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Recap: Payer & Provider Perspectives on Coverage and Payment Issues

By Brett Johnson, Director of State and Local Government Policy, CLSA

On November 17th, CLSA held the program “The Reimbursement Decision: Payer & Provider Perspectives.” Attendees were treated to a candid discussion of what influences coverage and payment decisions on new technologies and therapies for insurers, pharmacy benefit managers (PBM), and providers.

1Tim Hunter of Musculoskeletal Clinical Regulatory Advisers, LLC (MCRA) moderated the panel, which included: Tim Maurice, CFO for UC Davis Health System; Alan Rosenberg, M.D., VP of Medical and Clinical Pharmacy Policy for Anthem, Inc.; and Brian Solow, M.D., Chief Medical Officer for Optum Life Sciences.

From the opening exchanges, panelists stressed that healthcare has already moved into an era where value is at the center of payer and provider decisions. “Value never came up twenty, or even ten, years ago, but now we talk about it all the time,” said Dr. Solow, adding, “You now must convince health plans with data that what you offer is more than just a novel therapy, but that it brings real value.”

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Left to Right: Dr. Alan Rosenberg, Anthem Inc; Dr. Brian Solow, Optum Life Sciences; Tim Maurice, UC Davis Health Systems, and Tim Hunter, Muscoloskeletal Clinical Regulatory Advisers lead the audience in a frank discussion of the issues concerning coverage and payment from the payer and provider perspectives.

Determining that value requires both an assessment of a therapy’s efficacy and a consideration of its related costs. Dr. Rosenberg emphasized that Anthem was careful to insulate the efficacy evaluation from cost factors, and a determination on efficacy always came first, stating, “Only after careful evidentiary review of the clinical impact is cost considered.” Panelists were clear, however, that there were no universally accepted payer definitions or standards for what constitutes value.

There were several questions concerning demonstrated value that the audience had for the panel to consider. “If I added up all the times a supplier came to me and said, ‘We can reduce your hospital stays by one bed-day,’ my hospital would be empty,” quipped Tim Maurice. “So we take our evidence from not just the supplier, but from a variety of sources.” Both he and Dr. Solow stressed the power of being able to see real-world results using the data that can be pulled from electronic health records (EHR), not just claims data. Dr. Solow was quick to add, however, that generating this real-world evidence generally requires already having a sufficient number of payers covering the therapy without such evidence.

In terms of the evidence provided by drug and device makers, Dr. Rosenberg stated “Well structured randomized controlled trials remain a strong form of evidence considered when evaluating a therapy or diagnostic.”

The extent to which pay-for-performance payment models between payers and suppliers would catch on was one of the few points of disagreement among the panelists. Under such a model, the net price paid for a therapy by a health plan might be tied to certain clinical outcomes observed for those enrollees on it. Dr. Solow identified such value-based contracting as one of the reforms going forward that will change the way therapies are covered and reimbursed. Dr. Rosenberg, on the other hand, said he could not see Anthem covering therapies or technologies on a pay-for-performance basis, stating, “Why would we cover it at all if we aren’t convinced by the evidence that it will work?”

Despite the debate around the particulars of how coverage and payment decisions might change going forward, one message was clear throughout the panel: we are going to continue to see growth in payers’ and providers’ expectations that innovators show the value of a therapy or technology to receive a favorable coverage or payment determination.

CLSA members have indicated that coverage and reimbursement are a top priority to continually understand and discuss with all stakeholders. If you have specific questions or content you would like CLSA to consider for programming, please send your comments to info@califesciences.org.

To view upcoming CLSA events, click here.