5 Events in the Nation's Capital That Drove Managed Care News in 2017

As 2017 came to close, The American Journal of Managed Care^® (AJMC^®) asked readers to weigh in on the events they believed had the greatest impact on managed care during the year. As the votes came in, it was clear that what happens in Washington, DC, matters—and that Capitol Hill policy makers will continue to make a difference in 2018.

Here are 5 top managed care events for 2017:

5. CMS finalizes 340B reform

Overhauling this program, which was set up to help safety net hospitals take care of needy patients, has been a priority for AJMC® readers, including members of the Community Oncology Alliance (COA). A final rule took effect November 1, 2017, which adjusts payment for drugs purchased through the program to the average sale price (ASP) minus 22.5%, rather than ASP plus 6%. The rule exempts rural sole community hospitals, children’s hospitals, and prospective payment system-exempt cancer hospitals.

CMS also reduced some administrative requirements on rural providers. COA had charged that abuses of the 340B program had caused the loss of community and rural cancer clinics, but several hospital groups have sued over the changes to 340B.

Read our story here.

4. The FDA approves tisangenlecleucel, the first CAR T-cell therapy

Tisagenlecleucel, to be sold as Kymriah by Novartis, received approval August 30, 2017, as the first chimeric antigen receptor (CAR) T-cell therapy, which involves collecting a patient’s living cells and modifying them to fight cancer in the blood. This therapy, developed at the University of Pennsylvania, was approved for pediatric patients with acute lympoblastic leukemia. It didn’t take long for FDA to approve another CAR T-cell therapy for diffuse large B-cell lymphoma.

While tisangenlecleucel came with a price tag of $475,000, Novartis announced a pay-for-performance deal with the federal government that experts are watching as a sign of things to come. The approval marked a high point in a banner year for FDA, which not only matched its record for approvals but also developed new policies to promote generics, biosimilars, and healthcare technology.

Read our story here.

3. Trump ends cost-sharing reductions of ACA

After the Senate failed to pass legislation to repeal the Affordable Care Act (ACA), Trump was not done trying to undo the ACA. He had spent months signaling that he might end cost-sharing reductions (CSRs), feature of the law that gives insurance companies funds to meet cost requirements for the poorest consumers while holding down premiums for everyone else. On October 13, 2017, he finally pulled the plug on the program, killing $10 billion in payments and creating odd disruptions in premiums across the exchanges.

Adjustments for this move mostly fell within the silver plans (some states had forced health plans to assume Trump would make this move, others had not). As a result, some gold plans with richer coverage may cost less than silver plans in some states, while some of the lowest-income residents can get ACA coverage for virtually nothing or for free. Meanwhile, the loss of CSRs has hit hardest on middle-class families—their premiums have soared.

Senator Susan Collins, R-Maine, tried to fix this by trading her vote on the tax bill for a promise to fund CSRs in a companion stopgap budget bill. But House Speaker Paul Ryan, R-Wisconsin, and fellow House Republicans denied Collins’ request after her tax vote was already in hand.

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2. Senate fails to pass ACA repeal

Senator John McCain, R-Arizona, gave the thumb heard round the world on July 28, 2017, when he voted no on the “skinny bill” to repeal and replace the Affordable Care Act, joining fellow Republicans Collins and Lisa Murkowski of Alaska in backing away from the plan to dismantle the healthcare law through a budget resolution. McCain, who had just been diagnosed with brain cancer said he acted on procedural grounds; the Senate’s “regular order” had not been followed. It foreshadowed what would come, when the tax bill at the end of 2017 would include a provision to strip out the individual mandate, which most experts believe will lead to higher premiums in 2018. Murkowski and Collins supported the tax bill for different reasons; McCain signaled his support but was unable to vote on the Senate floor as he was home in Arizona due to the effects of cancer treatment.

Meanwhile, ACA sign-ups for 2018 were nearly on pace with 2017 despite a shortened open enrollment period and reduced advertising costs.

Read our story here.

1. CVS announces deal to buy Aetna

The $69 billion deal announced December 3, 2017, would involve one of the nation’s largest retail pharmacy chains and one of its largest insurers. It would bring together partners who are bracing themselves for Amazon’s expected foray into online drug sales. As employers and consumers look for ways to squeeze costs from medical care, big players are interested in partnerships that can reach patients more directly and efficiently. CVS Health already owns the nation’s second-largest pharmacy benefits manager and has made inroads into convenient care with its Minute Clinics.

Critics of the transaction fear that it could reduce consumer choice if patients are forced to use a CVS pharmacy when their employer enrolls them in Aetna. Antitrust regulators turned back Aetna’s attempt to merge with Humana (along with a proposed Cigna—Anthem union), but this is a different proposal under a new president, so antitrust watchers don’t know exactly what to expect in 2018.

Read our story here.