WASHINGTON -- "Program integrity" -- otherwise known as fraud -- is a "huge emphasis" in the Trump administration when it comes to healthcare, an administration official said Thursday.
The administration is considering revisions to the Stark laws prohibiting physician self-referral, and "they're being extremely deliberate about this because it's not a simple thing to go after," Joseph Grogan, JD, associate director of health programs at the Office of Management and Budget (OMB), told ľֱ at a briefing sponsored by the Alliance for Health Policy and APCO Worldwide. "We're talking about something conceived of [years ago] that may not serve the current healthcare environment; if you were to [revise] it the wrong way, it could lead to fraud, and we would look at that."
On the other hand, the law shouldn't be too restrictive either. "If you've got the ability to [provide] technology associated with a medical device sale or a drug sale -- 'I'm going to give you an iPhone' or all the technology you need as a physician in order to make sure the device you've given your patient works well remotely and cuts down on visits to the doctor and cuts down adverse events, the current anti-kickback statute may prohibit that for whatever reason," he said. "So we [also] would look at, 'This is going to decrease utilization, decrease hospitalization stays, and on balance it's going to be good."
The Department of Health and Human Services "has got some really good people working on [anti-kickback issues]," he added, noting that Health and Human Services deputy secretary Eric Hargan has taken this issue on himself.
Improving Access to Medical Devices
The 1989 Stark law, named for former congressman Fortney H. "Pete" Stark (D-Calif.), "prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment, or compensation), unless an exception applies," the Centers for Medicare & Medicaid Services (CMS) notes on its website.
The administration is also focused on getting medical devices approved more easily, Grogan said. "At one point, we were the Number One country to launch medical devices first; now it's Germany. That's not a good trend ... and we don't see as much private investment in the device space as we would like. This is an industry we dominate, and the Chinese want to own it completely; they have made it part of their national goal to dominate the medical device industry."
Right now, if someone wants their device to be reimbursed under Medicare or Medicaid, "if you approach CMS in the wrong way, your company's ruined or your product never sees the light of day," he said. "We want to ... figure what can be done to rationalize this process and provide more transparency ... I have had some good discussions with Adam Boehler [the head of the Center for Medicare and Medicaid Innovation, or CMMI] about what can be done in the device space, getting these things to patients more quickly."
Benefits of 'Step Therapy'
Grogan emphasized that when it comes to Medicare, "the president was absolutely adamant; we are not going to screw the beneficiary, which is frequently the default option in Medicare ...We are forced to be creative in figuring out how to find efficiencies" to save money in the Medicare program.
He was asked by a reporter how that sentiment applied to Medicare's recent announcement that it would allow Medicare Advantage plans to implement "step therapy," in which plans would only reimburse patients for an expensive drug for a particular disease after they had tried and failed with less expensive therapies. "The goal is not to just control costs; it's to provide more flexibility," he said, noting that there is an "escape hatch" for physicians in which they can argue that the more expensive drug is the only one that will work for a particular patient.
But step therapy can be useful in certain cases, he added. "A good example is the oncology space, where you have clear clinical guidelines and outcomes are better for patients," he said. "We want to make sure physicians are following the guidelines and not going off the reservation."
Scrutinizing PBMs
Grogan also reiterated the administration's concerns about pharmacy benefit managers (PBMs) and the rebates they get. "In certain therapeutic areas, rebates can be [distorted], and in certain circumstances they are not serving the interests of patients who aren't able to capture as much value out of the rebate in terms of reduction of copays at the point of sale as they otherwise would," he said. "It certainly creates the appearance that PBMs and manufacturers may be negotiating over the size of the rebate, and not the list price or what is the best therapy for a class of patients."
"Are we skeptical of role rebates and PBMs are playing? Yes, we're scrutinizing it and want to make sure they're delivering as much value as we think they should," he added. "One of the great things about working for President Trump is that he doesn't have a bevy of people who started investing in his political career when he was 26 years old ... He has given us very [few] restrictions. I worked in the [George W.] Bush administration; there were certain industries you couldn't mess with and that is not the case here."
Grogan also had praise for Boehler, pointing out that he has had experience in running an accountable care organization (ACO). "He's the right guy to run CMMI," Grogan said. He has experience from the real world; he's figured out how to deliver value and save money. [ACOs] have been too complicated in the past, too much boiling in the ocean, and we should get to simplicity in being able to evaluate these things."
"Some of these [ACO] models, I don't understand," Grogan said. "I can bring in my whole team and we can spend 3 days explaining how this model is designed and saying 'The coefficient is this; the multiplier is that' and you've got no idea [what they're talking about] ... It's a big test for CMMI. If a guy like Adam Boehler can't figure out how to make it work, the place should be shut down because who else are you going to get to make it work?"
Despite the stress and complexities involved, Grogan said he loves his job. "The average tenure is 18-24 months; I'm right in that zone. But every day we learn something; we work with very smart people, there's a ton of interaction within agencies, and we get to see across HHS what they're up to."