Coverage from the National Comprehensive Cancer Network Policy Summit held June 27, 2019, in Washington, DC.
High costs of care, particularly for prescription drugs, dominated a discussion of cancer care at the state level during the June 27, 2019, National Comprehensive Cancer Network Policy Summit in Washington, DC.
With authority from CMS, states have looked at different ways to address needs for their specific populations while containing costs, explained Jennifer Carlson, associate vice president of External Relations and Advocacy at The Ohio State University Wexner Medical Center.
For example, states like Louisiana and Washington have adopted the “Netflix” subscription model, which allows the states to negotiate prices with manufacturers of hepatitis C virus (HCV) drugs. Under the model, states can pay a fixed amount per year for an unrestricted amount of HCV drugs.1 States are also dabbling with value-based purchasing models, where the states pay different amounts based on the efficacy of the drug, Carlson explained.
While most of the focus has been on high drug costs, it’s important to keep in mind that these are not the only costs affecting patients with cancer, said Lee Jones, MBA, a patient advocate and cancer survivor from Arlington, Virginia. Patients are also affected by the cost of radiation, computed tomography scans, and ongoing testing.
Offering a unique perspective, Anne Levine, MEd, MBA, vice president of external affairs, Dana-Farber Cancer Institute, discussed how Massachusetts controls healthcare spending by tying that spending to the state’s economy. In 2006, the state passed legislation that led to 97% of the commonwealth’s residents having insurance coverage by 2008.2 Of those covered, 25% are enrolled in the state’s Medicaid program, which accounts for 40% of the entire state budget, explained Levine.
With rapid growth in healthcare spending, the state in 2012 passed another piece of legislation to put healthcare spending in line with the growth of the state’s overall economy by setting a healthcare cost growth benchmark set by the state’s Health Policy Commission (HPC).3 Total healthcare costs account for growth in all medical expenses paid to providers by private and public payers, all patient cost-sharing amounts, and the net cost of private insurance. Between 2013 and 2017, the benchmark was set equal to the potential gross state product of 3.6%.
Beginning in 2018 and ending in 2022, the benchmark is set to 3.1%. While overall healthcare spending must also be monitored, Massachusetts has found that pharmaceuticals account for a large part of healthcare spending growth, explained Levine. Between 2016 and 2017, overall healthcare costs grew 1.7%, but pharmacy expenditures increased by 4.1%.4
To try and rein in drug prices, the state is moving toward allowing MassHealth, the commonwealth’s Medicaid program, to allow the program to negotiate directly with drug companies for high-priced drugs. When the plan was initially introduced in January, if the negotiations were not successful, the governor’s office could propose a price, hold public hearings, or refer the drug price to the HPC.5 In the final version, drug manufacturers would not be forced to negotiate prices, attend public hearings, or be referred to the Massachusetts’ attorney general. While innovative, the model could negatively impact patients with cancer, warned Jones.
“If you start capping expenditures on healthcare, it eventually ends up getting down to the patient, and the patient is not able to have access to the quality or quantity of care that they need,” said Jones. “And if you end up capping it significantly enough, you may end up getting drug makers not being willing to sell drugs to that state if they can’t earn whatever they consider to be a reasonable profit.”
Moving the conversation outside of costs, the panel also discussed their frustrations with utilization management strategies, including prior authorization and step therapy.
“I think the intentions behind it are good in that we’re trying to promote value and decrease waste, but I think the concerns most practitioners have is that limits our ability to individualize care and also, most importantly, causes delays in our patients’ care,” said Shiven B. Patel, MD, MBA, FACP, assistant professor in the Division of Oncology in the Department of Medicine at the Huntsman Cancer Institute at the University of Utah.
In the most extreme cases, said Patel, patients die waiting to get certain drugs approved. He gave the example of patients he’s seen with lung cancer who have metastasis in the brain and need oral chemotherapy but have died waiting sometimes 4 to 6 weeks to get them approved.
The Huntsman Cancer Institute has hired a pharmacist whose sole job is to deal with the prior authorization process and patient assistance programs, “so our institutional costs are going up because we’re hiring people just to help our patients access these meds,” said Patel.
With stories like this and others, states around the country have taken the initiative to regulate these utilization management strategies. John Cox, DO, MBA, FACP, FASCO, medical director of Oncology Services at Parkland Health and Hospital System, University of Texas Southwestern, explained that the legislature recently passed several bills dealing with step therapy, one of which prohibits step therapy in metastatic breast cancer.6
Levine said Massachusetts currently has a bill pending that would implement a series of guardrails for step therapy, including allowing an exemption if it’s part of an approved clinical guideline, allowing physicians to override the step therapy in certain instances, and implementing tight time frames for utilization management decisions to be made.
1. DiGrande S. Louisiana chooses Asegua to partner for Netflix subscription model for HCV treatent. The American Journal of Managed Care® website. ajmc.com/focus-of-the-week/louisiana-chooses-asegua-to-partner-fornetflix-subscription-model-for-hcv-treatment. Published March 27, 2019. Accessed July 24, 2019.
2. McDonough JE, Rosman B, Phelps F. Shannon M. The third wave of Massachusetts health care access reform. Health Aff. 2006; (suppl 1) doi.org/10.1377/hlthaff.25.w420.
3. Health Care Cost Growth Benchark. Mass.gov website. mass.gov/info-details/health-care-cost-growth-benchmark. Accessed July 24, 2019.
4. Massachusetts Health Policy Commission. 2018 annual health care cost trends report. Mass.gov website. mass.gov/files/documents/2019/02/20/2018%20Cost%20Trends%20Report.pdf. Published February 2019. Accessed July 24, 2019.
5. Bebinger M. Massachusetts moves to negotiate Medicaid drug prices. wbur.org/commonhealth/2019/07/22/massachusetts-budget-drug-price-controls. Published July 22, 2019. Accessed July 24, 2019.
6. Patt D. Prohibit step therapy in metastatic breast cancer. Texas Medical Association website. www.texmed.org/Template.aspx?id=50261. Published April 2, 2019. Accessed July 24, 2019.Since President Donald Trump took office, his administration has been granting states greater flexibility in how they address healthcare for their populations. This involves Medicaid work requirements, block grants, and short-term, limited duration (STLD) health plans.
On June 27, a panel of diverse stakeholders gathered at the National Comprehensive Cancer Network Policy Summit in Washington, DC, to discuss how shifting regulatory signals from both the federal government and from states has implications for patient access to high-quality cancer care. Panelists kicked off the discussion by outlining how states have leveraged Medicaid Section 1115 waivers to initiate different types of demonstration and research projects, such as Medicaid expansion and, more recently, Medicaid work requirements for certain populations.1
“I think it’s a larger trend of states looking at really beginning to diversify the Medicaid population more and to say, ‘We want to look at populations differently,’” said Nina Owcharenko Schaefer, senior research fellow at The Heritage Foundation. “Rather than having Medicaid as one program where we deliver [healthcare] to everyone, I think what we’re seeing is states taking a very active role in understanding the needs of the patients in Medicaid are very different from one another, and
that not every…Medicaid patient is the same as another Medicaid patient.”
A number of states have looked at different ways to diversify their programs, such as by examining cost sharing for some of the higher income levels in Medicaid, addressing behavioral health, and looking beyond the medical scope to alternative services. “From the patient perspective, flexibility is important and innovation is important; however, the concern—and we try to make sure there’s a clear balance—is the fact that you have to have flexibility but also make sure that patient access and access to quality care is not harmed,” said Keysha Brooks-Coley, MA, vice president of federal advocacy and strategic alliances at the American Cancer Society
Cancer Action Network. She noted that Medicaid work requirements, in particular, could hinder access for patients with cancer.
The panel also discussed block grants, which have not yet seen as much uptake as work requirements. In March, Trump released his budget for fiscal year 2020, which called for converting Medicaid to a system of block grants.2 On July 1, a law went into effect in Tennessee that directed the governor to submit a waiver to CMS to turn the state’s Medicaid program into a block grant. If approved, Tennessee would become the first state to make the transition.3
Block grants represent the concept that states should figure out what best serves the needs of their populations, said Ronald S. Walters, MD, MBA, MHA, a professor of clinical medicine in the Department of Breast Medical Oncology, Division of Cancer Medicine, at The University of Texas MD Anderson Cancer Center, Houston. The idea makes sense as long as guardrails are built to make sure essential health benefits are protected, he added. “States balance their budgets, so they are squeezed in figuring out how to take that dollar and make it spread everywhere,” Schaefer said. “You know where they don’t balance their budget? Here in Washington.”
Consequently, she said, states shift additional costs to the federal government. Block grants are one way to put the federal government on a more reliable and consistent budget cycle. Some states also favor block grants because they like the idea of having the freedom to use funding how they see fit, even if it means a different style of funding, she said. Brooks-Coley pushed back, arguing that there are a lot of concerns from the patient perspective. She posed the question: What happens when states run out of money or don’t have enough to provide certain care for their populations?
The panel also discussed Section 1332 waivers, which eliminate certain requirements of the Affordable Care Act (ACA) and allow states to pursue alternative coverage approaches in the exchanges and small group markets that are consistent with the goals of the ACA.
The Trump administration has fostered a broader interpretation of these waivers, providing states more leeway in developing initiatives. According to Schaefer, multiple states have now used 1332 waivers to do risk adjustment, such as by using funding that goes to the subsidies within the exchanges and redirecting it to insurance plans that have high-risk and high-cost populations. How and how often these waivers are used going forward will likely depend on the result of ongoing litigation involving the ACA, Walters said. In December 2018, a federal judge in Texas ruled that the ACA’s individual mandate is unconstitutional and the rest of the law must also fall. In March, the Department of Justice backed the ruling.4
Even if the entire legislation is struck down, innovation waivers like 1332 waivers will continue, Walters argued. “They may not have the strength of the ACA, but this is an ongoing effort to give states much more authority and leeway to design what’s important for that particular state,” he said. Bob Donnelly, MPP, senior director of health policy at Johnson & Johnson, also noted that ongoing efforts to erode the ACA are important in a system that now offers broader access to STLD health plans outside of what the ACA envisioned, which can create issues regarding benefits and the impact on risk pools.
In response, Schaefer argued that the plans offer opportunities for those getting “squeezed out of the current system,” including many middle-class families that don’t receive subsidies and are leaving the market as healthcare costs and premiums continue to rise. States have been on the frontline of this, seeing firsthand how their residents can’t afford coverage, Schaefer said, adding that STLD plans provide immediate relief to these types of consumers. However, she predicted that, because
of those plans’ limitations, associated health plans and health reimbursement accounts will be more popular.
Although beneficial for some consumers, these plans are offered to everyone, said Brooks-Coley, arguing that consumers will often buy into them without fully understanding what they are and what they offer. Consumers buy plans they believe are cheaper and then get stuck with high out-of-pocket costs after getting sick with cancer, she said. Rounding up the conversation, the panel touched briefly on value-based contracts, which have been touted as a way to address the high costs of cancer drugs, among others.
“There are still a lot of nuances to value-based contracting that people have to get experience in exactly how to do it. Intuitively, it seems very easy to do until you get into all the details, and it gets complicated very quickly,” Walters said. Donnelly agreed, adding that it is early in the playing field and that evaluating these contracts is just as important as actually enforcing them so that states can learn what works and what doesn’t.
1. AJMC staff. Tracking Medicaid expansion. The American Journal of Managed Care® website. ajmc.com/newsroom/tracking-medicaid-expansion. Updated June 25, 2019. Accessed July 16, 2019.
2. Rosenberg J, Inserro A. Proposed 2020 White House budget includes block grants, Medicaid work rules, increased HIV funding. The American Journal of Managed Care® website. ajmc.com/focus-of-theweek/proposed-2020-white-house-budget-includes-block-grantsmedicaid-work-rules-increased-hiv-funding. Published March 11, 2019. Accessed July 16, 2019.
3. Pradhan R. Tennessee will ask Trump to OK first Medicaid block grant. POLITICO website. politico.com/story/2019/05/03/tennessee-trumpfirst-medicaid-block-grant-1410949. Published May 3, 2019. Accessed July 16, 2019.
4. Ross J. DOJ backs court ruling that ACA must be struck down. Jurist website. jurist.org/news/2019/03/doj-backs-court-ruling-that-acashould-be-struck-down/. Published March 26, 2019. Accessed July 16, 2019.