Life Sciences

Medicare & Reimbursement Advisor Weekly, June 17th, 2009

Medicare & Reimbursement Advisor Weekly, June 17, 2009

Inside:

Specialty: UK group continues to influence local managed care discussions

‘Similarly effective’ could be new standard in Medicaid

C-suite group offers payment reform idea

High OOP likely behind decline-to-fill rates for MS



Specialty: UK group continues to influence local managed care discussions

The National Institute for Health and Clinical Excellence (NICE) continues to be an important resource for U.S. managed care, particularly in the specialty pharmacy and oncology arena. This year, the UK government organization approved Revlimid for multiple myeloma (with the condition that Celgene meets the cost of therapy after 26 cycles), and Sutent for kidney cancer, but Alimta was not approved. In recent MRAW editions, we have discussed the role of NICE in managed care decisions. Future issues will include interviews with your plan customers about their views on NICE.

Here is a short list (below) of upcoming guidelines NICE is expected to release in the next 12 months.



‘Similarly effective’ could be new standard in Medicaid

State policy likely to affect treatment decisions

Medications that are similarly effective will be preferred for Connecticut Medicaid’s nearly 1 million residents in 2010, under a plan by the state to control spending. The move means patients and families will be given similarly effective drugs, not those deemed equally effective to treat a person’s condition. For example, a woman who’s been tolerating Lipitor or atorvastatin may have access only to simvastatin, the generic within the class, but one not therapeutically equivalent.

Other states are looking at various means to control Medicaid budgets.

In early June, we asked primary care physicians from 15 states, including Connecticut, if Medicaid policies for prescription medications affect their product decisions for treatment and by how much. We asked, “How likely is it for you to prescribe a drug based on what you write for your Medicaid patients?” On a scale of 1 to 10, with 1 equaling highly unlikely to affect product selection and 10 equaling highly likely, the average rating among 242 physicians was 7.84. Of the 242, 127 said Medicaid represented less than 25% of their practice, suggesting that the more restrictive the formulary, the more influence it has in therapeutic decisions since these practices are less able to challenge plan policies.

Of the 18 physicians from Connecticut, 14 provided a rating of 8 or higher.



C-suite group offers payment reform idea

A group of healthcare CEOs, including a representative from Merck, urged Congress June 12 to move ahead with reform plans to improve patient access to care, reduce cost growth, and enhance quality.

Among the proposals the group made were:

  • Switch Medicare fee-for-service payments with outcome-driven bundled payments
  • Hold higher-cost providers accountable to the cost, quality, and utilization standards reached by more efficient peers
  • Give providers a bundled payment, based on comprehensive services and shared risk
  • Regionalize high-cost, resource-intensive services under Medicare
  • Continue investments in quality infrastructure, including health information technology, decision-support tools, and comparative effectiveness research

The group, called Health CEOs for Health Reform, issued a white paper that focused on creating a new payment system that they said would reward high-quality care while discouraging fragmented low-value care.

Overall, “we do know how to deliver care differently,” said Nicholas Wolter, MD, of the Billings (MT) Clinic. With more physician-hospital organizations and other integrated approaches emerging, changes can occur, but it has to happen “fairly quickly because we do not have longer than five to 10 years to deal with what is truly becoming not just a healthcare burden, but a burden on our entire society.”

Other members of the CEO team are Bruce Bodaken, president, chair and CEO, Blue Shield of California; Lloyd Dean; president and CEO, Catholic Healthcare West; Kenneth C. Frazier, president, Global Human Health, Merck & Co. Inc.; Patricia A. Gabow, MD, CEO and medical director, Denver Health; Gary Kaplan, MD, chair and CEO, Virginia Mason Medical Center; Donna Katen Bahensky, president and CEO, University of Wisconsin Hospital and Clinics; and Anthony R. Tersigni, EdD, FACHE, president and CEO, Ascension Health.



High OOP likely behind decline-to-fill rates for MS

Formulary prescribing rates to be tracked

One in four multiple sclerosis (MS) patients are declining to fill their prescriptions, likely due to high out-of-pocket costs, according to research from Prime Therapeutics. The study found that patients with an out-of-pocket expense greater than $250 were seven times more likely to decline to fill their prescription than patients with an out-of-pocket cost of $100 or less. According to the study, the majority of individuals had an out-of-pocket expense of $150 or less and their decline-to-fill rate was 5.8%. For individuals with an out-of-pocket expense greater than $150, the decline-to-fill rate was 27%. MS specialty medications have a typical average wholesale price of $2,500 per month supply, or $30,000 annually, says Prime Therapeutics.

Formulary prescribing rates to be tracked

The California Public Employees’ Retirement System, Anthem Blue Cross, Medco Health Solutions, and Blue Shield of California have launched the state’s largest e-prescribing initiative to date. The pilot program will use input from participating physicians to determine the best ways to employ e-prescribing technology in their practices and by all prescribers. Program organizers will track results such as the number of identified preventable adverse drug events, use of e-prescribing, and generic drug and formulary prescribing rates.