COA Takes Aim at PBMs in 2017

Tony Hagen @oncobiz
Published: Thursday, Jan 19, 2017
Ted Okon

Ted Okon

The Community Oncology Alliance (COA) got most of its 2016 Christmas list. CVS Caremark dropped its plan to cut physician-owned dispensaries out of Medicare Part D oral drug distribution, CMS eased off the gas pedal on the Medicare Access and CHIP Reauthorization Act, and the Medicare Part B Drug Payment Model has been discontinued for now. COA’s Capitol Hill agenda in 2017 is to consolidate these gains with some ambitious new initiatives, Ted Okon, executive director of COA, said in a year-end review.

The group hopes to influence Medicare payment so that oncology practices can earn "fair reimbursement" on treatment. Okon said the automatic “sequester” cuts that took a percentage off the top on Medicare drug payments will be a prime target. COA blames the sequester for making it harder for practices to stay independent and in business. COA will also try to spur reform of the 340B Drug Discount Program, which is blamed for disproportionately high drug payments to hospitals, to the disadvantage of independents. “There are significant disparities for what Medicare pays in the hospital setting both for standard services and reimbursement,” Okon said. “We’re going to be calling more attention to that and getting the situation fixed.”

Although the Oncology Care Model has won approval from COA, it needs refinement with respect to physician payment, and this also will be a lobbying focus in 2017, Okon said. In addition, the oncology group is determined to chip away at the power over drug prices and access that is wielded by just a handful of large pharmacy benefit managers, such as CVS Caremark. “What’s come out in some of the [congressional] hearings is that there’s a growing split between the list prices of drugs and what the drugs actually cost. That’s because you have a lot of rebates and discounts in the middle that are widening that split, and I think part of that is happening on the pharmacy benefit manager side,” Okon said.

Reflecting on 2016 and the battles in Washington DC, over cancer care policy, Okon stated that the Center for Medicare & Medicaid Innovation (CMMI), established by the Affordable Care Act as a reform arm of CMS, is now in “jeopardy” particularly because of the failure of the Medicare Part B Drug Payment Model, which originated from CMMI.

He described the payment model as a transparent attempt by the Democratic administration to implement widespread Medicare payment reductions under the guise of an experiment. That much was clear from the scale of the model—all Part B providers would have been part of the model—and the fact that the physician community was not invited to participate in the planning, Okon said. “The Part B model was air-dropped in with literally no stakeholder input. The administration tried to abuse the powers of CMMI to push through a separate agenda. I think everybody saw through that.”

If US Rep Tom Price, MD, (R, Georgia) gains confirmation as secretary of the Department of Health and Human Services (HHS), this could lead to the possible dismantling of CMMI, as Price was the lead signatory on a September letter to CMS calling for discontinuance of all activities at CMMI. COA has endorsed Price for appointment as HHS secretary. Okon said that Price understands the needs of the medical community and has demonstrated his empathy in many statements and actions as a public official.

Price, a conservative with a stated preference for less government involvement in medicine and insurance policies, has said he favors a rollback on certain Affordable Care Act provisions that guarantee coverage. For these reasons, Price is a controversial pick for secretary of the HHS. “Obviously, we’re very concerned about doing away with the prohibitions on preexisting conditions and annual caps and lifetime caps,” Okon said. “They’re very important in the cancer space.” Still, he said, Price deserves “a chance. He’s been very responsive on issues relating to physicians and patients.”

In December, Jeffrey Vacirca, MD, was elected president of COA. Vacirca is CEO of New York Cancer Specialists in Long Island. He will serve for a one-year term that began on January 1.

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