Informa Connect Hub West 2022 Post-Conference Brief: Legal, Regulatory, and Standards Highlights

The 2022 Informa Connect Hub West conference included several presentations focused on the legal, regulatory, and standards issues impacting medication access and adherence. We are pleased to provide the following highlights from those presentations.

Transparency, Drug Coverage, and Pricing – Part D, Medicaid, and the Future

Joel White, Founder and President at Horizon Government Affairs

Joel spent 12 years on Capitol Hill writing Medicare laws, including the creation of the Part D benefit, but focused his talk on 4 specific topics related to current events and the future.

Topic 1: The Inflation Reduction Act of 2022 (IRA)

Joel highlighted specific provisions of the act focused on health care. For example, it extends premium subsidies that lower the cost of health insurance as part of the Affordable Care Act, it includes a Medicare Part D redesign that will improve coverage and (hopefully) adherence, allows Medicare to negotiate the price of certain prescription drugs, demands rebates from manufacturers of drugs that increase prices faster than inflation, caps Part D patient out-of-pocket costs, and more.

In short, the Part D redesign has the potential to provide significant savings to patients. First, it caps premium increases at 6% per year, caps out-of-pocket costs for insulin, and caps Part D patient out-of-pocket costs at $2000/year. Many manufacturers will also see a reduction of their financial risk in the Part D redesign. But the Part D plan providers will see their share of Part D financial responsibility and risk increase significantly. As a result, Joel expects to see increased Part D premiums and more aggressive tactics by the plans to manage this increased risk. These tactics may include increased drug utilization review, prior authorizations, step therapy, etc.

Joel identified a range of downstream implications of the Inflation Reduction Act:

1. Fewer products and higher launch prices (but more biologics and biosimilars)
2. Better coverage, more adherence, but higher costs and less choice
3. Further scrutiny of PBM and manufacturer practices
4. Downstream impact of manufacturer price controls (e.g., margin compression, spillover to commercial markets)

Furthermore, he warned that the US Congress does not consider the IRA a one-and-done decision. On the contrary, Congress members from both sides of the aisle will continue to push for additional steps to reduce drug prices. These could include scrutiny of plan practices (accumulators and maximizers) and identifying ways to apply the IRA control structure to employer markets (commercial insurance). Importantly, Joel outlined 4 key areas where he anticipates ongoing challenges to the law’s implementation:

1. Legal
   1. Expect legal challenges focused on constitutional and process issues
2. Regulatory
   1. Aggressive implementation timeline
   2. Reliance on “program guidance” rather than normal rule-making
3. Legislative
   1. Chip away at IRA through minor reforms
   2. Repeal and replace?
   3. Expand law to generate more savings
4. Political
   1. How will this impact races? Control of Congress?

Topic 2: Recent Regulatory Events Surrounding Payers’ Use of Copay Accumulator Programs

The bottom line here is that in the 2021 Notice of Benefit and Payment Parameters, HHS has essentially left the decision regarding the use of accumulators for any product — even those that have no medically appropriate generic alternative — up to payers. Further, they said that they didn’t expect much growth in the use of accumulators. However, the data shows ongoing expansion of the use of both accumulator and maximizer programs. A group of patient support organizations has filed a lawsuit against HHS challenging this rule, making 3 key arguments:

1. The law cannot allow each regulated entity to determine what the law means
2. This violates the ACA’s cost-sharing rules, specifically the maximum out-of-pocket cost limit
3. The insurers collect more from the manufacturer and patient than the law allows

Topic 3: Final CMS Rule Ending PBMs’ Retroactive Direct and Indirect Remuneration (DIR) Fees

Beginning in 2024, the rule requires that DIR fees be reflected in the negotiated price the patient pays at the pharmacy counter. This creates greater transparency for patients and pharmacies. The rule defines “negotiated price” as the lowest amount a pharmacy could receive as reimbursement for a drug under its contract with the plan.

Topic 4: New Technology-Based Solutions That Help Patients Access Life-Saving Medicines

Joel specifically called out 2 technologies that have significant potential to benefit drug access. First, he noted recent legislative and regulatory activity boosting the use of electronic prior authorization (ePA), including ePA provisions of the Support Act. Second, he called out the inclusion in the Consolidated Appropriations Act passed in December 2020 of a federal provision mandating real-time benefit tools (RTBT) utilization in Part D for both providers and patients. Specific regulations are expected in FY2023. Also, CMS included a beneficiary RTBT requirement for Part D plans in a final rule that takes effect in January 2023.

Joel closed by calling for a comprehensive approach that solves all access problems for manufacturers, providers, and patients.

Enforcement Priorities and Emerging Areas of Focus Regarding Cost-Sharing and Patient Assistance and Support Programs

Charlene Keller Fullmer, Assistant U.S. Attorney and Deputy Chief, Affirmative Litigation at U.S. Attorney’s Office Eastern District of Pennsylvania

Joe Mack, Senior Assistant General Counsel, Compliance & Investigations at Bayer US LLC

Joe started the session by discussing the legislative history of Medicare Part D, highlighting the twin ideas that, 1) cost-sharing provisions make beneficiaries aware of cost, and 2) first-dollar coverage eliminates beneficiary cost awareness, which could ultimately increase costs for both Medicare and beneficiaries. Indeed, studies have shown that if patients are required to pay for even a small portion of their care, they will be more careful consumers. Furthermore, according to the HHS-OIG, “when consumers are relieved of copayment obligations, manufacturers are relieved of a market constraint on drug prices.”

On the other hand, because copays cause lower drug use, manufacturers respond by instituting copay support programs for patients with private insurance and by donating to copay foundations for patients with public insurance. But these donations to copay foundations may implicate the anti-kickback statute (AKS) and, according to OIG, “pose a substantial risk of program and patient fraud and abuse.”

Charlene continued the discussion, describing OIG’s 2014 guidance on copay charities. Specifically, drug makers can contribute to bona fide 501(c)(3) charities that use donations from manufacturers to help subsidize out-of-pocket costs for eligible Part D enrollees, subject to certain safeguards. Pharma should not:

• Improperly narrow approaches to defining disease funds
• Limit assistance to only a subset of available products

Additionally, a drug company and a foundation cannot collude to favor patients taking the company’s drug(s), nor can they influence, directly or indirectly, the identification of disease categories. Ultimately, copay foundations must maintain their independence from manufacturers (no collusion, conduit, or visibility) and their charitable purpose (no intent to benefit donor, not ensuring donor’s drug gets used, no correlation between donation amount and drug use amount).

The speakers highlighted several areas of concern, such as manufacturer coordination with a fund regarding disease state definition, keeping a fund secret except for the donor’s hub, or when the percentage of grant beneficiaries on the donor’s drug is out of proportion to that drug’s overall market share.

There is one exception where assistance would not be viewed as a potential kickback. The waiver of coinsurance and deductible amounts is lawful where:

• The waiver is not offered as part of any advertisement or solicitation
• There is not a routine waiver of coinsurance or deductible amounts
• The waiver occurs after determining in good faith that the individual is in financial need or there have been reasonable collection efforts

Charlene discussed an important recent test case, in which Pfizer sued HHS, arguing that their copay program should be allowable for Medicare patients. The court ruled in July 2022 that the copay program was “specifically designed to induce Medicare beneficiaries to purchase a federally reimbursable drug.” In the end, drug makers are indeed prohibited from providing financial assistance to cover out-of-pocket costs for Medicare patients.

Importantly, the False Claims Act intersects with AKS, and the 2 have been used by DOJ to collect over $1 billion in settlements with 12 drug makers that allegedly used third-party foundations as kickback vehicles. DOJ has also reached settlements with 4 foundations and a pharmacy that allegedly coordinated with pharma companies on kickback schemes.

Charlene concluded the session by outlining the importance of compliance programs:

• Enforcement of policies and evidence to back it up
• Review and align compliance to incorporate requirements of Corporate Integrity Agreements (CIAs)
• CIAs require the manufacturer to vest sole responsibility and authority for PAP budgeting in an independent entity
• PAPs must be independent of the manufacturer’s commercial business
• Written criteria governing PAP donations, so manufacturer is not a conduit to the patient
• Manufacturer can’t influence PAP’s modification of disease states or control patient eligibility

Telehealth Flexibility and HIPAA Enforcement Updates: Best Practices Intersecting with Privacy, Cyber Security, EHR Incentive Programs

Dave Dauenheimer, Deputy Chief of the Healthcare Fraud Unit US Attorney's Office District of NJ

John Claud, Assistant Director, Corporate Compliance and Policy Unit, Consumer Protection Branch, U.S. Department of Justice (DOJ)

The speakers kicked off the presentation by briefly explaining the structure and function of the Consumer Protection Branch of the DOJ and the US Attorney’s Office for the District of New Jersey, as well as the primary focus of the investigations they manage: consumer health and safety, opioid enforcement, consumer fraud, etc.

There are several federal regulatory statutes that apply to data privacy and telehealth programming:

1. HIPAA (Health Insurance Portability and Accountability Act)
2. FDCA (Food, Drug, and Cosmetic Act)
3. FTC Act UDAP (Unfair or Deceptive Acts or Practices)
4. False Claims Act
5. CFAA (Computer Fraud and Abuse Act)

The speakers used several actual legal cases to outline what prosecutors are watching for in these areas of the law.

United States vs. Peter Bolos

John described what may be the largest-ever case of consumer fraud facilitated by telehealth: United States vs. Peter Bolos. The case involved telemarketers making cold calls to consumers, gathering data on their conditions, then sending those reports to prescribers who wrote pain cream prescriptions even though they never interacted with the patient themselves (this failure to interact rendered those Rxs illegitimate under the FDCA). The scheme also included captive pharmacies that processed the claims at exorbitant costs to payers. In May 2022 a federal court sentenced Bolos to 14 years in prison, and a potential billion dollar fraud was prevented. In general, telemedicine operations provide ready opportunities for bogus prescriber-to-patient relationships that can be used fraudulently.

United States ex rel. Doe vs. Viztek

This was a whistleblower case in which Viztek misrepresented its EHR software’s compliance with certification requirements necessary for eligibility for government incentive payments, and caused clients to falsely certify eligibility and receive payments. This case was preceded by two other similar but larger cases that resulted in hundreds of millions of dollars in settlements. These cases show that the government takes certification requirements seriously and will pursue companies that fail to abide by them.

United States vs. Purdue

This was a multi-part opioid case, but the speakers focused on Purdue’s interaction with Practice Fusion, an EHR software provider. Purdue paid Practice Fusion to implement a “clinical decision support” program within its EHR. The intent of the program — as shown by the investigation and by Purdue’s ultimate plea to an Anti-Kickback Statute violation — was not to support good clinical decision making but was instead to increase sales of extended-release opioids. The program ignored CDC guidelines and authoritative medical literature, and the entire program was driven by commercial issues, not good medicine. This case resulted in multiple multi-billion-dollar settlements. This case is important because it shows how practice-facing EHR systems can be corrupted in a way that clearly violates the law.

In summary, John highlighted the idea that there is a great deal of law controlling what drug makers may and may not do in the course of business. It’s a lot to manage, and stakeholders are not always in control of all aspects of data privacy. Yet as hubs and specialty pharmacies increase their patient interaction, the susceptibility to these requirements continues to expand. We must all be mindful of the importance of compliance. In keeping with the compliance theme, John noted that the current administration — including Merrick Garland, the US Attorney General — is extremely focused on compliance, a focus that has been adopted by the DOJ. And while the technicalities of a compliance program may be difficult, the basic tenets of a compliance program are very reasonable and thoughtful.

The session closed with a series of questions regarding enhanced compliance:

1. Is the corporation’s compliance program well designed?
2. Is the program being applied earnestly and in good faith?
3. Does the corporation’s compliance program work in practice?

Thought Leader: Key Learnings from the Digital Revolution

Joel White, Founder and President, Horizon Government Affairs 

“We are underutilizing data and technology solutions to a massive degree,” proclaimed Joel White as he introduced his session on the digital revolution. He segmented his tech-focused talk into 3 discrete sections: actionable data, care access challenges, and new digital solutions.

Actionable Data

Joel noted that data interoperability remains a challenge. The most recent government data shows that physicians’ engagement in electronically sending, receiving, and integrating information did not change between 2015 and 2019. Generally, physicians in larger practices have better access to outside information to support the patient journey. Moreover, physicians in the largest practices were more than twice as likely to have information available and more than 3 times as likely to use information from outside sources than those in solo practices. Even so, on a national average, only 36% of physicians had ready access to outside information, and only 26% used that information on a regular basis.

One of the reasons for that information gap is that the federal data landscape creates a conflict regarding data sharing. For example, while HIPAA and a host of state laws require that information is never to be released unless certain restrictive conditions are met, part of the 21^st Century Cures Act says information should always be released unless an entity meets 1 of 8 exceptions. Thus, the laws send mixed messages that complicate information sharing.

One of the groups working to open opportunities for appropriate information sharing, Joel explained, is the Interoperability Working Group of the Health Innovation Alliance. This ~50-member organization has laid out 4 categories of steps the federal government could take to expand the sharing and use of data that would improve the patient journey:

1. Government and industry should support the development of longitudinal patient records that can be accessed, exchanged, and used in care delivery, including by digital tools that can make the information useful and digestible at the point of care
2. Congress should create and accelerate an approval pathway for interoperable medical devices to incentivize manufacturer engagement
3. Congress should update and expand info-blocking rules and privacy standards
4. Public health information should be shared with HCPs and states to add value and an ROI to their reporting to public health

Care Access Challenges

Recent data shows an ongoing nationwide shortage of health professionals, with especially challenging gaps in the Southeast and Southwest. And when the COVID pandemic was superimposed on top of that shortage, access to care was made even more difficult. Joel showed data indicating that while primary care visits trended downward during COVID, telehealth helped fill the gap, thanks to COVID-induced relaxation of constraints on telemedicine. Incidentally, it will literally take an act of Congress to permanently remove the constraints on telemedicine and facilitate cross-state licensure, actions that Joel is pushing for.

He made the point that given the persistence of telehealth utilization (particularly in the HCP office setting), telehealth can be interpreted to be potentially substitutive for in-person visits. To support that position, Joel showed that during COVID, the top 3 reasons for telehealth visits shifted to include just chronic diseases: hypertension, cholesterol, and diabetes. In other words, patients were using telehealth for their routine long-term care needs.

Importantly, the number of total telehealth visits rose dramatically during COVID. For instance, in the Medicare population (old people that supposedly can’t/don’t use technology), telehealth visits grew from <1 million per year pre-COVID to 56 million in 2021. What’s more, telehealth use has remained at a level consistently higher than pre-COVID even as the pandemic waned going into 2022.

New Digital Solutions

To wrap up, Joel highlighted several important technological advances that can support the patient journey.

Electronic prior authorization has been seeing significant legislative and regulatory activity over the past 5 years. In the 2018 Support Act (implemented in 2020), ePA was mandated in Medicare Part D and Medicare Advantage Part D. Additionally, the House of Representatives just passed (the day before Joel’s talk) new legislation that mandates ePA broadly in Medicare Advantage plans. And he expects a rule this year on ePA across payers.

Real-time benefit tools are also seeing widespread attention from lawmakers. A provision mandating RTBT in Medicare Part D was included in the Consolidated Appropriations Act passed in 2020, and regulations regarding that mandate are expected in FY2023. Furthermore, CMS included a beneficiary RTBT requirement for Part D plans in a 2021 final rule that will take effect January 1, 2023. And there is interest in expanding RTBT to other programs such as Medicaid, CHIP, etc.

Joel finished by reminding the audience that the Congress and regulators are willing to help but slow to act. In his words, “we need more advocates!”

State of The Industry - Public Health Crisis

John Klimek, RPh, SVP, Standards and Industry Information Technology, NCPDP

The National Council for Prescription Drug Programs (NCPDP) membership spans multiple stakeholder groups, including pharmacies, pharmaceutical manufacturers, health plans, and many others. The organization’s stated purpose is to “standardize the exchange of healthcare information to improve outcomes.” NCPDP works to build consensus to serve the needs of all members. John’s main objective at NCPDP is to work with industry leaders in healthcare to achieve interoperability among healthcare standards, which will ultimately increase healthcare efficiencies and patient safety. The focus of his session was to highlight several aspects of NCPDP’s role in building standards for health care.

Topic 1: Value-Based Agreements

The expansion of value-based agreements (VBAs) may have a profound effect on pharmacies, since VBA-based transactions will not be the simple “fill-the-Rx-and-get-paid” transactions they primarily are today. To streamline claims processing in VBAs, NCPDP examined the data elements from its telecommunications standards (control the transfer of data between pharmacies and payers to process a claim) and the script (e-prescribing) standards. Over the next year or so, NCPDP will be working to identify any additional data elements that will be necessary to facilitate the exchange of information involved in value-based agreements.

Topic 2: Real-Time Healthcare Data using NCPDP Standards

NCPDP is working with STC Health (a commercial entity) to develop processes that enable the movement of data in such a way that it is available nationwide across state lines in real time to the end user. The primary focus is to deliver data to prescribers and pharmacies, with a secondary focus on patients, payers, and government entities.

Topic 3: Real-Time Prescription Benefit Standard

Research published in JAMA in 2021 confirmed that price is a top driver of non-adherence. And historically, that non-adherence began at the pharmacy, when patients were presented with a price they were unwilling or unable to pay. To reduce cost-based non-adherence, a movement has begun to provide prescribers and patients with real-time information — in the e-prescribing module of the EHR — on the specific cost of a specific drug for a specific patient on a specific day. The expectation is that when prescribers and patients have access to accurate real-time price information, they can work together to select a drug that the patient can afford and will purchase. NCPDP has established standards that enable real-time prescription benefit information transfer, including patient eligibility, product coverage, cost, coverage restrictions, and alternative products. The system is rolling out successfully. Incidentally, HL7, another standards-development organization, is working on a process to enable patients to access real-time cost information, perhaps through a patient portal.

Topic 4: Biosimilars and NCPDP Prescribing Standards

NCPDP has taken steps to develop biosimilar prescribing standards, including how and when biosimilars may be substituted for reference products. The implementation of these standards by pharmacies can have a profound impact on how pharmacies are paid for scripts filled.

Topic 5: Other Evolving Standards from NCPDP and Others

Finally, John described other evolving standards. For example, he noted that there are continuous updates to the NCPDP Telecom and Script standards and that NCPDP works with an array of stakeholders to implement those changes. Several standards updates, including the new “F6” Telecom standard, are under review now by HHS Secretary Becerra. And, as noted earlier, NCPDP collaborates with other standards-development organizations such as HL7, X12, and CAQH CORE on a variety of standards. Finally, NCPDP offers several work groups that invite participation, and the NCPDP Foundation has established a number of access points through which organizations can get more involved: Patient Safety, Role & Value of the Pharmacist, and Access to Care.

We hope you have found value in these brief reviews of key legal, regulatory, and standards sessions at the 2022 Hub and Specialty Pharmacy Models West conference. Be sure to also check out our reviews of key strategy and tactics sessions at the conference.