Second annual release provides clearer look into Part D costs

CMS’s second annual release of privacy-protected data details information on prescription drugs paid under the Medicare Part D prescription drug program. The data provides key information to consumers, providers, researchers, and other stakeholders to help transform the health care delivery system. With data from 2013 and 2014, CMS will now be able to analyze trends, prescribing habits for specific providers, brand versus generic drug prescribing rates, and state- and local-level differences in drug utilization and costs.

The new release is based on 2014 data describing the specific medications prescribed for 38 million enrollees in Medicare Advantage (MA) prescription drug plans (PDPs) and stand-alone PDPs. The 2014 data set includes new aggregated information on opioids, antibiotics, antipsychotics, and high-risk medications among the elderly. A prescriber enrollment status field has also been added to the 2014 data set to indicate whether the prescriber is enrolled, is not enrolled, or opted out of the Medicare program.

Public data set

The public data set, the Medicare Provider Utilization and Payment Data: Part D Prescriber Public Use File (PUF), was created by CMS using information on prescription drugs prescribed by individual physicians and other health care providers and paid for under the Medicare Part D. The Part D Prescriber PUF is based on information from CMS’ Chronic Conditions Data Warehouse,which contains prescription drug event records submitted by MA-PD plans and by stand-alone PDPs. The dataset identifies providers using their National Provider Identifier and presents the specific prescriptions dispensed at their direction, listed by brand and generic name.

For each prescriber and drug, the dataset includes the total number of prescriptions dispensed and the total drug cost. The total drug cost includes the ingredient cost of the medication, dispensing fees, sales tax, and any applicable administration fees. The total cost is based on the amounts paid by the Part D plan, Medicare beneficiary, other government subsidies, and any other third-party payers (such as employers and liability insurers). Total drug costs do not reflect any manufacturer rebates paid to Part D plan sponsors through direct and indirect remuneration or point-of sale rebates.

Drugs by claim count

For 2014, the top 10 drugs based on claim count were generic drugs, and the top nine drugs were among the drugs with the highest claim counts in 2013. The 2014 claim counts for these drugs ranged from 22.1 to 38.3 million claims,andthe total drug costs for each drug ranged from $136 million to $748 million. From 2013 to 2014, the total number of claims increased from 1.37 billion to 1.42 billion, a 3 percent increase from 2013 to 2014.

Drugs by cost

The drugs with the highest cost in 2014 were all brand name drugs. In 2014, Solvaldi® (Hepatitis C antiviral) had the highest total drug costs at $3.1 billion, with the costs for each of the top 10 drugs all more than $1 billion. Total drug costs increased from $104 billion in 2013 to $121 billion in 2014, reflecting a 17 percent increase.

Lantus Solostar® and Lantus® insulin products had the highest growth in total drug costs between 2013 and 2014 with growth rates of 47 percent and 32 percent, respectively. Abilify® (antipsychotic), Januvia® (diabetes), and Revlimid® (cancer) also had high growth rates of 20 percent or higher. Advair Discus® (asthma and COPD) had a very low growth in total drug costs of only 1 percent.

Antibiotic prescribing

The new 2014 dataset also can be used to examine patterns of antibiotic prescribing in the Medicare program. These data can inform where high rates of antibiotic prescribing are occurring across the U.S. The 2014 data shows that states in the South and Midwest have rates of antibiotic prescribing that are higher than the national average of 1.39 fills per beneficiary.

Florida health care provider settles monopolization, conspiracy claims

Health First, Inc. and its subsidiaries have settled allegations that they attempted to establish a vertically integrated, self-reinforcing, illegally-maintained health care monopoly in Southern Brevard County, Florida. Just days after denying Health First’s motion for summary judgment, the federal district court in Orlando dismissed the antitrust claims with prejudice.

Omni Healthcare, Inc. and other physicians and physician practice groups filed suit against “fully integrated” health care corporation Health First, Inc. and three of its wholly owned subsidiaries: Holmes Regional Medical Center, Inc.; Health First Health Plans, Inc., and Health First Physicians, Inc. Omni alleged that Health First engaged in an anticompetitive scheme to monopolize Southern Brevard County’s interrelated health care markets for years and that the scheme has largely been successful.

The court denied Health First summary judgment on August 13, 2016, finding that Omni and other physicians and physician groups created genuine issues of material fact in whether Health First monopolized, attempted to monopolize, and conspired to monopolize the markets for physician services, Medicare Advantage, and ancillary services.

Highlight on Kentucky: Bevin’s proposed Medicaid waiver hits snags

Kentucky Governor Matt Bevin’s (R) administration will be making some changes to its Section 1115 waiver, known as the Kentucky Helping to Engage and Achieve Long Term Health (HEALTH) demonstration project. The proposal, which was published in June, saw pushback from the federal government and health advocacy organizations for Bevin’s plan to undo Medicaid expansion under the Affordable Care Act and for some of the HEALTH project’s provisions that would add work or volunteer requirements for some Medicaid recipients.

Kentucky HEALTH proposal

If CMS approves the Section 1115 waiver for Kentucky HEALTH, the state’s Medicaid program would include a work requirement and the payment of premiums. The state sees Kentucky HEALTH as temporary coverage for able-bodied adults without health coverage through an employer. It would require such beneficiaries participate in “community engagement” activities, which include employment or job training, job searching, and volunteer work, for five hours per week after three months of program participation. This requirement ramps up to 20 hours per week after 12 months. All beneficiaries, excluding pregnant women and children, would be subject to a flat monthly premium, established on a sliding scale based on the individual’s income level. For more on the proposal, see Kentucky Medicaid proposal includes community engagement, employer program, premium requirements, Health Reform WK-EDGE, June 29, 2016.

Criticism of plan

The Kentucky HEALTH plan has faced criticism from multiple sources. In June, HHS Secretary Sylvia Burwell responded to an open letter from Bevin’s predecessor, former governor Steve Beshear (D), saying that CMS evaluates Section 1115 waiver proposals based on access to coverage and affordability of care. Burwell wrote, “states may not impose premiums or cost sharing that prevent low-income individuals from accessing coverage and care, nor may they limit access to coverage or benefits based on work or other activities.” She explained that the waiver proposal had not yet been submitted, but that the agency was committed to working with Kentucky to reach a solution.

The Kentucky Equal Justice Center submitted extensive comments on the HEALTH plan, calling the proposals in the plan “at least a step removed” from the state’s goals with the plan, and wrote, “We suggest that the framers of the waiver consider a different premise: health coverage and care are work supports rather than work substitutes.” The Center also pointed out the logistical challenges of the community service requirements in the proposal, by doing some quick mathematical calculations. In its hypothetical, the Center laid out a scenario where 100,000 Kentuckians statewide are covered for a year and have a 20-hour work requirement–creating 2,000,000 hours of work activity in a single week to arrange, track, and enforce. Even on a much smaller scale, such as 10,000 individuals with the 20-hour requirement, the state would need to find 10,000 nonprofits to take one volunteer each, or 1,000 nonprofits to take 10 volunteers.

The Kentucky Nonprofit Network raised similar concerns in its comments, writing that “supervising, training and managing volunteers requires nonprofit resources of staff, time, funding and expertise.” The Network shared a sampling of comments received from its member organizations regarding the costs and burdens that would be put on nonprofits as a result of the proposed requirement.

State response

Originally, Kentucky planned to accept comments through July 22, 2016. It later extended the comment period through August 14, giving the public an additional three weeks to submit its views on the proposal. Soon after the extended comment period ended, state Cabinet for Health and Family Services Secretary Vickie Yates Brown Glisson told the Kentucky legislature’s Medicaid Oversight and Advisory Committee that, based on the comments received, the Bevin Administration would be making changes to the HEALTH proposal, but that it was too early to detail what those changes would be.

Based on Burwell’s statement in her letter to Beshear that most Section 1115 waivers take six to 12 months to implement after submission to CMS, it is unlikely that Kentucky’s Medicaid expansion coverage will be changing in January 2017.

Kusserow on Compliance: CMS extends and expands enrollment moratoria in six states

CMS announced that it is extending for six months its temporary provider enrollment moratoria efforts in six states, as means to control fraud.  The agency is also expanding statewide the temporary provider enrollment moratoria on new Medicare Part B non‑emergency ground ambulance suppliers in New Jersey, Pennsylvania, and Texas and home health agencies (HHAs) in Florida, Texas, Illinois, and Michigan.  This statewide expansion also applies to Medicaid and Children’s Health Insurance Program (CHIP).  CMS also announced the Provider Enrollment Moratoria Access Waiver Demonstration (PEWD), which gives CMS the ability to allow for provider and supplier enrollment exceptions in the moratoria areas if accesses to care issues are identified and for the development and improvement of methods of investigating and prosecuting fraud in Medicare, Medicaid, and CHIP.  The agency will also immediately lift the current temporary moratoria on all Medicare Part B, Medicaid and CHIP emergency ground ambulance suppliers.  The purpose of these actions is to focus on identifying parties engaged in fraudulent practices and to find means to better control the programs against such actions.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.