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Specialists Fear IPI Drug Pricing Model Could Harm Patient Access

The proposed International Pricing Index (IPI) drug pricing model would increase administrative burdens on providers without the proper reimbursement bump, ACR argued.

International Pricing Index (IPI) drug pricing model and patient access to care

Source: Thinkstock

By Jacqueline LaPointe

- A healthcare industry group representing more than 7,700 rheumatologists and rheumatology health professionals recently warned the Trump Administration that its proposed International Pricing Index (IPI) drug pricing model for Medicare Part B could hinder patient access to care.

“We appreciate the opportunity to provide input on the proposed IPI model and are encouraged by the agency's efforts to make needed therapies more affordable for patients,” Marchetta, MD, MBA, President of the American College of Rheumatology (ACR), wrote in a Dec. 27, 2018, comment letter. “However, we believe that changes must be made to ensure the proposal does not result in significant disruptions in patient care for the 54 million Americans who live with a rheumatic disease.”

HHS proposed the IPI drug pricing model on Oct. 25, 2018. The advance notice of proposed rulemaking (ANPRM) explained that the model would be a mandatory demonstration testing whether gradually lowering Medicare reimbursement for certain Part B drugs to rates close to international prices would improve prescription drug spending.

The IPI drug pricing model, which would launch in spring 2020, would lower prices by transferring the procurement, distribution, and billing of physician-administered drugs to private sector vendors. The model aims to boost competition by leveraging the negotiation power of vendors.

Notably, the model would also reduce provider reimbursement for drug administration by 30 percent over five years, according to the specialists.

READ MORE: Would the IPI Model Reduce Medicare Reimbursement for Providers?

The American College of Rheumatology, however, is saying the proposed IPI drug pricing model could limit patient access to specialty care by increasing the financial and administrative risk associated with physician-administered drugs, like those used to treat rheumatoid arthritis and other inflammatory diseases.

“We are concerned that the administrative difficulties that would be associated with utilizing vendors could lead some practices to lose the ability to provide infusion services,” Marchetta wrote. “Specifically, we are concerned that the added administrative burden of proposed interactions with the vendors in the model exceeds any inherent benefits to practices.”

The mandatory model could negatively impact practices, especially those in rural settings, by requiring them to change how they administer drugs to patients.

The practices have already invested in processes such as drug acquisition, storage, inventory, appointment scheduling, HIPAA compliance, billing, and electronic record documentation. They have also invested a significant portion of their reimbursement for drug administration into enhancing patient experience and outcomes, the group contended.

“The IPI model, as we understand it, would give vendors control over drug distribution and patient access, and potentially force practices to stop providing these services because of the untenable reduction in reimbursement by 30 percent over five years,” Marchetta elaborated. “According to page 31 of the IPI-ANPRM, the add-on payment amount for providing a drug would be tied to the previous year's average sales price (ASP) plus 6 percent calculations, and ASP would likely be reduced as the IPI model reduces drug prices.”

READ MORE: The Difference Between Medicare and Medicaid Reimbursement

The add-on payment would also likely be offset by the additional vendor fees and increased administrative burden of working with vendors, collecting patient-cost sharing for vendors, and inventory maintenance, the group added.

The IPI drug pricing model should also be voluntary, the comment letter added. In general, the American College of Rheumatology does not support mandatory demonstration projects. And the IPI drug pricing model is no exception.

“Our current policy is that we support Medicare having the ability to negotiate for reduced drug prices; however, there are many specific pricing mechanisms described in the IPI-ANPRM that the ACR cannot support without having specific details on the policy,” Marchetta explained. “Further, the ACR respectfully disagrees that the small differences in provider reimbursement between similar rheumatology treatments (all of which have differences among them of less than ~$200 per patient per year) influence drug utilization. We request to see data supporting this claim.”

While the group advised HHS to make the proposed model voluntary in the spring of 2020, the specialists also recommended the following modifications to improve the new Medicare Part B reimbursement model:

  • Give providers a way to exit the demonstration if they realize financial losses under the model
  • Provide incentives for participation that could increase gross reimbursement
  • Increase provider reimbursement to pay for any additional expenses related to working with vendors, such as arranging orders, accepting delivery, processing patient paperwork with protected health information, and paying vendor fees
  • Have vendors collect patient cost-sharing or pay provider fees for cost collection
  • Increase provider reimbursement based on an acceptable inflation index rather than lowering reimbursement as average sales price drops under the phasing in of new drug prices
  • Track impact of demonstration on patient access to care

Additionally, the group called on HHS to consider exemptions from the model for segments of the market where average sales prices are similar.

READ MORE: Prescription Drug Rate Growth to Slow in 2019, Increasing 4.92%

“Some protections may be needed to ensure an incentive for existing manufacturers to lower price as well as new market entrants to start with a lower price,” Marchetta stated.

HHS closed the comment period on the advance notice of proposed rulemaking on Dec. 31, 2018. The federal department will consider comments from groups like the American College of Rheumatology and officials expect to issue a proposed rule in the spring of 2019.


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