Centers for Medicare & Medicaid Proposed Rule on Value-Based Purchasing Arrangement


The National Health Council (NHC) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) proposed rule to facilitate the adoption of value-based purchasing (VBP) arrangements, update definitions affecting Medicaid drug rebates, and amend reporting requirements for Medicaid best price.

Created by and for patient organizations 100 years ago, the NHC brings diverse organizations together to forge consensus and drive patient-centered health policy. We promote increased access to affordable, high-value, sustainable health care for the more than 160 million people with chronic diseases and disabilities, and family caregivers that we represent. Made up of more than 140 national health-related organizations and businesses, the NHC’s core membership includes the nation’s leading patient organizations. Other members include health- related associations and nonprofit organizations including the provider, research, and family caregiver communities; and businesses representing biopharmaceutical, device, diagnostic, generic drug, and payer organizations.

The emergence of new, innovative therapies, the rising cost of prescription drugs, and heightened concern about patient access to potentially lifesaving treatments have driven interest in pursuing alternative health care financing structures that drive value and better promote patient interests. The NHC supports1 policies that ensure adequate access to affordable, high-value, sustainable health care and recognizes VBP arrangements between manufacturers and payers as an important tool to support this patient-focused objective. Specifically, the NHC supports VBP arrangements that not only improve access to expensive treatments and aid in the sustainability of health care systems, but also mitigate the high up-front cost of emerging treatments that patients bear. Thus, the NHC offers support for the overall aim of CMS’ proposal to create flexibilities that can facilitate VBP adoption in the commercial and public-payer markets, but strongly advises the Agency take a deeper look at the complex implications of other provisions of the proposed rule given the limited comment period for stakeholder analysis and response. Our organization strives to ensure patient interests are thoroughly considered in system-changing proposals like those included in this proposed rule and ask CMS to better incorporate patient interests throughout the rule. As such, the NHC would greatly appreciate a 30-day extension of the comment period to ensure we, our member organizations, and other patient groups can adequately respond to the many implications of this proposed rule.

The NHC appreciates this long-anticipated proposal from CMS to remove barriers to payer and manufacturer adoption of VBPs. Specifically, the NHC commends the proposed rule’s intent to allow manufacturers to report separate best prices under VBP agreements without impact to best price for sales outside of VBPs. In addition, the NHC is supportive of CMS’ clarification around the use of bundled sales methodologies in conjunction with VBPs. The NHC knows that CMS is still working to add detail and clarify provisions related to VBPs. Below, please find recommendations to help add some clarity to some provisions.

Medicaid best price requirements have consistently been recognized by stakeholders as a deterrent to market adoption of innovative contracting. CMS’ proposed changes will mitigate this longstanding barrier to VBP adoption and help to facilitate adoption of these arrangements, which could improve patient access to life-saving treatments. There are additional barriers to effective VBAs, and the NHC looks forward to working with CMS to continue to remove these barriers while ensuring patients remain protected.

Importantly, the proposed rule’s provisions to support and advance VBPs should help promote health care system sustainability, as more high-cost but high-value therapies come to market that do not appropriately fit within the current payment paradigm. These new therapies may include cell and gene therapies, which are often one-time treatments for rare diseases that come with a high price tag for both payers and patients, high upfront costs with potential downstream savings that cannot be realized by the payer in a traditional payment model, and limited long-term outcome data to affirm their prolonged value. VBPs have the potential to mitigate payers’ financial risk and encourage broader coverage and patient access to high-value/high-cost treatments. The NHC consequently recognizes VBPs as a mechanism for improving patient access to high-value health care. The broader adoption of VBPs could also lead to the more widespread collection of real-world data about patient outcomes, driving long-term benefits for patients related to medical innovation and clinical effectiveness.

In the final rule, we ask the Agency to ensure that the needs and priorities of patients are incorporated into the rules designed to facilitate VBPs. As CMS considers the operational aspects of its proposed rule, CMS should ensure that the adoption of VBPs helps to align the broader health care system around value and improved access, particularly from the patient’s point of view. Specifically, we recommend that CMS:

  1. Require substantive input from patients when establishing criteria for“evidence- based measures” or “outcomes-based measures” and defining “substantial” to ensure that VBPs demonstrate desired outcomes for patients;
  2. Engage with a broad set of stakeholders to assess the potential impact of VPBs on Medicaid patients;
  3. Withdraw the proposal to require manufacturers to deduct the value of any cost-sharing assistance from best price and Average Manufacturer Price (AMP); and
  4. Delay and assess the impact that the proposal to redefine “line extensions” may have on incremental treatment improvements that can benefit patients.

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