Transcript Illustrative ACO 1

Don’t Miss Out on NASP’s
Fall Conference!
Impact of the Affordable Care Act on
Specialty Pharmacy
Moderator:
Jim Smeeding, RPh, MPA
Professional Affairs
NASP
Impact of the Affordable Care Act on
Specialty Pharmacy
Lauren Barnes
Senior Vice President
Avalere Health, LLC
Coverage Expansion and Delivery System Reforms Provided in
the ACA are Likely to Impact Specialty Pharmacy Business
Coverage Expansion
Medicaid
Expansion
Exchanges
Payment and
Delivery Reforms
Payment
Reforms
ACOs
New Eligibility Rules Will Increase Medicaid Enrollment by More Than 40 Percent in
Almost Half of States, Which Has Implications for Specialty Pharmacy
Coverage
Expansion
Percent Increase in Medicaid Enrollment as Compared to
Baseline Coverage Assuming All States Expand, 2022
WA
ME
MT
ND
OR
VT
MN
ID
WY
NV
WI
SD
IL
CO
CA
AZ
KS
OK
NM
TX
AK
PA
IA
HI
OH
IN
MO
WV
KY
AR
SC
AL
RI
NJ
DE
MD
DC
NC
TN
MS
VA
NH
MA
CT
MI
NE
UT
NY
GA
Percent Change
from 2022 Baseline
Medicaid Enrollment
≤ 20.0% (6)
LA
20.0% – 30.0% (8)
FL
30.1% – 40.0% (13)
40.1% – 50.0% (14)
≥ 50.1% (10)
Source: Avalere Enrollment Model, assumes all states expand Medicaid
Specialty Pharmacies Are Expected to Feel Increased Cost
Pressure with Reimbursement Changes
Coverage
Expansion
 State Medicaid programs have led movement away from AWP to AAC (examples below)
 These changes have adjusted ingredients costs and dispensing fees for pharmacies in Medicaid
» Ingredient Cost: Based on survey of invoices, does not include SPPs in survey
» Dispensing Fee: Based on review of the cost of dispensing, typically does not include SPPs
 While these new reimbursement formulas are not including SPPs in surveys, they do reimburse
SPPs using these metrics.
Alabama received CMS approval to
implement a reimbursement
methodology based on AAC in
September 2010
Oregon received CMS approval for a
similar plan to reimburse
pharmacies based on AAC in
January 2011
Idaho implemented AAC in September
2011
Louisiana implemented AAC
in September 2012
AAC = Average Acquisition Cost
AWP = Average Wholesale Price
CMS = Centers for Medicare & Medicaid Services
SPP = Specialty Pharmacy Provider
Approximately 18 Million Are Expected to Enroll in Subsidized Coverage Through
Exchanges, Which May Increase Pressures on Specialty Pharmacy to Control Costs
Coverage
Expansion
Enrollment in Subsidized Coverage, 2022
WA
ME
MT
ND
OR
VT
MN
ID
WY
NV
WI
SD
IL
CO
CA
AZ
KS
OK
NM
TX
AK
PA
IA
OH
IN
MO
WV
KY
AR
SC
AL
RI
NJ
DE
MD
DC
NC
TN
MS
VA
NH
MA
CT
MI
NE
UT
NY
GA
Enrollment in Subsidized
Coverage (2022)
≤ 150,000 (18)
LA
151,000-300,000 (14)
HI
Source:
Avalere Enrollment Model, assumes all states expand Medicaid
FL
301,000-450,000 (9)
≥ 451,000 (10)
Medicare Payment and Delivery Reform Programs Will Impact
Hospitals Over The Next Ten Years
Upside/Downside Risk
Payment and
Delivery Reform
ACOs2
Penalties Only
Bundled Payment for Care Improvement
Nonpayment
Baseline/Performance Period
Readmission Penalties for Low Performers
Hospital Acquired Conditions3
Hospital Inpatient Quality Reporting Program1
Hospital Outpatient Quality Reporting Program1
Hospital VBP4
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Private Payers are also engaging in a variety of payment and delivery reform
to curb growing costs and encourage value.
Source:
Centers for Medicare & Medicaid Services
ACO = Accountable Care Organization; VBP=Value-based Purchasing
2018
Payment Reform Forces Hospitals to Build New
Competencies, Which Could Alter Thinking about Drugs
Payment and
Delivery Reform
Hospitals will have to be able to:
Aggregate & Capture Data
Impact on
Health Systems
Reductions in
Payment
Work Closely with Physicians
Increase in
Transparency
Be Responsive to Different
Payment Models
Transfer of Risk
Select and Comply with a
Core Set of Clinical Guidelines
Changes in Volume/
Access
Focus on Costs
© Avalere Health LLC
Page 9
Identify Partners Who Can
Offer Integrated Solutions
Specialty Pharmacy’s Role within ACOs will Depend
Upon the Model and Structure of the ACO
Payment and
Delivery Reform
Illustrative ACO 3
Hospital
Illustrative ACO 2
Hospital
Illustrative ACO 1
MultiSpecialty
Group
Primary Care
Group
MultiSpecialty
Group
Primary Care
Group
MultiSpecialty
Group
Mental
Health
Facility
Post-Acute
Care Facility
Home Health
Payment reforms will shift clinical and financial risk downstream to providers.
Providers will need to broaden perspective of costs to account for the entire health
care system when making treatment decisions.
Adapted from Brookings Institution and Dartmouth Institute for Health Policy and Clinical Practice. “The Accountable
Care Organization (ACO) Learning Network,” October 6, 2009.
The Specialty Pharmacy Industry Has an Opportunity to
Define Their Role Within The Changing Market
Future Customer
Focus
Current Customer
Focus
SP
Hospital
MultiSpecialty
Group
Primary Care
Group
Hospital
SP
Primary Care
Group
MultiSpecialty
Group
Mental
Health
Facility
Post-Acute
Care Facility
Home Health
The changing environment will force providers to focus on broader
integration; Specialty Pharmacy can play a role in managing drugs
throughout this continuum of care.
Source:
Adapted from Brookings Institution and Dartmouth Institute for Health Policy and Clinical Practice. “The Accountable
Care Organization (ACO) Learning Network,” October 6, 2009.
Between the Medicare Shared Savings Program and
Pioneer ACOs, CMS Has Launched More than 250 ACOs
ACOs
States with Medicare ACOs
WA
(2)
ME
(4)
MT
(1)
OR
(2)
ID
(1)
ND
MN
(5)
SD
WY
(1)
UT
(1)
CA
(23)
CO
(2)
MI
(9)
IA
(7)
NE
(2)
NV
(3)
NY
(18)
WI
(7)
IN
(9)
IL
(8)
KS
(1)
MO
(4)
PA (3)
OH
(8)
WV
KY (7)
VA
(6)
VT
(2)
NH
MA
7
18
RI-2
CT-8
NJ
NJ -10
DE - 1
MD - 9
D.C. - 2
NC (6)
TN (7)
AZ
(8)
OK
(1)
NM
(3)
SC (3)
MS
(2)
TX
(16)
AK
AR
(3)
LA
(2)
AL
(1)
No Medicare ACOs
GA
(11)
FL
(32)
HI
2
PR
Source:
CMS Medicare Shared Savings Program website: http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/sharedsavingsprogram/index.html?redirect=/sharedsavingsprogram/
Note: MSSP and Pioneer ACOs often serve Medicare beneficiaries in more than one state. Since the numbers
embedded in the map capture this, they do not add up to equal the number of ACO entities approved by CMS through January1, 2013.
MSSP ACOs
Both MSSP and
Pioneer ACOs
Health Systems Across the Country Exhibit
Characteristics of ACOs
ACOs
WA
ME
MT
ND
VT
NH
MN
OR
WI
ID
MI
WY
PA
IA
NE
NV
IL
OH
IN
WV
UT
CA
MA
CT
NY
SD
CO
KS
MO
VA
RI
NJ
DE
MD
D.C.
KY
NC
TN
OK
AZ
NM
SC
AR
MS
TX
AK
AL
GA
LA
FL
HI
0
5-7
1
8-10
2
11+
3-4
Source:
Leavitt Partners Center for ACO Intelligence, “Growth and Dispersion of Accountable Care Organizations,” November 2011.
Numerous ACA Provisions in Effect,
But Major Changes Start in 2014
Provider Payment
Reductions
Prevention and Public
Health Fund
Expands 340B
Participation
Medicaid Drug Rebate
Increase
Extend Dependent
Coverage to 26 years
Coverage Expansion
of Preventive Services
Establish PatientCentered Outcomes
Research Institute
2010
Meaningful Use
Incentive Payments
Begin
Appeals and
Grievances
Requirements
MA Payments Frozen
Part D Coverage Gap
Closing Begins
Drug Manufacturer
Annual Fee
Center for Medicare
and Medicaid
Innovation
2011
Exchanges and Insurance Reforms
Medicare
Medicaid & 340B
Quality/Value Reforms
Financing
Other
HRRP Begins
Individual and Employer
Insurance Mandates Take
Effect in January 2014
Biosimilars
Part D MTM
Requirements Begin
Exchanges Begin
Operations
MA Quality
Payments Begin
MA RegionallyAdjusted
Benchmarks PhaseIn Begins
Medicare Shared
Savings Program
(ACOs)
2012
Announcement
of BPCI
participants
Medical Device
Excise Tax
VBP Program
Launches
2013
MA = Medicare Advantage
VBP = Value-based Purchasing
HRRP = Hospital Readmissions Reduction Program FPL = Federal Poverty Level
MTM = Medicare Therapy Management
CHIP = Children’s Health Insurance Program
ACO = Accountable Care Organization
ACA = Affordable Care Act
BPCI = Bundled Payment for Care Improvement Initiative
Essential Health Benefits
Package in Effect
Meaningful Use
Penalties Begin
Medicaid Maintenance of
Effort Requirements End
CHIP Reauthorization
Expires
Medicaid Expansion to
133% FPL
Independent Payment
Advisory Board
Recommendations
Effective
Health Insurer Fee
2014
2015
Panel Discussion
The intersection of business
strategy and public policy
Data, Metrics, and Reporting: What
Role will Specialty Pharmacy Play?
Brian Nightengale, RPh, PhD
President
Xcenda, AmerisourceBergen Consulting Services
Every major aspect of ACA assumes broad access to credible data and sufficient
stakeholder collaboration to ensure measurement and reporting
Questions Remain Regarding Impact on SP
•
Complex therapeutic areas may offer the best opportunities to demonstrate
quality and outcomes
•
But, will these low volume, yet expensive specialty therapeutics area be a big focus
out of the gate?
– If so, then SPs will likely play an increasingly collaborative role in
• Providing support for complex therapy management within the new coordinated care delivery
models
• Providing the necessary data typically required for specialty focused diseases
•
Will PCORI’s and other agencies priorities align with the market and/or be relevant
to Specialty Pharmacy?
– Currently many initial pilot programs focus on primary care or care delivery
•
What impact might CER have on the drugs SPs offer to customers?
– Either increasing or limiting access
– Changing contracts/rebates with manufacturers of drugs that did not perform well
under CER
Impact on Specialty Pharmacy
Payer reactions to the statement:
“Private payers will use CER data to require enrollees to pay some or all of the additional costs of more expensive
drugs, procedures, or technologies for which there is no evidence of superior effectiveness.”
N=43
March 2009 N=41
June 2008 N=68
How much do you agree with this statement?
March 2009, Amerisource Bergen’s Managed Care Network (MCN™) primary market research
Questions Remain Regarding Impact on SP
• Stakeholders will need to address care management and quality
improvement issues related to small patient populations
– Across specialty therapeutic areas, data needs and reporting requirements differ
significantly based on medical complexities
– Is there sufficient data and collaboration to effectively measure?
– Typical “population management” approaches may not apply
• What capital investments will be needed to address the increasing data
and reporting demands and who will pay?
Are Credible and Reliable Data Available?
Outcome Measures for Oncology
Outcome Measures for Rheumatoid Arthritis
1. EMD Serono. “EMD Serono Specialty Digest, 7th Edition. Managed Care Strategies for Specialty Pharmaceuticals ”
(Note: data represented in graphs was collected via an online survey of 93 health plans representing over 115 million lives).
Impact of ACA on Specialty
Pharmacy
Dean Erhardt, MBA
D2 Pharma Consulting, LLC
D2 Mission Statement
D2 is a Life Sciences consulting firm consisting of
accomplished industry personnel who provide hands
on expertise in all aspects of channel management.
We provide strategic and tactical commercialization expertise
to emerging and existing pharmaceutical,
biotech and specialty organizations focusing on the individuals
client’s defined business objectives.
Brief on Healthcare Reform
•
•
The good
– In theory fewer uninsured Americans should lead to a lower-cost health care
system
– No cap on benefits
– No Pre-existing conditions
– Kids stay on coverage through age 26
– “Free” preventive healthcare
The Bad
– Wrong incentives???
•
–
Increase healthcare costs
•
–
–
20 M people w/ incomes up to 400% FPL ($92K) to receive subsidies
Decisions in the hands of unelected bureaucrats
Various cross subsidies (transferring wealth w/o using the tax code)
•
•
Patients’ rights advocates have expressed that the model incentivizes providers to save money
by cutting corners in treatment
Young, healthy pay more to cross subsidize older, sicker
The Ugly?
– Expands power with the IRS – multiple new taxes
– 2700 pages of legislation yet to be defined
– Approx. 2000 “at the description of the Secretary”
Specialty Pharmacy Challenges
Confidential
25
The other driver of change…
How the FDA pipeline of specialty drugs will impact the
existing supply chain?
The Future of Specialty Pharmacy
•
Over 600 drugs in the specialty pharmaceutical pipeline
(phase II and phase III)
•
Close to 50% of drugs in the pipeline are oral drugs
•
Majority of drugs are for treatment of cancer
•
Specialty pharmacy today represents about 25% of
pharmacy spend but will increase to 40% of total spend
by 2015
•
Specialty pharmaceuticals will represent top selling
drugs by revenue by 2014
Sources




www.phrma.org
Medco 2011 Drug Trend Report
Bartholow M. Top 200 prescription drugs of 2009. Pharmacy Times website.
http://www.pharmacytimes.com/issue/pharmacy/2010/May2010/RxFocusTopDrugs-0510.
Confidential
27
27 27
Distribution Channels for Specialty Products
Supplier:
 Specialty Distributors
 Specialty Pharmacies
Supplier:
 Wholesaler
 Manufacturers
 Specialty Distributor
Supplier:
 Wholesalers
 Specialty Distributors
 Specialty Pharmacies
 Manufacturers
Supplier:
 Wholesalers
Source: HDMA Estimated 2011
 Specialty Distributors
Key Considerations
• How does a specialty pharmacy support patient
initiatives across an ACO?
• What are the data requirements necessary to support
reporting ACO initiatives?
• How/where does pharma (big/small) fit?
Potential Levers in SP Management
Medical Management
Network Management
Consumer Engagement
•
•
•
•
•
•
•
•
•
•
•
Referral mgmt
Utilization mgmt
Case management
Disease mgmt
Step therapy
Prior authorization
Retro review
•
•
•
•
•
•
•
Renegotiate contracts
Case rates/commodity
pricing
Risk sharing
(capitation, ACO)
Gainsharing
Incentives – reward
achievement of targets
Bundled payments
Site of service
differentials
Transparency
Direct care to Centers
of Excellence
•
•
•
•
•
•
Awareness campaign
Engagement (Health by
Choice)
Shared decision making
Benefit design
Tiered copays
Preferred networks
Education programs
(wellness)
Transparency – quality
& cost
THANK YOU…
How Will Specialty Pharmacy Evolve In A RiskSharing Environment?
A Pharmaceutical Industry Colleague
Perspective
Jeffrey A. Bourret, MS, RPh, FASHP
Senior Director, Medical Affairs
Medical Lead, Specialty & Payer Channel Customers
Pfizer Specialty Care
Specialty Pharmacy Evolution
• Ongoing development of core services
– Specialty therapy management
– Medication adherence (Achieving vs Improving)
– Cost management
Development of Enhanced Capabilities
1. Specialty therapy management expansion to therapy prescribed
for patient comorbidities for medical conditions targeted by
CMS and ACOs
2. Patient behavioral change
3. Health services research on effective strategies and tactics for
achieving medication adherence
4. Health outcomes research on impact of adherence on total
health care utilization and costs
5. Research on SPP impact on improving quality scores
6. Strategies to enhancing patient care experience
Specialty Pharmacy Evolution: Patient Support
• Specialty Therapy Management
– Patient education
– Telephonic adherence support
• Evolution
– Expanded role in patient , family and caregiver education
– Certification of patients on appropriate use of medication
– Data capture & integration with medical/pharmacy
– Generation of data on patient outcomes
Medicare Shared Savings Program Final Rule
• Quality measures and reporting
– CMS will score 23 quality measures in
calculating the performance standard,
spanning four equally weighted domains:
•
•
•
•
Patient/caregiver experience (7 measures)
Care coordination/patient safety (6 measures)
Preventive health (8 measures)
At-risk populations (12 measures)
• Specialty pharmacy can potentially
impact each core domain & could be
called on to play more active role
Finalized Measures Will Target High Impact Conditions
Most high impact conditions targeted by ACOs are
co-morbidities for patients with medical conditions
requiring specialty therapy
•
•
•
•
•
•
•
Diabetes
Heart failure
Coronary artery disease
Ischemic vascular disease
Hypertension
COPD
Tobacco use
•
•
•
•
•
•
Patient experience
Immunizations
Readmissions
Medication reconciliation
Use of EHRs
Screenings (cancer,
depression, fall risk, weight)
Comparative Effectiveness Research
Drug
Surgery
Device
Surgery
Drug
Device
Drug A
Drug B
An Option Ripe for Specialty Pharmacy Evolution
Drug (Limited
Support)
Drug + Enhanced Support
•
•
•
•
Patient education incentives
Medication use certification
Family & caregiver education
Patient self-reported assessments
of disease activity
• Patient satisfaction survey
• Health outcomes research
The Best Results Will Come From Effective Collaboration
Specialty
Pharmacy
Pharma
Companies
Doctors
Nurses
Pharmacists
Retail
Pharmacy
Patient
MCO
PBM
Impact of ACA on
Specialty Pharmacy
Presented by: Donald C. Balfour, M.D.
President and Medical Director
Sharp Rees-Stealy Medical Group
April 3, 2013
Sharp ACO Collaborations
• Commercial
PPO Patients
• Sharp
Community
Medical Group
(“SCMG”)
• Commercial
PPO Patients
• SCMG and
Sharp ReesStealy Medical
Group
(“SRSMG”)
• Pioneer ACO
• Medicare Feefor-Service
Beneficiaries
• Sharp
HealthCare,
SCMG, SRSMG
Goal of CMS ACO Program
CMS Shared Savings Program established in the
Patient Protection and Affordable Care Act
(“PPACA”) with the goal to provide:
1. Better care for individuals
2. Better health for populations
ThreePart 3. Lower growth in Medicare
expenditures
Aim
Pioneer ACO Footprint
Sharp HealthCare ACO
• Began January 1, 2012
• Collaboration between Sharp
HealthCare, SCMG and SRSMG
– All SRSMG physicians, most SCMG
physicians (includes Graybill),
and all Sharp hospitals
• 32,000 aligned beneficiaries
– 74% with SCMG
– 26% with SRSMG
What Have We Accomplished?
• Created
corporation
• Named
leadership team
• Developed
subcommittee
structure
• Established provider and supplier network
• Formed governing body, including consumer advocate
and patient representative
What Have We Learned?
• Identified Opportunities
– 63% of 2011 inpatient costs ($78 million) originate from the ED
– 51% of total Part A claims costs for 2011 ($123 million) are out-ofnetwork
– Skilled nursing bed days per 1,000 were 2,608 in 2011 compared to a
5% sample of Medicare fee-for-service beneficiaries in San Diego
County of 1,842 (42% higher)
• Medicare Advantage patients at 1,439 (81% higher)
– 150 beneficiaries had 5 or more ED visits in 2011 without a
corresponding admit (one beneficiary had 53)
– 100 beneficiaries had 5 or more hospital admits in 2011 (one
beneficiary had 17)
– 3.5% of beneficiaries generate 21% of Part A paid claims
Aim and Primary Drivers
Best Health, Best Care, Best Experience
Care Delivery Models
Care Coordination
Patient Engagement
Information Technology and Analytics
Alignment of Incentives
…………………………………………………………………………
…………………………………………………………………………
Years One and Two
Billing
• Providers bill normally and receive standard feefor-service payments
Comparison
• Total cost of care for ACO beneficiaries is
compared to a benchmark based on historical
costs of the aligned population
Bonus
• If total expenses are less than target, and if
quality metrics are achieved, a portion of the
savings is returned to the ACO
Distribution
• The ACO is responsible for dividing the savings
among ACO participants
Year Three
Payment
Option
• Must achieve quality targets as well as a
minimum 2% annual savings in years one
and two to receive population-based
payments in year three
CMMI’s AIM is that 100% of Pioneer ACOs
generate sufficient cost savings and quality
improvements to qualify for populationbased payments in year three
Best Health,
Best Care,
Best Experience
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