, but a different formulation may be reimbursed under different rules. Rather than focusing on the various reimbursement silos, we provided a holistic view of the drug reimbursement landscape, so the client was able to understand that factors such as how many patients are able to self-administer the drug will affect the ultimate reimbursement for both the new and old formulation.

THE CLIENT

A major pharmaceutical manufacturer was preparing to launch a new oncology drug. This drug, a self-administered oral drug with a multi-week dosing regimen, was provided through the pharmacy benefit. The client was concerned about patients not being able to access the drug at hospitals and in post-acute care settings, where institutions received bundled payment for the care.

BACKGROUND

Bundled payment can serve as a disincentive to provide high-cost drugs, so the client was interested in pursuing reimbursement policy options that would ensure appropriate reimbursement to these facilities, thus ensuring patient access to the drug during the treatment regimen.

APPROACH

HMA helps physician associations, device manufacturers, and drug companies understand billing practices, reimbursement challenges, and patient outcomes, enabling them to make informed decisions.

For this analysis, the client wanted to learn about the likelihood that patients receiving their cancer treatment would be admitted to the hospital and then to other post-acute settings during the treatment window. Using our in-house library of Medicare claims data including claims for inpatient, outpatient, physician office, skilled nursing facility, home health, and other post-acute settings, we tracked patients with the specific cancer from diagnosis forward for several months. We were able to see how often patients were hospitalized, what prompted the hospitalization, how many were discharged for post-acute care, and how long treatment continued.

Our analysis provided data-driven insights that supported the client鈥檚 strategic decision-making and planning. Using the information from our claims analysis and overlaying the typical treatment regimen under the new cancer drug, the client was able to determine where their patients might face barriers to treatment. For example, most drugs provided in the inpatient setting are bundled into the payment the hospital receives, giving hospitals a disincentive to provide higher cost drugs. While the number of patients receiving their drug that would likely be admitted to the hospital during the treatment period was not high, the company wanted to remove as many barriers to access as possible, and is now considering pursuing a new technology add-on payment (NTAP) for the drug when used in the inpatient setting. The claims analysis also found that some of the cancer patients of interest receive home health care during the treatment window, but since patients are able to continue to receive drugs through their pharmacy benefit while also receiving home health care, the patients would be able to continue their oncology treatment. The patient journey analysis allowed the company to focus attention on settings where access could potentially be disrupted, to ensure that patients are able to continue their cancer treatment.

RESULTS

We identified patients with this specific type of cancer and tracked these patients to see how often they accessed different care settings and identified any potential reimbursement challenges. We further analyzed the volume of patients of interest receiving care in each setting and calculated the average cost per user within the approximate dosing regimen. This allowed us to identify any reimbursement risks for the drug associated with each care setting. Armed with concrete information on the treatment path of these oncology patients, the client was able to make an informed decision about whether to pursue an NTAP for inpatient use of their drug. The company was also able to educate providers and patients providing information on both the benefits of the new treatment, and the reimbursement scenarios in the various care settings.

THE CLIENT

A coalition of CAR T manufacturers and their trade association joined together to advocate for appropriate reimbursement of Chimeric Antigen Receptor T-cell (CAR T) therapies. They requested that policy options be developed by non-partisan experts that would best benefit the industry making the drugs, Medicare and Medicaid programs paying for the treatments, and the Medicare beneficiaries receiving these transformative therapies.

BACKGROUND

CAR T therapies first entered the market in late 2018. These transformative treatments for certain types of cancer involve modifying a patient鈥檚 own cells to fight the cancer鈥攑roducing a long term, potentially curative response. Initially, CAR T therapy was administered to patients in the inpatient hospital, where Medicare payments are bundled so that the hospital gets a single payment for the entire hospital stay. The cost of the CAR T therapy greatly exceeded the payment rate the hospital would receive, leading to concerns that hospitals would be reluctant to provide CAR T.

APPROACH

The emergence of CAR Ts represented a new reimbursement problem that required very careful consideration because these new treatments were just the beginning of a series of new, expensive, but essentially curative treatments. Solving the CAR T problem would have implications for the future, as other new therapies entered the market. Finding the right solution involved a real rethinking of the inpatient payment system. The client had to recognize how CAR T cases were similar to past precedents 鈥� and how some key differences about these cases required fundamental changes to how these cases are paid. Solving CAR T access and reimbursement issues required different types of expertise and approaches. The client needed a very deep understanding of the intricacies of the payment system, as well as a broad view of the policy landscape to find the right balanced response.

The HMA Medicare team had two vital sets of skills that were necessary for the work. First, we have an in-house library of Medicare claims and the data analysis skills needed to use the data to answer policy questions. This includes our model of the Inpatient Prospective Payment System (IPPS) rate setting and payment methodologies, so we could model the policies as they stood, as well as alternative policies to explore which options maximized the goals of the coalition members while minimizing negative outcomes. Second, we have a deep understanding of the policy issues at play, the history of the policy space, and the understanding of the interplay between many policy factors.

HMA worked with the coalition to monitor Medicare claims to get an accurate picture of the hospitals performing CAR T therapy and the payments they were receiving. We also explored how potential changes to the IPPS could provide better reimbursement for CAR T cases. Using our expert-level understanding of the intricacies of the payment methodology, we modeled many different policies to pinpoint the option that would balance the need for more appropriate payments with the needs of the rest of the system鈥攗nderstanding that there was a pipeline of additional CAR T therapies poised to enter the market in the coming years. This process also involved communicating with the policymakers at the Centers for Medicare and Medicaid Services (CMS) to ensure that the policies being advanced were politically viable and sustainable.

RESULTS

The work culminated in the creation of a new payment category for CAR T cases, with changes to the typical rate setting and payment methodology to account for both clinical trial and non-clinical trial cases. In addition, the work of the coalition prompted CMS to increase payments in the New Technology Add-on Payment program for all products, not just CAR T therapies. As a result, patient access to CAR T therapies has been maintained, and CMS has a framework to work from as new cell and gene therapies become available to Medicare patients. We have seen the volume of CAR T claims increase more than 9-fold over the 6 years the therapies have been available.

At the urging of the CAR T coalition and other stakeholders, CMS created a new MS-DRG (payment category) for CAR T claims, bumping the base payment rate for the cases from ~$40,000 to ~$240,000. In addition, NTAP payments increased from a maximum of 50% of the cost of the product to 65% of the cost of the product鈥攖his applies for all NTAP eligible claims, not just CAR Ts.

This work involved years of analysis and collaboration that is continuing. While inpatient reimbursement has improved, concerns are arising now around access to CAR T in the community setting.