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Expanded Coverage through the Affordable Care Act: What it Means to You and Your Business. Integra Users Seminar January 23, 2014 Leigh Davitian , JD Brad Kile, PhD. Disclosures. Brad Kile is an independent consultant and has no financial interest or relationships to disclose .

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expanded coverage through the affordable care act what it means to you and your business

Expanded Coverage through the Affordable Care Act: What it Means to You and Your Business

Integra Users Seminar

January 23, 2014

Leigh Davitian, JD

Brad Kile, PhD

disclosures
Disclosures

Brad Kile is an independent consultant and has no financial interest or relationships to disclose.

Leigh Davitian is an independent consultant and has no financial interest or relationships to disclose.

learning objectives
Learning Objectives
  • List the main implications of the Affordable Care Act (ACA) on health professionals and the patient they serve.
  • Compare current reimbursement models with new financial incentives for providers under the ACA.
  • Assess new opportunities presented by the ACA for pharmacists to diversify and expand the services provided to beneficiaries
  • Explain how the new Health Insurance Exchanges (HIE) impact the demand for medications.
  • Identify how the Centers for Medicare and Medicaid Services considers the differences between Drug Regimen Review (DRR), Medication Therapy Management (MTM), and Comprehensive Medication Review (CMR) for individuals residing in long-term care settings
  • Identify the impact on demand for health care services as a result of Medicaid expansion and the availability of coverage through health insurance exchanges.
presentation outline
Presentation Outline
  • Affordable Care Act Implementation
    • What is Happening Now and Big Picture
    • Timelineand Benchmarks
  • New Payment Models
    • ACA Provisions
    • Payment for Medications and Medication Reviews
  • Expanded Coverage Under the ACA
    • Health Insurance Exchanges
    • Medicaid Expansion
    • Key Policies
  • 2014 Federal Agenda
  • Q & A
what is happening now
What is Happening Now

Major work must be done to handle monumental shift in coverage and eligibility

Coverage

  • Health Insurance Exchanges
  • Target is 30 million currently lacking coverage

Eligibility

  • Medicaid extends to 133% federal poverty level
  • Target is 17 million currently not eligible
aca implementation
ACA IMPLEMENTATION

2010-13 2014 2015-2020

Regulate Coverage Restructure

Industry Expansion Care Delivery

- Insurance - Individual - Quality

Reform Mandate ties to Payment

big picture on aca
Big Picture on ACA
  • Expanded coverage through Health Insurance Exchanges and Medicaid Expansion
  • Impact on Employers
  • Impact on Individuals
  • Impact on Health Providers
    • Program Integrity
    • Adapting to Change
    • Payment Models
      • Linking Care Across Settings
      • Tying Payment to Quality
compliance programs
Compliance Programs
  • For over 14 years, the Office of Inspector General (OIG) has been encouraging Medicare and Medicaid providers to “adopt voluntary”compliance programs 
  • Affordable Care Act (ACA), compliance programs are no longer voluntary for Medicare and Medicaid providers
  • Specifically, Section 6401 of ACA requires healthcare providers to establish compliance and ethics programs that contain certain “core elements” as a condition of their participation in the federal healthcare programs
  •  To date, HHS has not defined the “core elements” but should not deter providers from implementing a workable, organic compliance program
    • For now – show a good faith effort
mandated compliance program
Mandated Compliance Program

ALL Medicare providers MUST have comprehensive compliance program in place by March 23, 2013… 10 months ago!

vague elements identified
Vague Elements Identified
  • Develop and distribution of written policies, procedures and standards of conduct
  • Designate a chief compliance officer in charge of operating the program
  • Implement regular education and training program for all “germane” employees
  • Develop an internal audit system to identify problem areas
  • Develop a system to report deficiencies and problem areas
  • Develop a process where employees can come forward without fear of retaliation
  • Develop a means to quickly remedy problems in a systematic, transparent way
some core elements
Some Core Elements

Develop Written Policies

  • Looks like a code of ethics or standards of conduct
  • Similar to a “mantra” that all good business’ should put into place
      • Best practices for one’s own company
      • Hiring good, quality employees remains important
      • Criminal background checks especially with those in middle/higher management
compliance officer
Compliance Officer

Select An Appropriate Compliance Officer

  • The designation of a chief compliance officer and other appropriate bodies should a be full-time, longer term employee(s) that understand the business OR has served in this capacity in other businesses/organizations
  • Many companies use their HR or office manager as designated officer
    • Caveat: Be sure officer has a keen understanding for all aspects of the business
    • Choose wisely!!!
compliance officers duties
Compliance Officers Duties
  • Compliance Officer SHOULD be very familiar with:
    • All pertinent CMS regulations governing Medicare providers conditions of participation and regulations on a state and federal level
    • Coordination of Benefits
      • Primary insurances role
      • Secondary insurances role
      • Private payors
    • False Claims Act
    • Anti-kickback regulations
    • HIPAA regulations
    • ACA provisions!!
some core elements1
Some Core Elements

Training

  • Regularly review and update training programs for ALL employees who“touch” Medicare billing, coding, claims, etc
  • Test employees’ understanding of training topics
  • Maintain documentation to show which employees received training
  • Make sure the Board of Directors receive training
    • Starts at the top!
  • Attend conferences and webinars, subscribe to publications and OIG’s email list
  • Monitor OIG’s website and other government resources
some core elements2
Some Core Elements

Lines of Communication

  • Have open lines of communication between you and employees
  • Maintain an anonymous “ reporting method” to report issues
    • Retaliation is a serious for not-reporting
    • Enforce a non-retaliation policy for employees who report potential problems
  • Use surveys or other tools to get feedback on training and on the compliance program
  • Use newsletters or internal websites to maintain visibility with employees
some core elements3
Some Core Elements

Internal Auditing

  • Create an audit plan and re-evaluate it regularly
  • Identify your organization’s risk areas
  • Perform proactive reviews in regards to coding, billing, contracting, business associates
  • Identify REAL value added services that promote quality of care to customers and their end users
  • Create corrective action plans to fix the problem
contracting trends
Contracting Trends
  • How long has your contract been in place?
  • When did you last review your contracts?
  • When did you last amend your contract?
  • Do you even know where your contracts are stored?
  • Are they standard template contracts?
  • Are they different and customized for each customer?
  • Did legal counsel write the contracts?
  • Did legal counsel at least review the contracts?
contract due diligence know the other party
Contract Due Diligence:Know the Other Party
  • Do thorough due diligence
  • Have you done business with them before?
    • Strengths
    • Weaknesses
    • Suspicions activities
  • Identify any Medicare exclusions
  • Have they been in business under another name before?
  • Understand your customers current financial position
  • Understand your customers residents/beneficiaries current clinical needs
contract due diligence clearly define services
Contract Due DiligenceClearly Define Services
  • Set clear expectations for both sides
    • Detailed provisions
    • Short is NOT sweet
  • Be thorough with your language
    • Entire agreement in single document
    • No side emails or discussions
    • No “hand-shakes”
    • No napkin provisions
  • Perform services only in agreement
    • Side services can cause conflicts and misunderstandings
    • Could lead to heighten suspicion
  • Don’t start services until the agreement is fully executed
  • Amendments need to be IN WRITING
in a nutshell
In a Nutshell …

A compliance program must be “effective in detecting and preventing criminal, civil, and administrative violations” and “in promoting quality of care” within your business and as it pertains to Medicare, Medicaid and other government payor programs …

audits
Audits

Fact Pattern:

You are a health care provider and on a random Monday a man enters your place of business and introduces himself. He hands your receptionist an “official” piece of paper and insists it be delivered to the person in charge. Appears to be legal documents.

What should the receptionist do?

who entered your pob
Who Entered your POB?
  • Who is it?
    • Important to identify what organization person is representing
    • Should show identification
  • Private Organizations under Contract with CMS
    • Program Safeguard Contractors
    • Recovery Audit Contractors
    • Zone Program Integrity Contractors
    • Medicare Carriers
  • Federal Law Enforcement:
    • HHS-OIG
    • FBI
    • DOD
    • IRS
    • FDA
what type of document
What Type of Document?

What type of documentis being served/delivered?

  • HHS-OIG Subpoena
  • Search Warrant
  • Request for general documentation
  • Request for employee files
  • Request for billing or coding information
  • Request for patient information
protocol in place
Protocol in Place
  • Do all employees know how to respond to such an occurrence?
      • Does your employer have a protocol in place?
      • Covered in the companies compliance program
      • Written policy distributed to all employees
        • Phone tree
            • Owner/Chief Executive Officer
            • Office Manager
            • Compliance Officer
            • General Counsel
      • Do you have rights NOT to respond?
in a nutshell protocol in place
In a Nutshell:Protocol in Place
  • Point of contact person
    • Employee in authority
    • Knows your business operations
  • Want to limit amount of persons interacting with law enforcement or agency
  • Want to show “deference” to the process but privileges are in place to protect employees
    • Sixth Amendment – Right to Counsel
  • Government has a right to talk to your employees
    • NEVER tell employees to NOT talk or interact
  • Want to put policies in place to control the situation
question
Question:
  • Why are Pharmacists NOT Bona Fide Health care providers?
why pharmacist profession did not want to be bona fide providers
Why Pharmacist Profession DID NOT want to be Bona Fide Providers
  • Lack of confidence to consultant “patients”
  • Exposure to malpractice
    • Liability for improper information shared with “patient”
  • Malpractice insurance costs
  • Lack of time to consultant “patients”
  • Lack of ability to dispense volume of inventory if time is needed to consult
    • Profession attached to product NOT professional services
  • Lack of ability to meet financial demands
that was then this is now
That was then; This is NOW
  • Role of pharmacists has changed over years
    • Academically
    • Clinically
      • Medication management
      • Patient consultations
  • Mandated in select health care settings
    • OBRA ’87
    • Diabetes Education
    • Immunization providers
    • Medication Therapy Management under Part D
  • So – why do we still not have provider status?
lack of status runs deep
Lack of Status Runs Deep
  • Understanding the evolved role of pharmacists
    • Legislators
    • Regulators
    • Payors
    • Industry participants
  • Not merely an intermediary between vendor and consumer
  • Pennsylvania Supreme Court Case
lack of status runs deep1
Lack of Status Runs Deep
  • Medicare trust fund being threatened by insolvency
    • “Ever-shrinking” pie
  • Allowing for compensation in a “costernot a saver”
    • Political battle: New spending versus cuts
  • Ancillary health care groups threatened by inclusion
  • PHARMACY MUST BECOME and STAY UNITED
    • Remain vigilant, tenacious and persevere
health insurance exchanges
Health Insurance Exchanges

Health Insurance Exchanges (Marketplaces)

  • Virtual insurance marketplaces for individuals and employers to shop for coverage
  • Distributors of health care, not deliverers
  • Commercial insurers will manage care within federal/state requirements
  • Facilitate support/subsidies for individuals based on need
health insurance exchanges1
Health Insurance Exchanges
  • What has to be covered?
  • Actuarial equivalent calculated for each state
  • Essential Health Benefits
    • Prescription drugs
    • Ambulatory patient services
    • Emergency services
    • Hospitalization
    • Maternity and newborn care
    • Mental and behavioral health
    • Rehab and Lab services
    • Preventive / wellness care
    • Pediatric care
health insurance exchanges2
Health Insurance Exchanges
  • HIE plan options tiered as “precious metals”
  • Actuarial Value
    • 90%+ Platinum
    • 80%+ Gold
    • 70%+ Silver
    • 60%+ Bronze
hie facilitating subsidies
HIE – Facilitating Subsidies
  • Support provided via HIEs, consumer assistance “Navigators”
    • Help determine eligibility for financial assistance
    • HEIs required to tell consumers if they are eligible for coverage through state Medicaid or CHIP programs
  • Help for those with incomes between 100% - 400% of FPL
    • Reduced cost sharing < 250%; lower deductibles and copays
    • Premium tax credits – refundable and advanceable at time of purchase through HIE
insurance reform
Insurance Reform
  • Incentives for Insurers
    • Increased demand
    • Diversity of insurance pools
    • Financial incentives for covering those with pre-existing conditions
  • Tighter Regulation of Insurers
    • Premiums can vary only based on: age, tobacco use, family size, and geography
    • Medical Loss Ratio – must spend at least 80% of premiums on direct care
health insurance exchanges3
Health Insurance Exchanges

Health Insurance Exchanges

  • Virtual insurance marketplaces for individuals and employers to shop for coverage
  • Distributors of health care, not deliverers
  • Commercial insurers will manage care within federal/state requirements
  • Facilitate support/subsidies for individuals based on need
impact on businesses
Impact on Businesses

Penalties for Not Providing Affordable Coverage

  • Small businesses <50 employees NOT required to offer coverage
  • Businesses >50 employees will pay a penalty
    • $2,000 per employee (excluding the first 30 employees) if they do not offer coverage for employees who average 30 or more hours per week
    • No penalty for part-time employees
health insurance exchanges4
Health Insurance Exchanges

Impact on providers

  • Payment
  • Care delivery
  • Competition
  • Consolidation of contracts
medicaid in transition
Medicaid in transition
  • 60 million Americans covered by Medicaid (1 in 5)
  • ACA expands eligibility in 2014; will lead to approximately 16 million more individuals in Medicaid
  • All states operate some Medicaid Managed Care (MMC), except Alaska, New Hampshire and Wyoming
  • 65% covered by MMC, but payments account for only 20% of Medicaid spend – due to exclusion of high-cost populations
medicaid in transition1
Medicaid in transition
  • States moving aggressively to place high-cost population into MMC: disabled, elderly, nursing home residents, dual eligible, mental heath
  • Motivation of States
    • Improve care delivery and payment systems
    • Focus on high-cost/high needs
    • Budget pressures
    • Medicaid expansion under ACA
    • Federal funding incentives:
      • “Person-centered systems of care”
      • Medicaid “health homes”
      • Demos on integration for dual eligibles
medicaid expansion
Medicaid Expansion
  • Targets those individuals at or below 133% of federal poverty level
  • Federal government will pay 100% of the cost for expansion for 2014, 2015, 2016
  • Federal share tiers down to 90% for 2020
  • State participation varies
  • Help for those “left behind’ in states that do not expand eligibility
new reimbursement models
New Reimbursement MODELS
  • Accountable Care Organizations
  • Bundled Payment
  • Hospital Readmissions
  • Value Based Purchasing
revisiting the key concepts
Revisiting the Key Concepts
  • Typing Payment to Quality
  • Linking Care Across Settings
  • Beyond ACOs, these concepts are central to:
    • Part B Reform (replacing the SGR)
    • Bundled Payments
    • Value-based Purchasing
population health management
Population Health Management
  • Evolution of PHM in non-government programs
  • PHM and the Affordable Care Act
  • Key Concepts:
    • Typing Payment to Quality
    • Linking Care Across Settings
medicare acos quality measures
Medicare ACOs: Quality Measures

MSSP and Pioneer use the same quality measures and MUST MEET QUALITY TARGETS before they are eligible for shared savings.

  • 33 Quality Measures across 4 Domains
  • Patient/caregiver experience (7 measures)
  • Preventive health (8 measures)
  • At-risk population (12 measures)
  • Care coordination (6 measures)
slide57

ME (4)

WA

(2)

ND

(1)

MT(1)

VT (4)

MN (5)

NH

NY (19)

OR

(2)

MA

WI (9)

ID(1)

SD(1)

RI-2

MI (10)

WY(1)

PA (6)

IA (7)

NJ

NE(2)

OH

(8)

DE - 1

IN (10)

NV (3)

IL (13)

WV(1)

MD - 10

VA(7)

UT

(1)

D.C. - 3

CO (2)

CA (23)

KS(1)

MO

(4)

KY (8)

NC (8)

TN (8)

OK(2)

AR

(2)

SC (4)

AZ (8)

NM (3)

GA (13)

MS (3)

AL(2)

LA

(2)

TX (17)

AK

FL (32)

HI

States with Medicare ACOs

8

18

CT- 10

NJ -10

No Medicare ACOs

MSSP ACOs

Both MSSP and Pioneer ACOs

1

2

PR

Source: CMS Medicare Shared Savings Program website: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/index.html?redirect=/sharedsavingsprogram/.

key dates for 2014
Key Dates for 2014
  • January 1, 2014, 123 new ACOS provide services to 1.5 million more Medicare beneficiaries
    • >half are physician-led and serve fewer than 10,000 beneficiaries
    • 1 in 5 ACOs include community health centers, rural health clinics, and critical access hospitals that serve low-income and rural communities.
  • Milestone: 360 ACOs have been established, serving over 5.3 million Americans with Medicare
  • Summer of 2014, opportunities announced for new ACOs to begin January 2015.
commercial market implications
Commercial Market Implications

# 1 Entities currently running Medicare ACOs are re-structuring their care models for non-Medicare patients.

  • Implication: ACO influence spans well beyond Medicare

# 2 Commercial payers partnering with providers to form and support ACOs across the country

  • Implication: Commercial players engaging opportunities

# 3 Commercial ACOs will use multiple models

  • Providers with access to ACOs now will have distinct advantage as ACOs spread
bundled payments
Bundled Payments

Affordable Care Act

  • Medicare: By 1/1/13 national, voluntary for 8 patient conditions
  • Medicaid: By 10/1/12 demonstration program in up to 8 states
  • NOT IMPLEMENTED (YET)

Happening Now

Testing 4 models through CMS Innovation Center

  • Model 1: Retrospective Acute Care Hospital Stay Only
  • Model 2: Retrospective Acute Care Hospital Stay plus Post-Acute Care
  • Model 3: Retrospective Post-Acute Care Only
  • Model 4: Prospective Acute Care Hospital Stay Only
bundled payments1
Bundled Payments
  • January 2013, CMS announced the 450+ health care organizations selected to participate in the Bundled Payments for Care Improvement (BPCI) initiative.
  • Four models tested
    • Organizations choose up to 48 clinical episodes of care to test.
  • Organizations enter into payment arrangements that include financial and performance accountability for episodes of care.
hospital readmissions
Hospital Readmissions

Hospital Readmissions Reduction Program

  • Adjusts hospital payments based on the $ value of each hospital’s % of potentially preventable Medicare readmissions
  • Started Oct 1, 2012: three conditions: heart failure, heart attack and pneumonia
  • Oct 1, 2015: COPD, coronary artery bypass graft, percutaneous transluminal coronary angioplasty, vascular surgery and others as determined by HHS
  • HHS calculates and make publicly available information on all patient hospital readmission rates
hospital value based purchasing
Hospital Value Based Purchasing
  • For discharges occurring on or after Oct 1, 2012, hospital are now measured
  • Two Domains:
      • Clinical Process of Care: comprised of 12 clinical process measures
      • Patient Experience of Care: Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS)
  • For 2014, measures expanded to include:
      • 3 Mortality outcome measures; 8 hospital acquired Condition measures; 2 Agency for Healthcare Research and Quality (AHRQ) composite measures
  • ACA calls for VBP in nursing homes, hospice and ambulatory surgical centers
short cycle dispensing
Short Cycle Dispensing

14-day-or-less dispensing requirement for Part D enrollees residing in LTC facility began January 1, 2013

Brand-name oral solid medications only

Definition of “dispensing fee” modified to include costs associated with the acquisition and maintenance of technology to maintain reasonable pharmacy costs

Use of automated dispensing is not mandated

short cycle dispensing1
Short Cycle Dispensing
  • The facility selects the dispensing methodology or methodologies to be used in concert with their contracted LTC pharmacy
  • The Part D sponsor cannot choose or mandate any particular dispensing methodology
  • Uniform with respect to each LTC facility and will apply to all Part D sponsors and pharmacies dispensing to enrollees in that facility
medication reviews and utilization
Medication Reviews and utilization
  • Drug Regimen Review
  • Antipsychotic Medication Use
  • Independence of Consultant Pharmacists
    • Potential Conflicts of Interest
    • Effectiveness
    • Impact on Patients
    • Cost to government
difference between mtm and drr
Difference between MTM and DRR

January 2012 CMS Memo:

  • “We believe that there is potential overlap in these reviews that could possibly result in conflicting reviews and recommendations for prescribers and facility staff, as well as excess costs in the health care sector.”
  • “We believe that better care coordination and cost efficiencies would result from arrangements that include the LTC consultant pharmacist in the conduct of Part D MTM services for beneficiaries in the long term care setting.”
ltc and medication management1
LTC and Medication Management

Three Major Trends

  • Integration of Reviews
    • DRR is facility requirement; MTM and CMR are Part D requirements.
  • Conflicts of Interest (potential or real)
    • Reviews influenced by financial implications of medications?
    • Should reviewers be independent?
  • Class-Specific Scrutiny
    • Government focus on different classes of medications over time.
    • Currently: antipsychotic medications and hydrocodone products.
reimbursement for pharmaceuticals
Reimbursement for Pharmaceuticals

Many polices with a single goal…

Replacing the “fundamentally flawed nature of AWP-based reimbursement” and the “inflated published prices” that cause the government to “pay too much for certain drugs” - Office of the Inspector General

reimbursement
Reimbursement

Medicaid – Average Manufacturer Price (AMP)

  • ACA modified the Federal Upper Limit (FUL) for Medicaid multiple source drugs
  • Effective October 1, 2010, FUL as no less than 175 percent of the weighted average (determined on the basis of utilization) of the most recently reported monthly average AMP
  • CMS issuing draft AMP-based FUL reimbursement files for review and comment only for multiple source drugs
    • weighted average of monthly AMPs in a FUL group
    • not posting monthly AMPs for individual drugs
average manufacturer price
Average Manufacturer Price
  • Applies to Medicaid Reimbursement, Broader Implications
  • 2012 Proposed Rule
  • CMS proposes to define “retail community pharmacy” for manufacturer AMP calculations.
  • “an independent pharmacy, a chain pharmacy, a supermarket pharmacy, and a mass merchandiser pharmacy that is licensed as a pharmacy by the State and that dispenses medications to the general public at retail prices.”
  • Excludes from AMP sales to PBMs, LTC pharmacies, mail order pharmacies, and others.
  • CMS notice in Fall 2013, says Final Rule will be issued in January 2014
r eimbursement
Reimbursement

Medicaid – developing alternate benchmarks

  • CMS contracts with Myers & Stauffer, LC, to perform surveys
  • Part I - Retail Community Pharmacy Consumer Prices National Average Retail Prices (NARP) for Medicaid Covered Outpatient Drugs
  • PART II - Drug Acquisition Costs Paid By Retail Community Pharmacies

National Drug Acquisition Cost (NADAC)

reimbursement1
Reimbursement

Dispensing Fees

  • If reimbursement is actual acquisition cost, what would the dispensing fee need to be to providers?
  • What is the cost to dispense?
  • What are the differences for different setting like LTC?
  • Beyond Medicare and Medicaid, what are the implications for other payors?
reimbursement2
Reimbursement

Medicare Part B – Average Sales Price (ASP)

  • 3-6 month lag time is problematic
  • OIG Feb 2013 report calls for competitive bidding of DME infused medications
  • CAP option for physicians is not an option
part b sustainable growth rate
Part B Sustainable Growth Rate
  • House Energy and Commerce Committee bill
  • Replaces SGR with a system that incentivizes quality and efficiency starting in 2019.
  • 5 years of stable Medicare payments starting next year, with reimbursements growing 0.5% for each year between then and 2018.
  • Starting in 2019, the "Update Incentive Program" would place at risk a certain amount of fee-for-service payments and base those reimbursements on quality measures.
controlled substances
Controlled Substances

Federal Action

“Food and Drug Administration Safety and Innovation Act”

  • Draft provision NOT in the final bill was reclassification of all hydrocodone-containing products to Schedule II
  • Final bill requires FDA hold public meeting
    • January, 2013
    • Panel recommends changing classification
dea proposed rule
DEA Proposed Rule
  • Proposed Dec. 2012; comments due Feb. 19, 2013.
  • Proposes to allow authorized manufacturers, distributors, reverse distributors, and retail pharmacies to voluntarily administer mail-back programs and maintain collection receptacles.
  • Expand the authority of authorized retail pharmacies to voluntarily maintain collection receptacles at long term care facilities (LTCF).
  • No manufacturer, distributor, reverse distributor, or retail pharmacy is required to be a collector under the proposal.
dea proposed rule1
DEA Proposed Rule

Key provisions related to LTC include:

  • LTCFs would be permitted to dispose of controlled substances on behalf of an ultimate user who resides or has resided at the LTCF.
  • LTCFs would be required to transfer controlled substances in Schedules II through V into collection receptacles immediately, but no longer than three business days after it is determined that the ultimate user no longer needs or wants, or should discontinue use of the controlled substance.
  • If the LTCF does not have access to an on-site collection receptacle, they are not otherwise permitted to dispose of a controlled substance on behalf of an ultimate user.
federal oversight
Federal Oversight

FDA of Drug Quality and Security Act:

  • Compounding
    • response to the meningitis outbreak
  • Track and Trace
    • administered by FDA to track a drug from its origination, through the manufacturing process, to the point of sale
dmepos competitive bidding
DMEPOS Competitive Bidding

Round 2 Starts July 1

  • 8 product categories
  • 91 Competitive Bid Areas
  • 13,126 contracts awarded to 799 suppliers
  • 45% savings

National Diabetic Testing Supplies

  • 52 locations for mail-order/home delivery
  • Retail payment to = mail-order
  • 72% savings

Round 1 Recompete Underway

current reality
Current Reality
  • No uniform approach due to lack of clarity on rules
  • The Drug Enforcement Administration (DEA)
  • Environmental Protection Agency (EPA)
  • Centers for Medicare and Medicaid Services (CMS)
  • Food and Drug Administration (FDA)
dea proposed rule2
DEA Proposed Rule
  • Proposed Dec. 2012; No action after.
  • Proposes to allow authorized manufacturers, distributors, reverse distributors, and retail pharmacies to voluntarily administer mail-back programs and maintain collection receptacles.
  • Expand the authority of authorized retail pharmacies to voluntarily maintain collection receptacles at long term care facilities (LTCF).
  • No manufacturer, distributor, reverse distributor, or retail pharmacy is required to be a collector under the proposal.
dea proposed rule3
DEA Proposed Rule

Key provisions related to LTC include:

  • LTCFs would be permitted to dispose of controlled substances on behalf of an ultimate user who resides or has resided at the LTCF.
  • LTCFs required to transfer Schedules II through V into collection receptacles immediately, but no longer than three business days after it is determined that the ultimate user no longer needs or wants, or should discontinue use of the controlled substance.
  • If the LTCF does not have access to an on-site collection receptacle, they are not otherwise permitted to dispose of a controlled substance on behalf of an ultimate user.
controlled substances1
Controlled Substances

Reclassification of all hydrocodone-containing products to Schedule II

  • FDA hold public meeting
    • Panel recommends changing classification
  • Legislation introduced in Congress
  • Change not definite, but could come at any time after Rulemaking process
commission on ltc recommendations
Commission on LTC Recommendations
  • Report to Congress – Sept 30, 2013
    • Framework for Reform
  • SERVICE DELIVERY
    • A more responsive, integrated, person-centered, and fiscally sustainable LTSS delivery system that ensures people can access quality services in settings they choose.
  • FINANCE
    • A sustainable balance of public and private financing for long-term services and supports (LTSS) that enables individuals with functional limitations to remain in the workforce or in appropriate care settings of their choice.
part b drugs and biologics
Part B Drugs and Biologics
  • Average Sales Price (ASP) + 6%
  • 2011 and 2012 legislative threat - reduce to ASP + 3%
  • June 2013 House Hearing, discussion looks at reform
    • H.R. 800, would exclude customary prompt pay discounts extended by manufacturers to wholesalers from ASP calculation.
    • H.R. 1428, the Comprehensive Immunosuppressive Drug Coverage for Kidney Transplant Patients Act – ESRD.
    • H.R. 1416, the Cancer Patient Protection Act, would exempt Medicare Part B drug payments from sequestration.
aca major shift
ACA: Major Shift

Linking Care Across Settings

  • Breaking down care silos through payment incentives
  • Rehospitalizations
  • Bundled Payments Program
  • Accountable Care Organizations (ACOs)
aca major shift1
ACA: Major Shift

Tying Payment to Quality

  • Sweeping change in approach to payments
    • Quality outcomes replace utilization as payment drivers
  • Value-based Purchasing
  • Bundled Payments Program
  • Accountable Care Organizations (ACOs)
  • Existing Quality Programs
    • Minimum Data Set 3.0
    • Nursing Home Compare Data
tying it all together
Tying it All Together
  • Expanded coverage leads to increase in demand for health services
  • Know the payment incentives to know your customers
  • Understand who is who when it comes to medication reviews
  • Prepare for changes from Federal oversight
slide97

Thank You!

Leigh Davitian

sldavitian@dumbartonassociates.com

Brad Kile, PhD

bkile@dumbartonassociates.com