A Vehicle For Eliminating IPAB, CMMI?
HR 3762 currently doesn’t address the Medicare Independent Payment Advisory Board (IPAB) and Center for Medicare and Medicaid Innovation (CMMI) but pharma manufacturer would likely support repealing or curtailing those programs. In a statement on the election, the Pharmaceutical Research and Manufacturers of America did not comment on how it may seek to shape ACA legislation but listed other of its policy priorities.
Both IPAB and CMMI are designed to implement cost control measures administratively, even when there is opposition in Congress. The Obama Administration has attempted to use CMMI to enact drug price controls in Medicare (but has not yet succeeded) and Clinton had been widely expected to use them to advance her drug pricing agenda.
The Independent Payment Advisory Board is envisioned as a 15-member independent panel, to be appointed by the President and confirmed by the Senate, charged with enforcing a limit on Medicare spending growth. If Medicare per capita spending growth exceeds certain economic growth measures in a given year, IPAB is directed to recommend a plan to generate savings in the program.
The board has been given broad authority to craft and execute new Medicare policies (including changes to drug reimbursement) with limited congressional input. In general, unless Congress acts to block the proposals within a brief time period and identify similar savings elsewhere, CMS will implement the policy recommendations.
The board has not yet been constituted because its activities are strongly opposed by Republicans in Congress and even a number of Democrats. However, the ACA takes that possibility into account and directs HHS to carry out IPAB’s activities if the board has not been formed and action is triggered.
That scenario could play out beginning next year. Spending forecasts by the Medicare trustees have suggested that IPAB action to develop a drug cost containment plan for Medicare could be triggered for the first time in 2017, to be implemented in 2019. The trustees have projected that in 2017, Medicare spending will grow by 2.82%, exceeding a 2.62% targeted inflation rate set by the ACA.
CMMI’s ability to potentially drive major changes in drug pricing came to light early in 2016 with its controversial proposal to revise Medicare payments for Part B drugs, which drug firms and other stakeholder strong oppose.
The Centers for Medicare and Medicaid Services is also considering developing a payment demonstration involving Medicare Part D that would be implemented under CMMI.
CMMI was established to test new payment and delivery models in Medicare, Medicaid, or the Children’s Health Insurance Program while improving or maintaining care quality.
Congress provided the HHS Secretary with the authority to expand the scope and duration of a model being tested through rulemaking, including the option of testing on a nationwide basis, if a model either reduces spending without reducing the quality of care, or improves the quality of care without increasing spending. It must not deny or limit the coverage or provision of any benefits. Those determinations are made based on evaluations performed by CMS and the certification of CMS’s chief actuary with respect to spending.