Life After the Affordable Care Act: What You Need to

Know Now

Jillanne Schulte, JDDirector, Regulatory Affairs

American Pharmacists Associationjschulte@aphanet.org

DISCLOSURES AND DISCLAIMERS

I do not have any financial interest/arrangement or affiliation with any organization(s) that could be perceived as a real or apparent conflict of interest in the context of the subject of this presentation.

The views presented during the presentation are solely my own and do not reflect the views of my employer.

Nothing in this presentation should be construed as legal advice.

SESSION OBJECTIVES

Discuss the current state of the ACA implementation, with an emphasis on its impact on practicing pharmacists.

Describe ACA-related trends, including new care delivery models, that impact the practice of pharmacy.

Describe the current status of federal legislation that, if passed, will provide reimbursement for pharmacist services.

THE BASICS

The Patient Protection and Affordable Care Act or the “ACA” was signed into law March 23, 2010

Supreme Court challenges: National Federation of Independent Business v.

Sebelius, June 28, 2012 Challenge to the “individual mandate” provision Mandatory Medicaid expansion was struck down

King v. Burwell, June 25, 2015 Challenge to the availability of subsidies for individuals

purchasing from the Federal exchange/marketplace Upheld Exchange subsidies for individuals, regardless

of point of purchase

IMPLEMENTING THE LAW

IMPLEMENTING THE LAW

Some of the law was in the legislation, but a number of the provisions required detailed regulations (e.g., QHPs, Essential Health Benefits, etc.)

Some provisions included in the legislation took effect immediately, but others have been phased in, including the controversial “individual mandate”

During rollout of the law, a number of provisions were delayed, but most are now in effect

IMPLEMENTING THE LAW

Timeline:2010: Preexisting condition protections,

Medicaid drug rebate changes, and preventive health coverage

2011: Medical Loss Ratio, “Doughnut hole” starts to close

2012: Law upheld by the Supreme Court, states start to push forward on Exchanges

October 1, 2013: Exchanges open and Medicaid expansion enrollment begins

2014: Individual Mandate enforcement begins June 28, 2015: Supreme Court upholds

subsidies

THE BASIC STRUCTURE OF HEALTH REFORM

EXCHANGES/MARKETPLACES

The ACA allowed each state a choice regarding whether to operate its own Exchange (or “Marketplace”), or to allow the Federal government to operate an Exchange in the state Fairly even split between states opting to

operate their own Exchanges and the states with Federal Exchanges, although that may continue to shift

Exchange/Marketplace = the site where individuals and small business (the “SHOP Exchanges”) can go to compare plans and purchase health insurance

SHOP EXCHANGES

SHOP Exchanges are the marketplaces for small businesses to purchase insurance coverage for employees The employer picks a tier of coverage to which it will

contribute, and the employee picks a plan from within that tier

Bills are aggregated for the employer Allows small businesses to access the small employer

tax credit program Not all plans participating in a State or Federal

Exchange must participate in the SHOP Exchange In 2015, employers with 50 or fewer full-time

employees can participate (in 2016, eligibility expands to businesses with > 100 employees)

EXCHANGES/MARKETPLACES

2016 open enrollment: November 1, 2015 – January 31, 2016

The number of plans available on each Exchange varies In some states there may be only 4-5 insurers

offering plans, but in others, like New York, as many as 50 insurers may be offering plans

Subsidies are available for individuals with incomes up to 400% of the Federal Poverty Level A helpful chart can be found here:

https://www.healthcare.gov/how-can-i-save-money-on-marketplace-coverage/

MEDICAID EXPANSION 25 states and the District of Columbia are

expanding coverage Why Expand?

For the first few years of the expansion, the Feds cover 100% of the costs for newly-enrolled Medicaid recipients

This eventually phases down to 90% Federal share for the newly-enrolled recipients

MEDICAID EXPANSION: THE LAW OF UNINTENDED CONSEQUENCES

In states that don’t expand Medicaid coverage, the possibility of a coverage gap arises for individuals who make too much to qualify for Medicaid, but too little to qualify for Exchange subsidies (which start at 100% of the Federal Poverty Level) Some of these state are considering a “private

option” to cover these individuals Under the “private option”, states would use

Medicaid expansion funds to purchase coverage on the Exchanges for individuals in the coverage gap

WHAT’S IN IT FOR US?

WHAT’S IN IT FOR ME?

New Protections for Individuals No denials for preexisting conditions Children can stay on parents’ plans until age 26 No lifetime coverage caps Out-of-pocket cost caps for medical and drug

costs $6,600 for an individual and $13,200 for a family

Preventive services covered Hobby Lobby v. Sebelius: Legal challenge to the

requirement that employers cover the costs of family planning as a preventive service

Medical Loss Ratio—plans must spend 80 - 85% of premium payments on care and must provide rebates to consumers/employers if they do not

FOR THE ALREADY INSURED…

Individuals who already have insurance were not supposed to see major changes, but some are seeing premium shifts and cancelled plans

Expect to see continued volatility in premiums These increases are likely in reaction to the ACA, but

are not mandated by the law Premiums are likely to rise next year, although some

states are seeing steeper increases than others In June 2015, insurers submitted rate increase requests for

2016, with a many asking for double digit increases Insurers now have more data on actual service utilization

by Exchange plan enrollees The “young invincible” factor—the higher the number of

young, healthy individuals enrolled in QHPs, the more stable the premiums

FOR THE ALREADY INSURED

Some individual plans have been cancelled because they are not ACA-compliant If a plan is cancelled, an individual may—

Purchase a ACA-compliant replacement policy offered by the plan;

Purchase a plan on the Exchange during a special enrollment period; or

If qualified, purchase a catastrophic coverage plan

EXCHANGES: QUALIFIED HEALTH PLANS (QHPS)

“Under the Affordable Care Act, starting in 2014, an insurance plan that is certified by the Health Insurance Marketplace, provides essential health benefits, follows established limits on cost-sharing (like deductibles, copayments, and out-of-pocket maximum amounts), and meets other requirements. A qualified health plan will have a certification by each Marketplace in which it is sold.”

~ Definition from www.healthcare.gov

EXCHANGES: ESSENTIAL HEALTH BENEFITS (EHBS) IN QHPS The EHBs include at least the following items and services:

Ambulatory patient services (outpatient care you get without being admitted to a hospital)

Emergency services Hospitalization (such as surgery) Maternity and newborn care (care before and after your baby is

born) Mental health and substance use disorder services, including

behavioral health treatment (this includes counseling and psychotherapy)

Prescription drugs Rehabilitative and habilitative services and devices (services and

devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)

Laboratory services Preventive and wellness services and chronic disease

management Pediatric services

Kaiser Family Foundation, http://kff.org/infographic/visualizing-health-policy-what-americans-pay-for-health-insurance-under-the-aca/, last accessed April 4, 2014.

EXCHANGES: PRESCRIPTION DRUG BENEFITS

Prescription drugs are an EHB, but formularies vary by state

Formularies generally have four tiers, with the lowest-cost generics in Tier 1 and the highest-cost branded specialty drugs in Tier 4

Cost-sharing for prescription drugs can vary widely across plans, but formulary information should be available to all individuals

Starting in 2015, price caps will also apply to out-of-pocket expenses for prescription drugs

PRESCRIPTION DRUGS IN QHPS

CMS proposed changes for Qualified Health Plans (QHPs) that impact pharmacy/pharmacists for CY 2016Greater transparency regarding plan

formularies Increased beneficiary choice between mail-

order and brick-and-mortar pharmacies CMS also proposed changes to QHP plan

formulary determination for CY 2017 and onRequired use of P & T CommitteesSwitch from USP standards to the American

Hospital Formulary Service (AHFS)

HELPFUL RESOURCES

One stop shopping for all ACA information https://www.healthcare.gov/

Kaiser Family Foundation: http://kff.org/health-reform/

NEW CARE DELIVERY MODELS AND PHARMACISTS

HEALTH CARE ENVIRONMENT

The health care system is undergoing a significant transformation in both the finance and delivery of health care services

At the federal level, the Affordable Care Act introduced a focus on new models of payment and care delivery ‒ Accountable Care Organizations (ACOs)‒ Patient-Centered Medical Homes

States are also examining their health care programs and defining policies that create efficient models of care and achieving improved quality and outcomes cost effectively ‒ Expansion of managed care and adoption of

ACO model in state Medicaid programs

HEALTH CARE ENVIRONMENT CONT…

Transition to Value-Based Care In January 2015, CMS announced that its goal is to

transition most of its Medicare payments to value-based payment models over the next several years By 2016: 30% of traditional (fee-for-service) Medicare

payments transitioned to alternate payment models (e.g., ACOs) or bundled payment arrangements, with 85% of all traditional payments tied to value/quality

By 2018: 50% of traditional Medicare payments transitioned to value-based payment models, with 90% of all traditional payments tied to value/quality

CMS ACO programs, including the Pioneer Model and the Medicare Shared Savings Program (MSSP), have shown savings in some cases, but not in all

FUTURE OF HEALTH CARE: NEW CARE DELIVERY MODELS

Pharmacists can help with many of the known problems in the current health care system

When pharmacists are involved, access is increased, quality is improved, and costs are reduced

‒ Access – United States is facing a primary care provider shortage that is projected to get worse over the next decade

‒ Quality – As the aging population continues to grow, medications will play an even greater role in the quality and cost of health care

‒ Cost – Studies have demonstrated that successful coordination and management of transitions of care services lowers costs by positively impacting hospital readmission rates

OPPORTUNITIES FOR PHARMACISTS TO ASSIST PATIENTS AND PAYERS

Federal Sector Social Security Act (SSA) (Medicare Part B & D, CMMI, ACOs)

Sustainable Growth Rate Formula

Federal Regulations (CMS, AHRQ, HRSA)

State Provider Status

Medicaid Health Insurance

Exchanges, state health plans

Build grassroots support

Private Payer System

ACOs Private or Employer-

based Insurers Medical Homes

29

PROVIDER STATUS – PROBLEMS AND OPPORTUNITIES

Total health care spending in the United States is expected to reach $4.8 trillion in 2021, up from $2.6 trillion in 2010 and $75 billion in 1970 Health care spending will account for nearly 20% of GDP

by 2021

The United States spends almost $300 billion annually on medication problems including medication non-adherence

Chronic diseases cost our health care system $1.7 trillion annually (accounting for more than 75% of health care spending)

PATIENT ACCESS TO PHARMACISTS’ CARE COALITION

H.R.592 / S.314

Pharmacy and Medically Underserved Areas Enhancement Act Representatives Brett Guthrie (R-KY), G.K.

Butterfield (D-NC), Todd Young (R-IN), and Ron Kind (D-WI) introduced on January 28, 2015 Currently 145 cosponsors C

Senators Chuck Grassley (R-IA), Sherrod Brown (D-OH), Robert Casey (D-PA), and Mark Kirk (R-IL) introduced on January 29, 2015 Currently 20 cosponsors

Amends section 1861 of the Social Security Act to recognize pharmacists’ services within Medicare Part B

592

PATIENT ACCESS TO PHARMACISTS' CARE COALITION

H.R.592 / S.314 – Scope of Proposal Pharmacists – State-licensed pharmacists with a B.S.

Pharm. or Pharm. D. degree who may have additional training and certificates depending on state laws

Services – Services authorized under state pharmacy scope of practice laws

Patients – Services provided in/ for Medically Underserved Areas (MUA), Medically Underserved Populations (MUP), or Health Professional Shortage Areas (HPSA)

PATIENT ACCESS TO PHARMACISTS’ CARE COALITION (PAPCC)

• APhA• AACP• ASCP• ASHP• FMI• IACP• NCPA• NACDS• NASPA• Rite Aid• Walgreens

• Albertson's• Amerisource

Bergen• BI-LO

Pharmacy • Cardinal

Health• CVS Health• fred's

Pharmacy• Fruth

Pharmacy• Health

Leadership Council

• Hematology/Oncology Pharmacy Association

• National Center for Farmworker Health

• Omnicell• Safeway Inc.• SuperValu

Pharmacies• Thrifty White

Pharmacy• WalMart• Winn-Dixie

PAPCC – FEEDBACK FROM THE HILL

Positive feedback overall, but cost is important Need to “score” low by Congressional Budget Office (CBO) Pharmacy challenged to be “saver, not coster” Concern by pharmacy that savings, especially those that are long-term, are not considered when scoring

Hill equates provider status with “fee-for-service” Current focus is on new payment models (e.g. ACOs)

View from other health care providers

QUESTIONS

Jillanne SchulteAmerican Pharmacists Association2215 Constitution Ave. NWWashington, DC 20037jschulte@aphanet.org202.429.7538