Part D Upheaval: Why the Cancer Community Needs to Pay Attention

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Welcome to Value-Based Voices, a podcast from the Association for Value-Based Cancer Care.
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Each episode dives into the shifting terrain of cancer care in the United States, exploring what value means in today's clinical, policy, and patient-centered environments.
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Our mission is to spark informed dialogue, promote transparency, and equip every stakeholder from providers to payers to patients with the insight they need to navigate cancer care with clarity, confidence, and purpose.
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My name is Jason Slanik, a partner at Health Policy Strategies and ABBCC board member, and I'll be your host for this episode.
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Today I'm speaking with a good friend of mine, Joel White, who's a partner and healthcare lead at Monument Advocacy and a familiar face amongst the ABBCC crowd.
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Today you're going to hear about the history of the Part D program as Joel was one of its principal authors, some of the changes and tweaks that have occurred over time, and unfortunately, some of the challenges that Part D program now is facing for patients, and maybe even some solutions.
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I'll tease that out for you in the crowd as we head into the podcast.
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Welcome to the podcast.
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That program uh bought down premiums uh for plans and beneficiaries.
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The practical impact means that all the risk is on plans to cover most expensive drugs.
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And what we're expecting is premium increases, out-of-pocket cost increases, but more importantly for cancer, a lot more aggressive management of formularies and more step therapy, more prior authorizations, more utilization management, probably narrower formularies.
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So getting access to cancer therapies is about to get a lot more difficult on Part D.
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So way to hit us right over the head, right?
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So as Joel, as you just mentioned, right, we are facing uh certainly as soon as 2027 a lot of more intense utilization management, to say it briefly.
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But before we discuss a little bit about solutions and how the community can prevent some of this from happening uh and and some policy ideas going forward, let's take a step back and educate our audience on how we got here.
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Those of you may not know, Joel's gonna introduce himself a little bit more uh with more detail and thoroughly in a few minutes here.
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Joel is one of the principal authors of the Medicare Party program way back when.
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He was about 12 years old.
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Uh he was already working on the Hill in the early 2000s and was a major author of the Party program.
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And Joel, before I kick it over to you, I would like to say that I think the Party program is one of the most successful pieces of legislation in the history of healthcare legislation.
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And I was working alongside Joel, I was already at the Biotechnology Innovation Organization at the time, and the amount of times that I heard from biotech companies how great the Party program was was incountable.
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The overwhelming settlement was by providing a pharmacy benefit to Medicare patients, not only were you doing them a great service for the near for the now by giving them access to drugs at that moment, you instigated, ignited a generational change in drug discovery.
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That the manufacturers now knew that if they sunk their teeth into it and developed self-administered oncology therapies, there would be a way for Medicare patients of all kinds to access those drugs.
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And it's true, and it has been true, and it continues to be true, which is in part how we got here, which you're going to describe in a minute, because the law went into effect in 06 for those of you who are new to this, uh, new to this timeline.
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And as you know, it takes eight, ten, twelve years for drug discovery to really hit its peak and get rolling, which puts us into 14, 15, 16 in the last 10 years, where we have seen tremendous development in oncology therapies, turning it from a death sentence into a chronic illness.
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And to some extent, what Joel mentioned, the problems we have now are good problems to have, which means we have a lot of specialty drugs treating cancer and access to the drugs is the issue, not having the drugs being the issue.
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So that's my my editorializing for now.
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Uh so one congratulations on getting that done, and I have full confidence in how you're gonna figure out how to solve the the growth curve that you're about to describe going forward.
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So, Joel, over to you.
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A couple of words about who you are and sort of why you guys and how you designed the original Part D program, the changes that uh that were made, and then I'll ask some questions and then we'll get into you know the solutions going forward.
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Take it away.
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Yeah, thanks, and and great to see you as well.
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I think uh 20 years of the Part D benefit, and we've known each other probably longer than that.
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Um, you know, we started working on this in the late 90s, and if you think about drug discovery and innovation and products on the market at that time, it wasn't as robust as it as it is today.
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And I think you're right, the Part D program having a place for Medicare coverage where sick people, older people, um, disabled people can access the therapies they need to get or stay healthy really produced a medical revolution in the world that is now leading to uh potential cures for type 1 diabetes, multiple cures for cancer, cancer as a chronic condition.
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Um, it's exciting stuff.
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It's exactly what we want out of our health system.
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Um and I think the way we we set things up in in 2003 when we passed the law, and then the benefit came online in 2006, was uh broad access to drugs and a subsidy that was available to everyone.
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Uh, and then picking up all of the all or most of the costs for the low income, and then for the sickest patients, picking up most of their costs, but requiring some skin in the game above a catastrophic limit.
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And uh then the Affordable Care Act came into play.
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And we're gonna be able to do that.
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Okay, Joe, before you get there, give a little bit more about because we're gonna get into the concepts of subsidy, give a little, give the audience a little deeper dive on what you mean by subsidy, the way the benefit is designed for car sharing purposes.
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Because you we you it was originally designed for just that, to have some skin in the game, right, and for everybody.
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So give us a little bit more detail and then we'll get into the Affordable Care Act.
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Yeah, and and I think at the time, like most people said this uh Part D program wasn't gonna work.
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What we were basically doing was instead of just adding a new benefit into fee for service, we were gonna contract with plans in a competitive market to deliver a benefit that ultimately would over time drive down costs and premiums and out-of-pocket costs for consumers as the plans competed for people's lives and their business.
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And um what we basically did was set up a basic benefit, a structure, and we said plans could vary the coverage around that basic benefit, an actual value.
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And uh it came with an initial deductible, uh, an initial coverage phase, and then a gap, and then a coverage above a catastrophic limit.
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And at the time I got yelled at by a bunch of PBMs and health plans, and they said, You're crazy, this is like providing haircut insurance.
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I said, I'm bald, I don't know what you're talking about, haircut insurance.
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Um, but it basically you couldn't insure this risk.
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It would be like dollar trading or worse.
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And turns out a couple hundred or thousand thousand or so plans entered the market to provide these benefits, and the the benefit just took off uh to the point where we now have 56 million people in the Part D benefit, which is pretty exciting.
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But most seniors signed up and um they went to the pharmacy to get their drugs or they got it through the mail, and um they paid a premium every month, and then uh, you know, some zero dollar deductible plans, some basic deductible plans, but the coverage was basically very broad.
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Most beneficiaries fell below the catastrophic limit or the dollar limit um uh before m uh taxpayer costs really kicked in, taxpayer subsidies really kicked in.
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Um, and their premiums were subsidized.
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Uh so we paid 74.5% of people's premiums to encourage them to sign up.
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And then if you were low income, we paid 100% of the premium.
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So that there was no risk in covering the very low-income people.
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And uh so that encouraged most people to get in the market.
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The plans wanted to cover those lives and make some money, but they knew they had to compete against each other.
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Um, and so what we did was we set the taxpayer's subsidy uh against the bid amount from the plan, and the plans bid based on what they thought it would cost them to deliver the basic benefit.
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So as the plans competed, the bids went down over time, and the subsidy went down over time.
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So this was kind of a virtuous competitive market where we saw more competition, lower cost plans, more robust coverage, not a lot of management really, and just a really great design that produced some pretty, really stellar results for patients, sick patients like cancer patients, those with diabetes, chronic conditions.
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And Joel, before we get again to the Affordable Care Act, talk about how you guys kept the employers engaged.
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Because I remember that was a big concern of the federal government that all of a sudden all the thousands of employee retire retired employees at the time, they would just dump them off their books and put them in the Medicare.
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That was a really strategic, important decision.
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By the way, everybody, the structure Joel's describing is still in place today.
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It's pushing up against the outer limits, like we said, because of the success of the program, in my mind.
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But the employer piece was also an important piece that now exists in the program.
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So, Joel, give us some details on how you guys kept the employers engaged and continuing to provide the retiree benefits without overwhelming the federal government.
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Yeah, well, we had a lot of retirees who had benefits in their retirement from their uh former employer, a lot of union plans that were providing retiree benefits, and we didn't want to replace those plans and get them into the Medicare program if they got better coverage or uh equivalent coverage from their former employer.
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And there was a legal obligation there as well for some of those plans to continue to provide those benefits.
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So we wanted to recognize the cost there.
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And basically what we did was we we took the subsidy that we were giving in Medicare and converted it into an actual value or a value, dollar value, and then converted that into a percentage and gave that to the employers.
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And guess what?
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They kept their plans, and a lot of people benefited from more generous coverage um just by by providing that simple subsidy and and you know creating kind of a level playing field to say it doesn't make sense for me to drop my plan um because I'm getting this subsidy, and there was a tax benefit that came from that too.
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The subsidies dollars were tax-free to the employer.
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So um it worked really well.
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Um it massively um expanded coverage at a very low cost to taxpayers.
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And for the beneficiary, typical beneficiary, uh, even if you were sick, you were paying just five percent of the cost above the the catastrophic limit.
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So there was skin in the game.
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Um uh even if you got really sick, the low income were 100% covered with some min to minimus cost sharing uh per script at the pharmacy counter, and then everyone got a subsidy.
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So everyone jumped in the pool.
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The plans were happy to compete for that business.
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And like I said, because there was competition, there was uh lower costs generated year over year as that benchmark came down and the subsidy came down.
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So here we are in 2006.
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The program that you just described launches, and as the audience just heard, there was a subsidy uh for everybody premiums.
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There was this donut hole, there was catastrophic.
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We we the government took care of the Congress, really took care of the LIS, made sure their costs were de minimis, tried to keep it in retiree drug spend, and the benefit moves on its way.
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You've got drug discovery going, you've got launch of all kinds of oncology drugs, other specialty drugs, and along comes the Affordable Care Act.
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And the Affordable Care Act steps in and does what to the benefit design?
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Well, we had this thing called a donut hole, and um, it wasn't really a donut because there was like it was like a jelly donut.
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There was good things in the middle.
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Um by the way, sorry to interrupt anybody in the listening to the audience.
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This is Joel has been saying that line about jelly donut for 25 years.
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So it's true.
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It's true, right?
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If it works, you use it.
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Go ahead.
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Well, the reason there's good stuff in the middle, so so you pay your deductible if there's a deductible, uh, there didn't have to be a deductible, but if there was a duct, you paid your deductible, it was say up to 250, and then the plan uh picked up the costs uh 75% up to the initial threshold, and then coverage stopped.
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And uh the beneficiary was on the hook for the costs up to the catastrophic limit.
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But in that phase, that donut hole where there was no coverage, the beneficiary continued to get access to the negotiated discounts.
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So they got the lower costs uh on those drugs.
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They weren't paying the full retail price on those drugs.
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And then once they hit the catastrophic, they pay five percent.
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Um so what the the ACA did was it closed the donut hole over time by requiring uh manufacturer rebates or discounts within the the coverage gap?
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And those increased over time until it was fully phased out, I think in 2016.
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Um and uh you know that way there was uh coverage up through the initial threshold all the way to the catastrophic limit.
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Is hindsight 2020?
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Was that a good idea at the ACA?
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Was it a good policy to ratchet up manufacture contributions?
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Was that a good design at that point, or do you think we would have been better off tweaking some of the policy proposals we need to do now, back then regarding risk sharing, cost, you know, reinsurance, everything else?
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Was that the right policy decision at the time?
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I I don't think so, and here's why.
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What it did was it set up an oppositional environment between drug manufacturers and the plans.
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And up to that point, the manufacturers were kind of working with the plans um because the plans were covering their products, they were negotiating discounts, um, they were business partners, if you want to think of it that way.
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When the manufacturers moved into the ACA structure, uh it really became uh more management from the plans.
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And as we saw more innovative products come on the market and higher cost products come on the market, it really became a more of a rebate game.
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And those rebates were really fueling plan revenue.
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Um so I think it was a mistake because it created this misaligned business interest between the plans and the manufacturers to where the gaming started to happen.
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And and so I I think honestly, we should have just uh the authors of the ACA, it wasn't me, um, should have just uh extended the insurance coverage to close the donut hole versus requiring this kind of pay-to-play type scheme, which which created all these this gaming that was going on in the market, and then we saw the rise of utilization management strategies that were really um severe.
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Right.
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And to add to that, the ACA created right, obviously the exchanges and medical loss ratios, and now you've got the manufacturing on the D, and those plans are pro the same plans are providing both benefit designs, completely incentivizing the vertical integration that we have today.
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The consolidation and the vertical integration that continued to live in their oxygen off of rebates that just sort of continue, you know, became the problem we have now that most of us believe started at the ACA.
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I don't believe that they knew that that was gonna happen, but ultimately the ACA started us down this road with the combination of what you just described for part D, the standing up of the exchanges, this vertical integration, integration and rebate game.
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So that's slowly going on.
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Now remember, we got more and more specialty drugs coming in in part D, oncology, RA, MS, all of this.
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And then we get to the Inflation Reduction Act, which by the way did not reduce inflation.
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Did not do that.
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So, Joel, tell us what the IRA did, and then we're gonna get into more about now.
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We're gonna revisit what happened recently, as we did in the beginning of the of our podcast, and then what we can do going forward to ensure access for oncology drugs, because as the audience is now hearing, we're getting why we have greater and greater UM.
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So go ahead, Joel.
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What happened under the IRA?
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Yeah, so the IRA did uh two basic things.
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Uh first, it it completely redesigned the Part D benefit and how it's uh financed, who incurs liability and how that's all structured.
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And the other thing it did was it instituted price controls on drugs.
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Uh, basically said a federal bureaucrat's going to set the price uh versus having plans negotiate that price.
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And um so in 2024, it started to it eliminated the 5% cost share required from beneficiaries uh after the catastrophic threshold.
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In 2025, it instituted a hard uh annual out-of-pocket cap on drug spend at$2,000.
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This year that's$2,100.
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Next year it'll be$2,400, so it increases with inflation.
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Um but then in 2025, what it also did was it changed who pays what above that amount.
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And so uh insurers uh were picking up 20% of the cost of drugs above the catastrophic limit.
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In 2025, insurers picked up 60%, so it tripled their liability uh on uh a lower attachment point, essentially.
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So they got much more financial cost shifted onto them, and this is the real problem with the IRA.
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It didn't um, you know, most people think a$2,000 out of pocket cap great.
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Um, it didn't lower the cost of cancer care, it just moved it uh off of taxpayers and onto plans, and then plans very logically responded by putting that cost back onto patients.
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And for the sickest patients, the that they're getting the benefit of the$2,000 out-of-pocket cap, but everyone's kind of paying these higher premiums.
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And what we're also seeing in the market is higher cost sharing.
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So uh deductibles, especially in Medicare Advantage uh prescription drug plans, uh you know, used to be most plans were zero dollar deductibles.
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Now many plans, uh most plans have uh some deductible.
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Um cost sharing uh went from fixed co-payments and now they're migrating to coinsurance, where uh for your tier three or your preferred brand drugs uh is mostly coinsurance now or a percentage of the cost of the drug.
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Um and that's true of tier four and the specialty as well.
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So if you're a cancer patient, you're essentially paying a percentage of the cost of the drug, no longer a fixed dollar copay, which means um you're you're paying more per script out of pocket and you're paying much more in January, but you're hitting this$2,000 out of pocket cap uh quicker most people by September.
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That really um impacted the plan.
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Like I said, it shifted the liability on the plans.
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So their bids that I talked about, which used to be going down over time, and the taxpayer costs were going down, and uh the costs for beneficiaries were going down, uh the bids uh starting in 2004 started going straight up, and they've quadrupled uh uh over the past uh three years and into 2027, they'll quadruple.
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Um, which means um the costs to the plans are going up, and again, they're shifting those.
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Onto the premium payers and the patients who are ultimately paying the deductible.
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Right.
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And so as Joel just described, the Part D redesign had a lot of very positive attributes for patients.
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And creating the out-of-pocket maximum was a tremendous benefit for patients.
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And as we recently saw with the CBO, it was certainly underestimated on how much of a benefit it was for the patient with large the beneficiaries because there's been a lot more drug spend than the CBO had anticipated.
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Because it's really hard to calculate abandonment rate when a patient comes to under the old benefit design, couldn't afford it, walks away.
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Nobody saw that drug spend.
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And now with the availability of spreading out the payments over the year, a lot more patients are making them or using the benefit, which is which is great.
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And I argue that Congress knew this was going to happen to some extent, even though they didn't realize the direction and the magnitude, because they capped the premium increase in the law, right, by 6% year over year.
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So just to recap now, for those of you who are still paying attention from the beginning of the podcast, right?
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When I said to Joel, what just happened?
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We have some policies here that are now meeting at the end of the pool here.
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We have we just set up a whole bunch of swim lanes for you.
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We have a 6% cap on premiums.
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As Joel explained, we have much more drug spend going on.
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We had a demonstration program that Joel's going to about to explain to you that recently the government announced CMS is not participating anymore.
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So now, Joel, all these swim lanes are meeting now at the end of the pool now at one point.
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So describe now the magnitude.
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You were getting there with a four-fold increase in the bids.
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Give the audience now a few more detailed sentences about what this means when they wake up without any changes that we're going to describe in a few minutes.
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They wake up January 1, 2030.
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It's possible.
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Give us a sense of what you think the premium could be if it's unsubsidized, two$250.
00:24:09.519 --> 00:24:11.440
What is the out of pocket could be?
00:24:11.599 --> 00:24:13.680
What is the liability on the health plans?
00:24:13.839 --> 00:24:20.960
So just want the audience to get a sense of the magnitude of the issue that is now, you know, the swamp creatures are dealing with here.
00:24:21.359 --> 00:24:23.759
What do you what what what give us break it down for us?
00:24:23.839 --> 00:24:24.960
Give us some numbers.
00:24:25.519 --> 00:24:29.759
So as I mentioned, the plan bids quadrupled.
00:24:30.000 --> 00:24:34.079
So in 2024, they were$64 per month.
00:24:34.240 --> 00:24:38.319
That was the cost of the plan of providing the benefit, basically.
00:24:38.799 --> 00:24:42.319
Um in 2027, they'll be about$300.
00:24:43.440 --> 00:24:47.519
So four times uh more than four times higher.
00:24:47.839 --> 00:24:54.720
For the premium, um, it was about$47 uh dollars in 2024.
00:24:55.519 --> 00:25:03.279
This year, uh, without these subsidies that you were just talking about, that would be about$85, okay, on a monthly basis.
00:25:03.920 --> 00:25:06.960
So um more than double on the premium.
00:25:07.200 --> 00:25:13.279
And so I think we can expect at least another doubling of the underlying bids and the premiums.
00:25:13.440 --> 00:25:22.160
So maybe going to$170, maybe$200 a month on a basic Part D plan.
00:25:22.480 --> 00:25:22.799
Okay.
00:25:23.359 --> 00:25:34.400
That's with full deductible, which would be somewhere at that around a thousand bucks at that time, and um a much higher out-of-pocket cap, let's say like maybe around$4,000.
00:25:35.440 --> 00:25:38.799
Um these are numbers for 2030, right?
00:25:38.880 --> 00:25:39.519
Because$20.
00:25:40.160 --> 00:25:40.240
Right.
00:25:40.640 --> 00:25:44.960
So this is what the patients are gonna experience, and they're gonna be able to probably still smooth it, right?
00:25:45.119 --> 00:25:45.839
Spread it out.
00:25:46.000 --> 00:25:47.519
So just everybody understands, right?
00:25:47.599 --> 00:25:51.440
They premium$175 a month, which right now is about$47.
00:25:51.920 --> 00:26:04.559
Uh, their deductible, it could double or triple, and the the the out-of-pocket max, which is$2,700 for$27, could be$300,000,$3,100, or you know, even higher in 2013.
00:26:05.440 --> 00:26:05.680
Right.
00:26:05.759 --> 00:26:12.079
We're back where we were when Congress tried to fix this in a very short period of time.
00:26:12.640 --> 00:26:15.920
But but we we see a collapse in the plan market.
00:26:16.079 --> 00:26:23.440
So there's half as many plans this year as there were in um uh just 20 uh 24.
00:26:24.000 --> 00:26:34.880
And what we're seeing is um more than half of brand drugs are not covered under formulary, uh, although there's off-formulary exceptions.
00:26:34.960 --> 00:26:36.559
Um, but we're seeing a lot more management.
00:26:36.720 --> 00:26:45.039
So prior authorizations, step therapy, other utilization management tools uh that are making everyone's life a lot more difficult.
00:26:45.279 --> 00:27:02.079
So um this makes things a lot harder for sick patients in particular, uh, who are not just going to get their maintenance meds or statins or whatever uh at the pharmacy counter, those fall directly in hardest on cancer patients, diabetics, others.
00:27:02.559 --> 00:27:16.240
So as soon as 2027, Joel, we could expect, so the patients who are listening or the groups, providers, we should expect greater utilization management as soon as 2027 based on this recent announcement, correct?
00:27:16.559 --> 00:27:17.359
Oh, 100%.
00:27:17.759 --> 00:27:22.240
And and we're seeing the shift to coinsurance uh as one basic strategy.
00:27:22.400 --> 00:27:25.680
The formulary exclusions, uh, like I said, more than 50%.
00:27:26.079 --> 00:27:34.079
I think we can see higher than that, which means doctors are gonna have to go through the off-formulary exception process, which is not an easy process.
00:27:34.240 --> 00:27:41.440
Uh, more step therapy, so you got to go through the generics and all the other tiers before you get to the product that you might need.
00:27:41.599 --> 00:27:52.319
For a cancer patient, that means um, you know, your doctor is recommending the latest therapy, but like, what are you gonna do uh if your plan doesn't cover it?
00:27:52.559 --> 00:28:00.880
So the this these are real problems that real patients are gonna experience more and more as this market becomes less and less stable.
00:28:01.279 --> 00:28:05.279
So we got that's unfortunately the way it is gonna be, right?
00:28:05.359 --> 00:28:15.039
We got patients and providers, a lot more blocking and tackling, a lot more hand-to-hand combat with health plans, certainly starting next year and going forward.
00:28:15.680 --> 00:28:20.240
Congress is not a very proactive organization to say the least, right?
00:28:20.480 --> 00:28:27.119
Um, we've just laid out a couple of different reasons why we're heading towards a major event towards the end of the decade.
00:28:27.359 --> 00:28:36.160
I know you've started to think about solutions on where the Congress could step in, or maybe what's something CMS can do in the meantime.
00:28:36.400 --> 00:28:50.000
Um, help educate um our audience about what the are could be some short-term fixes that perhaps VBCC and the stakeholders we represent can start rallying and educating and promoting, and then maybe some long-term fixes.
00:28:50.079 --> 00:28:52.559
We have two different audiences, two different time frames.
00:28:52.799 --> 00:28:56.400
Audience again is Congress, CMS is the other audience.
00:28:56.480 --> 00:29:04.000
We've got a short-term fix to hopefully stem the um the rising tide of UM and access uh challenges.
00:29:04.240 --> 00:29:06.799
So give us uh however you want to answer the question.
00:29:06.960 --> 00:29:10.559
Do you want to do short-term first, long-term, some ideas around the edges?
00:29:10.720 --> 00:29:12.640
Give us what do you what are your thoughts?
00:29:13.039 --> 00:29:15.119
Well, uh just to get back to it, I think so.
00:29:15.200 --> 00:29:24.079
Once the IRA created this instability, CMS stepped in with a demo program, which just was recently announced that's ending at the end of 2026.
00:29:24.319 --> 00:29:33.359
That means the premiums that have been kind of masked and hidden that people actually uh weren't paying will now become the full premium that they'll pay.
00:29:33.519 --> 00:29:44.960
Uh and then in 2029, uh the law's uh subsidy buy down ends, it was a temporary thing, and and that'll be another kicker to increase the premiums.
00:29:45.039 --> 00:29:47.839
We'll expect more plans getting on the market, et cetera.
00:29:48.000 --> 00:30:00.400
So um if if you agree with the premise that really the IRA uh shifted too much risk onto plans that destabilized the market, you've got to address the risk component of this.
00:30:00.559 --> 00:30:09.440
Um and so um lowering the risk or managing it better at the back end is a longer-term solution because it's complicated.
00:30:09.519 --> 00:30:16.160
And it you're basically saying uh this group should pay less or this group should pay more, and that kind of thing.
00:30:16.319 --> 00:30:24.079
So I think uh adjusting that risk threshold above the catastrophic, the 60% is appropriate.
00:30:25.039 --> 00:30:35.839
Um creating uh risk adjustment um that would pay Part D plans more appropriately based on the severity of the patients they're covering.
00:30:36.000 --> 00:30:41.839
So if you're a cancer patient in a Part D plan, you're getting paid less than if you were in a Medicare Advantage plan.
00:30:42.000 --> 00:30:46.960
So stabilizing that and paying the Part D plans a little bit more appropriately is important.
00:30:47.680 --> 00:30:56.160
Um risk pooling, which is a concept in um commercial markets, the ACA, several states operate risk pools.
00:30:56.400 --> 00:31:00.720
Um to kind of stop the bleeding on the plan side would restabilize things.
00:31:00.880 --> 00:31:12.400
And then if we're gonna be explicit about it, like um there's a about an 85 to 90 percent subsidy rate on the premium right now with all these different premium subsidies.
00:31:12.559 --> 00:31:15.519
You could just pay the plans more and be done with it.
00:31:16.000 --> 00:31:22.079
Um that doesn't change the underlying challenges long term with Part D.
00:31:22.160 --> 00:31:26.720
It just you know shifts the cost more onto taxpayers, but that would be another strategy.
00:31:27.119 --> 00:31:37.279
I think short-term CMS could fix the uh risk adjustment problem uh through regulations, and they're they're working on that now.
00:31:37.680 --> 00:31:42.720
Um I think that the smoothing program is a really good idea.
00:31:43.039 --> 00:31:50.559
Um the the challenge is only about one and a half percent of patients have picked that up because it's made it's really hard to sign up for it.
00:31:50.640 --> 00:31:57.599
You gotta basically wait, you got a waiting period of 24 hours when you already give your consent, and some patients don't even know it's there.
00:31:57.759 --> 00:32:07.359
So make it available at the point of sale when you walk into the pharmacy, you can spread your costs out on a monthly basis over the year and do that way.
00:32:07.599 --> 00:32:12.079
Uh other people have talked about adjusting the risk corridors and things like that.
00:32:12.160 --> 00:32:20.480
I think CMS has authority to do that, and that would um adjust plan risk uh um to make it a little bit more stable.
00:32:21.039 --> 00:32:32.720
And to your point, Joel, I I do think what you and what's scary, what keeps us up at night, what people may not appreciate, and you may be sitting there saying, yeah, it's okay, CMS can kick the can, it's not a big deal.
00:32:32.960 --> 00:32:35.440
But and then I'll get your thoughts on this, Joel.
00:32:35.680 --> 00:32:41.440
The what people may not realize is that there is a public option available here.
00:32:41.759 --> 00:32:48.319
And as Joel mentioned, the amount of health plan choice is dwindling uh rapidly.
00:32:48.559 --> 00:32:55.519
And we have some communities where there are barely a handful of choices for Medicare patients.
00:32:55.759 --> 00:33:06.559
And Joel will tell you, because he wrote it, that the law provides for CMS itself to run a PDP under certain circumstances in a given community that Joel's going to describe.
00:33:06.880 --> 00:33:25.920
And so, for those of you who would rather have the private sector administer the drug benefit and compete on prices and compete on quality, we need action now for CMS to tweak this or aggressively fix the model design to keep health plans in these communities.
00:33:26.160 --> 00:33:31.680
Otherwise, you're going to have the government run a PDP plan.
00:33:31.759 --> 00:33:36.000
You're going to have the government deciding what drugs patients get.
00:33:36.640 --> 00:33:45.039
And um we have yet to see if, at least in my lifetime, a federal program where they completely run something like that actually succeed.
00:33:45.279 --> 00:33:46.480
But that's my bias.
00:33:46.559 --> 00:33:58.400
But I'm curious, so Joel, give us a little a little bit of background on the public option and then why the sense of urgency really is there in terms of plan choice and why the agency should act very soon.
00:33:59.119 --> 00:34:11.119
Yeah, well the cost of getting this law over the finish line on a bipartisan basis was that we had to include the fallback plan.
00:34:11.360 --> 00:34:34.079
And basically that's a provision of Part D that says if there aren't plans in a service area uh offered by you know insurers, because again, it was a question would these plans actually offer benefits across the country in in every area of the country so that it was a real entitlement, um then uh CMS would run the benefit.
00:34:34.400 --> 00:34:48.159
Uh and what what we're looking at for 2027, on you know, as plans got out of service areas uh since 2024, we're starting to see some counties kind of on the brink of only having one plan.
00:34:48.480 --> 00:34:54.960
If we have bare or naked counties in 2027, CMS will run the benefit, essentially.
00:34:55.119 --> 00:35:10.559
And if you think about um that combined with the fact that CMS is now setting the price uh for the highest cost, highest spend drugs in Part D, they're now setting the price and they're delivering the benefit.
00:35:10.719 --> 00:35:30.800
And that means the government is basically running this program and can make decisions about who gets what, when, where, and why, and whether that benefits sick patients or maybe they want to uh make sure it's broadly available and they don't really care about how much of the drugs are covered, uh, et cetera.
00:35:30.960 --> 00:35:42.639
At least in the marketplace, when you have a choice across plans, if a plan is really skimping on formularies or aggressively utilizing the benefit, beneficiaries can vote with their feet and go to another plan.
00:35:42.800 --> 00:35:49.119
If there's only one plan and the government's running it and they decide they want to skimp, you have no other options or no other choices.
00:35:49.360 --> 00:35:51.920
So this fallback plan is a real threat.
00:35:52.159 --> 00:35:58.639
And you know, my concern is that it then becomes a model for other markets and across the country.
00:35:58.719 --> 00:36:08.480
We have we see, you know, quite frankly, Democrat socialists who are advocating uh one plan for everyone, which could be a very skinny plan indeed.
00:36:08.719 --> 00:36:11.920
So uh it's it's a real problem that needs to be addressed now.
00:36:12.079 --> 00:36:20.880
If it's not addressed now, we could find ourselves in 2027, 2028 with these mini public options all over the country in Medicare.
00:36:21.360 --> 00:36:35.280
So we've spent um our time together talking about the history of Part D, uh the tremendous benefit it provided for science and innovation for Medicare patients, but it came it came at a cost.
00:36:35.599 --> 00:36:38.880
It came at a cost of a good cost, in my opinion, right?
00:36:39.039 --> 00:36:45.440
Beneficiary, better drugs, longer cost, better uh better drugs, better quality life, living longer.
00:36:45.679 --> 00:36:54.559
Um, and we've described some of the structural flaws that in that tweaks to the benefit design have occurred over time.
00:36:54.800 --> 00:37:02.480
And then finally, we concluded with wow, we have some real emerging immediate issues that need to be addressed.
00:37:03.039 --> 00:37:13.119
So, as we wind up here, your thoughts on in the next couple of weeks, CMS is gonna issue a proposed rule to start regulating 2028.
00:37:13.599 --> 00:37:18.000
CMS is gonna talk about benefit design, as you as you and I have just discussed.
00:37:18.079 --> 00:37:24.079
There are gonna be star ratings in there and changes in implementation on PBM reform that have occurred recently.
00:37:24.880 --> 00:37:48.079
Give our audience two or three concepts, ideas that they should be thinking about right now that they can weigh in on when this proposed rule comes out that will protect beneficiary access that CMS has the authority to do, at least in the near term, while the Swamp tries to deal with some of the bigger systemic issues through the Congress.
00:37:48.320 --> 00:37:48.880
What is it?
00:37:49.039 --> 00:37:53.519
Should they be arguing for MAPDP to have a separate bids from PDP?
00:37:53.599 --> 00:37:54.960
Should it be on the risk corridor?
00:37:55.119 --> 00:37:59.599
Should it be on you can't fail on two generics before you get a branded?
00:37:59.679 --> 00:38:02.559
You know, so I'm just throwing some ideas to get the juices going.
00:38:02.880 --> 00:38:13.280
What is your advice to our stakeholder audience that's gonna know that this bill is out, they're gonna see the headlines, and they're gonna be like, okay, this is what Jason and Joel were talking about.
00:38:13.440 --> 00:38:20.400
These are the three things I'm gonna get my group to weigh in on to protect access to um innovative oncology therapies.
00:38:20.639 --> 00:38:21.679
What are your thoughts?
00:38:22.000 --> 00:38:29.119
Yeah, I think uh for the this is for 2028 plan year, where part B drugs will be in the drug price negotiation program.
00:38:29.360 --> 00:38:42.079
So I'd love to see some protections built in in the MAPD uh market that says if you're a price controlled drug, you can't go, can't be required to go through some of this utilization management nonsense.
00:38:42.400 --> 00:38:59.920
SEP therapy and and you know, maybe prior authorization is okay to ensure medical clinical compatibility, but um, you know, more protections for patients to have access to the therapies that they need, particularly around those drug price negotiated products.
00:39:00.400 --> 00:39:11.920
Uh the second thing I think is that they really need to fix the risk adjustment to restabilize the market and kind of equalize the playing field between standalone plans and Medicare Advantage PDPs.
00:39:12.159 --> 00:39:30.559
Um the third thing I would say is that um uh they they really need to um uh figure out uh how the subs the the costs are being counted against the catastrophic limit.
00:39:31.360 --> 00:39:40.559
And by that I mean um people are getting to that limit very quickly um because the cost the full cost of the drug is kind of counted against the threshold.
00:39:40.800 --> 00:39:44.800
So um I think something there would help restabilize the market.
00:39:45.599 --> 00:39:49.599
Joel, before you continue to number four, let's give a little bit of an example.
00:39:49.760 --> 00:39:53.199
So what I'm hearing you say is so everybody knows, right?
00:39:53.360 --> 00:40:00.800
Joel mentioned 2,000 was for 25, it's 2,426, and 27 is gonna be 2,700.
00:40:01.119 --> 00:40:05.360
It's the drug cost, the total drug costs go against that, right?
00:40:05.440 --> 00:40:07.519
It's occurred drug spend.
00:40:07.840 --> 00:40:19.119
And what we are just mentioning here, it's basically its sticker price that is accruing to that drug spend, but that's not a lot of what is actually paid in the system.
00:40:19.440 --> 00:40:32.480
There are, like we mentioned before, some rebates and some discounts that that are applied to that drug cost through the system, and that all that number is the number that should be counted towards that out-of-pocket.
00:40:32.639 --> 00:40:36.480
It'll slow some of the hitting of the up until that catastrophic.
00:40:36.880 --> 00:40:39.360
It'll ease some of the benefit, is the thinking.
00:40:39.519 --> 00:40:40.800
Do I have that correct, Joel?
00:40:41.039 --> 00:40:41.760
That's right.
00:40:42.079 --> 00:40:48.400
Um, and you know, for your cancer patient, you're gonna hit that out-of-pocket limit, I think, no matter what you do.
00:40:48.559 --> 00:40:51.840
But this really would would restabilize some of that plan market.
00:40:51.920 --> 00:40:59.199
Um, I would I would just point out Congress enacted PBM reform, which impacted Part D and commercial market.
00:40:59.440 --> 00:41:04.000
Um, and there's gonna be other revenue streams brought into play here.
00:41:04.079 --> 00:41:18.320
And I think guaranteeing pharmacy access uh is is really important, something that CMS can do in this rule to make sure that that people have uh access and that pharmacies are being reimbursed appropriately uh for their products.
00:41:18.639 --> 00:41:29.199
Um and then I I think for the low-income folks um or people who are uh really struggling uh to pay their bills, they're eligible for extra help.
00:41:29.440 --> 00:41:33.760
Uh they should be automatically enrolled in the MP3 the smoothing program.
00:41:34.400 --> 00:41:45.119
And uh we're seeing in Texas and Florida this year, there's only one uh low-income subsidy free plan available to those folks.
00:41:45.679 --> 00:41:59.440
CMS really needs to work to guarantee the low-income subsidy called benchmark plans are available nationwide uh so that we don't get into a situation where um people can't get the extra help that they're entitled to.
00:41:59.760 --> 00:42:11.679
So it seems to me, Joel, right, going back to your original principles and when you designed this, the agency should be focusing on implementing policies that stimulates competition.
00:42:12.000 --> 00:42:30.159
Whether it's changing the benefit, right, the risk corridors, the uh changing the way the benefit, the bid submissions are done, making more plans do LIS, and what you and I have discussed, which which we probably should close on, is broadening the network requirements of the health plans.
00:42:30.400 --> 00:42:42.159
Having the health plans have more in network, letting them compete more on price to be in the network and forcing some of that competition could lower some of the prices here.
00:42:42.559 --> 00:42:53.440
Yeah, the trade-off here is that if we're gonna ease the pressure on the plans from a financial perspective, we ought to make the benefit better for the patients.
00:42:53.760 --> 00:42:54.079
That's it.
00:42:54.239 --> 00:42:54.480
Right?
00:42:54.639 --> 00:42:55.679
That's the trade-off.
00:42:55.840 --> 00:43:05.599
And so more robust networks, I mean, every network should be able to use a telehealth provider and have that count towards network adequacy.
00:43:05.840 --> 00:43:28.320
But we have to guarantee robust in-person access, access at the pharmacy, but then uh less utilization management, especially on products that are price controlled, but across all products, and robust formulary coverage for branded products, especially for very sick people who need a broader access to an array of innovative therapies.
00:43:28.559 --> 00:43:30.719
So let's take the financial pressure off.
00:43:30.880 --> 00:43:37.679
I agree with that, but let's also make sure the benefit is robust and superior for patients who really need it.
00:43:38.000 --> 00:43:38.880
And there you have it.
00:43:39.039 --> 00:43:45.440
That is the takeaway message for for all of our listeners as we head towards regulatory season, right?
00:43:45.599 --> 00:43:55.280
Is keeping your eye on the prize, which is beneficiary access, improving beneficiary outcomes as a result, uh, and relieving some of the pressure on the health plans in doing so.
00:43:55.440 --> 00:43:56.159
I agree with you.
00:43:56.239 --> 00:44:13.519
I believe CMS has some of the tools to do it, and we have a year or two for them to do it, hopefully drive some success, and then we can sort of then we can transition from there and codify the Congress and really avoid some catastrophic uh avoid really bad policies that could come in, come into effect.
00:44:13.679 --> 00:44:20.000
Um, Joel, I'll turn it over to you to give give us the last word, some other closing thoughts about the future of Part D.
00:44:20.079 --> 00:44:25.119
Give our audience some some reason to be optimistic here as we as we wind down our time together.
00:44:25.599 --> 00:44:41.440
Well, I I would just say for a program where no one thought plans would offer a benefit and it was not previously provided in Medicare, we now have 56 million Americans who are benefiting from this program and who love the benefit.
00:44:41.599 --> 00:44:43.599
It gets high satisfaction.
00:44:43.679 --> 00:44:45.760
Uh, that satisfaction is going down now.
00:44:45.840 --> 00:44:53.039
But um this was uh this was a great, great program, and it can be great again.
00:44:53.599 --> 00:45:02.400
This was self-inflicted damage through the IRA, which means if we changed it with the policy, we made it um worse in some areas.
00:45:02.559 --> 00:45:04.320
We can fix it with policy.
00:45:04.480 --> 00:45:17.440
That requires people to be engaged, to be thoughtful about our solutions, to be proactive, and to say this is really what we want from a program, a program that benefits all people, but that helps the poor people and the sickest the most.
00:45:18.480 --> 00:45:19.679
I've got nothing to add.
00:45:19.840 --> 00:45:20.719
Thanks a lot, Joel.
00:45:20.800 --> 00:45:21.199
That was great.
00:45:21.360 --> 00:45:22.320
Way to close this out.
00:45:22.559 --> 00:45:30.000
Positive uh some positive thoughts, focus on the patient, and more generally, thank you for everything uh you did today.
00:45:30.159 --> 00:45:36.079
Thank you for your time and for all of your friendship over the last 25 years, and look forward to many, many more.
00:45:36.239 --> 00:45:37.280
Thank you very much.
00:45:37.599 --> 00:45:38.719
Thanks, Jason.
00:45:38.960 --> 00:45:44.559
That wraps up this episode of Value-Based Voices, brought to you by the Association for Value-Based Cancer Care.
00:45:44.719 --> 00:46:00.639
Thank you so much, Joel, for sharing your insights, your thoughts, your optimism, and your expertise in describing a very complicated problem, but an important one, as it really speaks to the heart of access and treating patients living and suffering from cancer.
00:46:00.800 --> 00:46:04.239
And more importantly, thank you to our listeners for joining in on the conversation.
00:46:04.320 --> 00:46:07.199
And as you heard, this is not the end of the conversation.
00:46:07.360 --> 00:46:10.480
There will be plenty of opportunities for your voice to be heard.
00:46:10.719 --> 00:46:14.960
And like I said on the podcast, your voice is the important voice.
00:46:15.199 --> 00:46:21.440
And if you found today's discussion thought provoking, be sure to subscribe to Value Based Voices wherever you get your podcast.
00:46:21.840 --> 00:46:28.079
Stay tuned for more episodes that spotlight the voices shaping the future of oncology treatments.
00:46:28.320 --> 00:46:29.199
Thank you.