Finding the Rx for Your Patient Assistance Program CBI Manufacturer Workgroup Presented by Ross Margulies, Esq. Foley Hoag LLP March 17, PDF Free Download

Finding the Rx for Your Patient Assistance Program CBI Manufacturer Workgroup 2017 Presented by Ross Margulies, Esq. Foley Hoag LLP March 17, 2017

Agenda Antitrust statement (see handout) 2016-2017 in Review Health reform update and impact on PAPs Hot topics update: - The latest from OIG - Third party premium payment trends - Allowable alternative support programs - Allowable bridge/quick start programs 2017 Foley Hoag LLP. All Rights Reserved. 2

False sense of patient protection About a year ago, we saw a false trend beginning to happen, as many in the healthcare arena were predicting that the PAP marketplace would fall away once the ACA was implemented. But now the industry is recognizing that there will still be a pressing need for ongoing assistance to serve the underinsured population. - Kevin Cast, VP of strategy and contracting for United Biosource 2017 Foley Hoag LLP. All Rights Reserved. 4

The ACA in review Post-ACA patient access & support specialists geared up for a shift in patient support service and patient access programs - From providing support to those without coverage - To providing support to those with coverage Ex. A move away from free drug to cost-sharing assistance 2017 Foley Hoag LLP. All Rights Reserved. 6

The ACA in review For patient access & support executives, the decision of states not to expand Medicaid only adds to the existing complex environment in which you operate: 2017 Foley Hoag LLP. All Rights Reserved. 9

The ACA, as we know it, will change - More consumer directed choices (HSAs, HDHPs) - More state flexibility (particularly in Medicaid) Moving beyond the ACA - More product design flexibility (I m looking at you, EHBs) - Different allocation of subsidies - Restructuring of risk pools to encourage younger enrollees - Redesign (maybe dramatic redesign) of the individual insurance market, possibly across state lines Medicaid will look different (maybe very different) - More state flexibility through the 1115 waiver process - Continued growth in Medicaid managed care - Block grants or per-capita caps 2017 Foley Hoag LLP. All Rights Reserved. 10

Major Actions Since January 20th Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal (January 20, 2017) Presidential Executive Order on Reducing Regulation and Controlling Regulatory Costs (January 30, 2017) Proposed Rule on ACA Market Stabilization (February 15, 2017) House committees release draft versions of the American Health Care Act (AHCA) (March 6, 2016) CBO releases budget score/impact of AHCA (March 13, 2016) 2017 Foley Hoag LLP. All Rights Reserved. 11

Major Actions Since January 20 th (cont.) Letter to Governors on section 1332 waiver simplification (March 13, 2016) Letter to Governors on Medicaid waiver simplification (March 14, 2016) House leaders aiming for a House floor vote on AHCA by end of month 2017 Foley Hoag LLP. All Rights Reserved. 12

AHCA Major Provisions Summary Eliminates individual and employer mandates, effective immediately Creates a continuous coverage requirement in the individual and small group markets set to begin in 2019 (or 2018 for special enrollments) Eliminates ACA income-based tax credit and cost sharing subsidies in 2020 Creates age-based tax credit for individual insurance coverage by 2020 Makes significant changes to Medicaid, converting it to per capita cap program in 2020 Repeals many of the ACA s taxes in 2018 2017 Foley Hoag LLP. All Rights Reserved. 13

CBO Estimate of AHCA CBO estimates 24 million would lose coverage by 2026 - In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law - Changes in uninsured due to: (1) elimination of individual mandate; (2) changes to tax subsidies; (3) and cuts to the Medicaid program. Projects bill would save $337 billion over the next decade with most savings coming from cuts to the Medicaid program under a move to per-capita-caps Premiums expected to rise 15-20% in 2018-2019, and decrease in 2020 and thereafter due to: (1) stability fund; (2) more younger enrollees; and (3) fewer coverage requirements. 2017 Foley Hoag LLP. All Rights Reserved. 14

AHCA: the Good and the Bad for PAPs The Good Overall premiums are expected to decrease after 2020 Premium support expands to a wider audience, and eliminates the coverage gap Consumers are given more choice in product selection HSA incentives may increase the out-of-pocket power of consumers The Bad Premiums for lower-income, older Americans may increase significantly A new coverage gap of low-income childless adults will likely result Removal of benefits mandates mean less robust coverage and more underinsurance HDHP incentives will further increase the need for cost-sharing assistance 2017 Foley Hoag LLP. All Rights Reserved. 17

AHCA: New Needs Created Expansion of age-rating bands will increase the cost of insurance for older, low-income Americans and lead to more uninsured or underinsured in this population Move to per-capita caps in Medicaid will slowly erode the Medicaid program, leading states to potentially shed high-cost enrollees or reduce benefits Elimination of benefit mandates will increase the number of underinsured Americans Premium support and cost-sharing assistance needs likely to both rise in the coming years 2017 Foley Hoag LLP. All Rights Reserved. 18

Hot Topics: OIG Update After May 2014 Supplemental Special Advisory Bulletin, ask: No donor or affiliate can exercise control over the program Patient either has a provider in place or is free to choose their provider Data must be aggregated Disease state based on widely accepted clinical standards 2017 Foley Hoag LLP. All Rights Reserved. 19

Hints from Recent Advisory Opinions A more refined stance on specific disease funds? Modification of OIG Advisory Opinion 04-15: Low risk of abuse for disease fund limited to patients with certain metastatic cancers because (1) multiple drugs available to treat symptom; and (2) PAP assistance not limited to just drugs to treat symptom (i.e. assistance available for all medications prescribed for underlying cancer and related symptoms) 2017 Foley Hoag LLP. All Rights Reserved. 20

Hints from Recent Advisory Opinions Advisory Opinion 15-16: OIG s favorable opinion on a new proposal for a charitable PAP based in part on the PAP s representations that there were several drugs made by various manufacturers currently available to treat each of the specific diseases. 2017 Foley Hoag LLP. All Rights Reserved. 21

Hints from Recent Advisory Opinions Modification of OIG Advisory Opinion 07-11: If any of the PAP s future disease funds would result in supporting only one drug treatment or one manufacturer, PAP certifies to also support the other medical needs of patients with the disease (e.g. copayment support for all prescribed medications for the management and treatment of the patient s disease) 2017 Foley Hoag LLP. All Rights Reserved. 22

Hints from Recent Advisory Opinions Modification of OIG Advisory Opinion 02-01: OIG permits three exceptions to disease fund definition standard: (1) Charity will offer disease fund for certain metastatic cancers with coverage for all drugs approved for the type of cancer; (2) Charity will also have a fund for prescription drugs used to manage but not treat the cancers; (3) Charity will also have a fund for a disease affecting patients with certain neurological disorders but will offer support for products that both treat the disease and underlying neurological disorders. Key takeaways from this March 2017 opinion: - Expanding assistance to include products used to manage, in addition to treat, a specific disease, will lessen the risk of a particular program - Expanding assistance beyond co-payment assistance will lessen the risk of a particular program - Manufacturers may restrict donations to particular disease funds, but may not otherwise be restricted 2017 Foley Hoag LLP. All Rights Reserved. 23

Key Reminders for Manufacturers Charities design the programs in their entirety and are operated independently Disease funds are broadly defined and offer support for a wide variety of products Charities assess patient eligibility and make independent referrals Reports produced by charity must be in the aggregate and not allow manufacturer to correlate support with the patients that use its products 2017 Foley Hoag LLP. All Rights Reserved. 24

Third Party Premium Payments October 30, 2013: QHPs purchased through the Marketplace do not constitute federal health care programs under the federal antikickback statute (Letter from Sebelius to McDermott) November 4, 2013: HHS has significant concerns about third party premium payments for QHPS and encourages issuers to reject them (CCIIO FAQ) February 7, 2014: The concerns expressed in October did not apply to subsidies by the Ryan White/AIDS program, Indian tribes, state or federal government programs, or private foundations (CCIIO Guidance) 2017 Foley Hoag LLP. All Rights Reserved. 25

Third Party Premium Payments (cont.) March 8, 2016: We defer the question of acceptance of third-party payments made by non-profit organizations to future rulemaking (NBPP Final Rule 2016). August 18, 2016: CMS issues RFI seeking public comment on concerns that some health care providers and provider-affiliated organizations may be steering people eligible for, or receiving, Medicare and/or Medicaid benefits into Affordable Care Actcompliant individual market plans, including Health Insurance Marketplace plans, for the purpose of obtaining higher reimbursement rates Potential difference between premium assistance for all low-income individuals, vs. premium assistance based on health status 2017 Foley Hoag LLP. All Rights Reserved. 26

Allowable Alternative Support Programs Co-pay Assistance for only Medicare/Medicaid: cost- sharing subsidies provided by bona fide, independent charities should not raise anti- kickback concerns (OIG Advisory Opinion 14-11) - Also see OIG Advisory Opinion 15-14 (MRI program reimburses contracted providers in full, so no Medicare/Medicaid reimbursement) Lodging/Transportation: SSA 1128A ( remuneration which promotes access to care and poses a low risk of harm to patients and Federal health care programs ) See also (OIG Advisory Opinion 11-01) Also permissible under strict guidelines: premium support, incidental expenses, diagnostic imaging 2017 Foley Hoag LLP. All Rights Reserved. 27

Temp. Free Good Programs Can manufacturers include Federal healthcare beneficiaries in their commercial temp free goods programs (i.e. quick start or bridge programs? Yes (see OIG Advisory Opinion 15-11) Must have limits in place to prevent overutilization (e.g. patient only eligible for 1-2 refills) Not a seeding program (strict guidelines on advertising of the program, insurance must be in place, and drug alternatives available) Prescriber receives no financial benefit No cost to the Federal government (e.g. free drug does not count toward TrOOP) Beneficiary inducement toward a particular provider or supplier must be minimized (i.e. use of a Free Supply pharmacy) 2017 Foley Hoag LLP. All Rights Reserved. 28

Finding the Rx for Your Patient Assistance Program CBI Manufacturer Workgroup Presented by Ross Margulies, Esq. Foley Hoag LLP March 17, 2017