TRP Health Policy Report (6/1)

Capitol Hill Update

Senators will return from their Memorial Day district work period this week to a jam-packed agenda for the month of June. In addition to a consideration of presidential nominations, Senate Majority Leader Mitch McConnell (R-KY) stated that the upper chamber will work on the fiscal year (FY) 2021 National Defense Authorization Act (NDAA), as a well as a bill that would permanently fund the Land and Water Conservation Fund while also addressing billions of dollars in national park backlogs. The Senate is also likely to take up Paycheck Protection Program (PPP) reform legislation at some point in the near future, but whether it takes action on additional COVID-19 relief this month remains to be seen.

Meanwhile, Majority Leader Steny Hoyer (D-MD) announced that there will be no votes in the House this week. Democratic leadership has issued an updated legislative calendar for the balance of the 116th Congress, lining up the months of June, July, and September with “Committee Work Days” to address key must-pass legislative priorities and additional COVID-19 relief. While no votes are currently on the schedule for the next few weeks, members will receive 72-hours’ notice of any changes to the lower chamber’s schedule.

Part D Plans Lower Insulin Copays as Part of New CMS Senior Savings Model

Last Tuesday, the Centers for Medicare and Medicaid Services (CMS) announced that it received over 1,750 applications to participate in its Senior Savings Model, inclusive of standalone Part D prescription drug plans (PDP) and Medicare Advantage-Prescription Drug plans (MA-PD). The Senior Savings Model, announced at the beginning of March, would give Part D sponsors the ability to offer a maximum $35 copay on formulary insulins throughout the benefit. TRP’s memo on the Senior Savings Model can be read here. CMS estimates that beneficiaries who use insulin and get covered by a participant plan would see average out-of-pocket (OOP) savings of $446 — reducing the current average annual OOP cost for insulin from $675 to $229.

While beneficiaries with participating plans would see lower OOP costs for insulin, the model would not directly address concerns over pricing elsewhere in the supply chain, however. The model gives plans the ability to avoid taking on manufacturer responsibility in the Part D coverage gap while offering lower copays, thereby making lower copays more attractive to plan sponsors. This new approach will not necessarily impact the list price of insulin or any negotiated discounts, however, possibly creating upward pressure on premiums. Such a strategy — reducing OOP costs while skirting pricing issues more broadly — has become more commonplace, such as in the House of Representatives’ recently-passed HEROES Act (H.R. 6800), which would require coverage of COVID-19 vaccines and therapies with zero copay but would not otherwise address pricing.

In plan year 2020, there were 959 standalone Part D prescription drug plans (PDP) and 3,970 Medicare Advantage plans with prescription drug coverage (MA-PD), for a total of 4,929 plans. Assuming a stable number of total plans, close to 40 percent of plans would be Senior Savings Model participants and roughly a third of Medicare beneficiaries have diabetes. Plan sponsors that applied to participate in the Senior Savings Model must submit their plan benefits for 2021 to CMS by June 1, 2020, designating their participation in the Senior Savings Model. Beneficiaries will be able to see participation in the Senior Savings Model — and therefore capped monthly OOP costs for insulin — on the Medicare Plan Finder tool. Open enrollment for Part D plans begins October 15, 2020.

White House to Push for Surprise Billing in ‘Cares 2.0’

Reports out of the Trump administration suggest that the White House will push for action on surprise medical bills ahead of the next round of COVID-19 relief legislation. The push comes amid concerns that rising unemployment and the buckling economy will exacerbate surprise billing, and the White House is reportedly pursuing a ban of surprise medical bills outright instead of stipulating who pays for services provided by out-of-network doctors. Past proposals have called for protecting patients from surprise bills but would not have banned the practice altogether.

Previous surprise billing legislation has been thwarted by opposition from insurers and physicians and disagreement over how best to settle reimbursement for out-of-network charges. During the CARES Act negotiations, Chairman Frank Pallone (D-NJ) and Senate Health, Education, Labor, and Pensions (HELP) Chairman Lamar Alexander (R-TN) were actively trying to tack their surprise billing legislation onto the package. Chairman Alexander has recently re-iterated support for his proposal, stating that the “best way to end surprise billing is for the White House to support the bipartisan, bicameral solution already agreed to.”

FDA’s Janet Woodcock to Oversee Administration’s COVID-19 Vaccine Efforts

It was recently announced that longtime Food and Drug Administration (FDA) division head Janet Woodcock was tapped to head the administration’s “Operation Warp Speed.” She will temporarily step aside as Director of the FDA’s Center for Drug Evaluation and Research to work solely on the push to accelerate COVID-19 vaccine development by the end of the calendar year. Health stakeholders had previously raised concerns about how an FDA official could review the safety and efficacy of a potential COVID-19 vaccine impartially while also working to speed the approval process. The FDA’s Deputy Director, Patrizia Cavazzoni, will serve in Dr. Woodcock’s place while she leads Operation Warp Speed. Additionally, Peter Marks, Director of FDA’s Center for Biologics Evaluation and Research, will no longer join the Warp Speed team as previously announced.