Access Insights 2024: Analyzing Drug Pricing and Reimbursement Data Amid a New Wave of CMS Price Requirements

Many Access Insights attendees may remember the presentation¹ that Turquoise Health’s Chris O’Dell, SVP of market solutions, made at least year’s conference. It had been centered on “Strategies for Using the New Federally Mandated Price Transparency Data in Pharma,” in which he noted that while their primary clients are payers and providers, there's a growing interest from life sciences companies in leveraging transparency data to understand contract data and optimize drug pricing strategies.

This time around, in his latest session on “Drug Pricing and Reimbursement Data in the New Era of CMS Price Transparency Mandates,”² O’Dell’s goal was to provide a past, current, and future look into CMS price transparency mandates. After all, it’s been three years since the first CMS (Centers for Medicare and Medicaid Services) price transparency regulations required that all hospitals and payers submit their commercial, Medicare advantage, and managed Medicaid negotiated rates. Manufacturers within the biopharma space now need to develop insights and strategies in order to support their market access, pricing, and reimbursement efforts.

“Last year was my first time at this conference, and we did a presentation on price transparency data. I think it's fair to say at that point, especially on the manufacturer side, almost no one had heard about it. Part of that is the terminology behind it, especially at this conference,” O’Dell explained. “If you think about it, there's price, cost, charge and reimbursement, and all of these terms that not only don't have perfectly good definitions, even when you're thinking about them as a pharma manufacturer, but then you flip it over to the hospital side and the payer side—who are the ones publishing this data—and the terms can mean something very differently. Price transparency data, even though it's called price transparency, is the reimbursed amount between a payer and a hospital, and that wasn't something that was previously available, so the government made it a point to go out and ask them to publish this.”

Essentially, rising healthcare costs—including increase healthcare expenditure as a percentage of US GDP—triggered CMS to take action. These aforementioned hospitals and payers were then required to publish their prices in machine- readable files (MRFs); hospitals would report list prices, cash prices, and negotiated rates with payers, while payers would report negotiated rates across all settings of care. Prior to this, payers and providers were the only stakeholders who knew such rates (within siloes) and pharma manufacturers were forced to leverage market research, competitive intelligences, or limited claims data in order to educate themselves on commercial reimbursement.

However, that doesn’t mean that there weren’t initial challenges with raw data. There was originally no standard format, duplicate data files, and inconsistent reporting and formatting which made it more of an obstacle. Being that compliance to the mandate was poor to start out, citations and fines grew to as high as $2 million per year per hospital, which was enforced federally.

According to Turquoise Health data, hospital and payer data compliance has continued to improve over time. As of May 2024, there are 5,972 hospitals with an MRF and 651 health systems, while there are 240 payers with an MRF.

Price transparency data has had quite the influence across multiple functions, from market access, to Health Economics and Outcomes Research (HEOR) and government, to field teams. Further, it has become a complimentary dataset to coverage and claims, especially as a way to offer a more holistic understanding of customer needs.

So where can we go with price transparency down the road? There is currently bi-partisan support for it, along with an increase in accountability from the Government Accountability Office, otherwise known as GAO. As of Sept. 27, 2023, CMS noted that they “intend to develop technical requirements and an implementation timeline in future guidance,” but as of June 2024, guidelines have yet to be published, and there is currently no enforcement date, although internal experts have said that there is the potential for a Jan. 1, 2025 enforcement date (but CMS has yet to confirm this information).

There are also two bills in the process of being considered by legislators. One of which is H.R.5378 (Lower Costs, More Transparency Act), which has passed the House and is awaiting Senate approval, while S.3548 (Health Care Prices Revealed and Information to Consumers Explained Transparency Act) has been introduced in the Senate.

References

1. Saraceno N. Access Insights 2023: Price Transparency Data in Pharma. Pharmaceutical Commerce. November 9, 2023. Accessed October 16, 2024. https://www.pharmaceuticalcommerce.com/view/access-insights-2023-price-transparency-data-in-pharma

2. Financial Headwinds and Tailwinds to Commercialization. October 14, 2024. Access Insights Conference, Washington, DC.