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132 Organizations Ask for Key Medicare Part D OOP Reforms in Budget Reconciliation Package

September 9, 2021

Chairman Ron Wyden

Senate Committee on Finance

219 Dirksen Senate Office Building Washington, DC 20510

Chairman Frank Pallone

House Committee on Energy and Commerce 2125 Rayburn House Office Building Washington, DC 20515

Chairman Richard Neal

House Committee on Ways and Means 1102 Longworth House Office Building Washington, DC 20515

Chairman Bobby Scott

House Committee on Education and Labor 2176 Rayburn House Office Building Washington, DC 20515

Ranking Member Mike Crapo Senate Committee on Finance

219 Dirksen Senate Office Building Washington, DC 20510

Ranking Member Cathy McMorris Rodgers House Committee on Energy and Commerce 2157 Rayburn House Office Building Washington, DC 20515

Ranking Member Kevin Brady

House Committee on Ways and Means 1139 Longworth House Office Building Washington, DC 20515

Ranking Member Virginia Foxx

House Committee on Education and Labor 2101 Rayburn House Office Building Washington, DC 20515

Dear Chairman Wyden, Chairman Pallone, Chairman Neal, Chairman Scott, Ranking Member Crapo, Ranking Member McMorris Rodgers, Ranking Member Brady, and Ranking Member Foxx,

The 132 undersigned organizations representing older Americans, patients, family caregivers, people with disabilities, diverse communities, and healthcare providers are writing to urge you to address the unaffordable out-of-pocket (OOP) costs in the Medicare Part D program as you draft the budget reconciliation package.

The current OOP burden faced by beneficiaries impedes patient access to prescribed medications. These costs are especially acute when deductibles and benefits reset at the beginning of each year. A growing body of evidence shows increases in patient OOP costs lead to lower drug adherence, higher mortality, and increased overall healthcare costs. Earlier this year, the National Board of Economic Research (NBER) found that "patient cost-sharing introduces large and deadly distortions into the cost-benefit calculus." This finding remained true regardless of the beneficiaries’ socioeconomic status.1 Analysis of Medicare data found that OOP cost growth of just $10.40 per prescription leads to a 23 percent drop in total drug consumption and a 33 percent increase in monthly mortality. As cost-sharing increases, this stark rise in mortality is due to patients cutting back on life-saving medications such as antihypertensives, anticoagulants, and statins.

The number of Medicare beneficiaries facing high OOP costs for prescription drugs is growing. A new analysis by the Kaiser Family Foundation has found that the number of non-Low-Income Subsidy (LIS) beneficiaries reaching the catastrophic phase of the Part D benefit has increased since 2010. In 2019, almost 1.5 million beneficiaries had out-of-pocket expenses exceeding the catastrophic threshold of $5,100.2 This growth in the number of beneficiaries facing catastrophic costs comes even though the OOP spend required to reach the catastrophic phase grew substantially over the last decade ($4,700 in 2012 versus $7,050 in 2022).3,4

Millions of beneficiaries cannot afford their medication due to high cost-sharing requirements, and millions more will not be able to afford their medicines in the future unless Congress directly addresses this crisis. The below set of recommendations will help the sickest and most vulnerable Part D patients better afford their physicians prescribed medications.

Recommendations to Advance Affordability in Medicare Part D

  1. Congress should create an out-of-pocket maximum (i.e., an annual cap) on Medicare beneficiary Part D out-of-pocket expenses. Medicare is the only major insurer in the U.S. that lacks an OOP maximum. While all proposals under current consideration include an annual OOP cap, patients would derive greater benefit from a consistent, monthly cap on Part D OOP expenses. Patients report affordability concerns when monthly OOP costs exceed $200,5 which extrapolates to $2,400 annually. We encourage Congress to meet patients at this point of need by creating a monthly OOP cap or coalescing around a proposed annual cap of $2,400 or lower to provide meaningful relief for beneficiaries.
  • Any proposal that adopts an annual – rather than a monthly – OOP cap in Medicare Part D should be paired with a "smoothing mechanism." Smoothing would allow beneficiaries the option to evenly spread costs over a plan year, thereby avoiding large lump sum OOP expenses. Many beneficiaries cannot afford to make lump sum out-of-pocket payments at the pharmacy counter, leading to abandoned prescriptions and lower treatment adherence.
    • This flexibility should be available to all beneficiaries, at any time during the benefit year, regardless of a beneficiary's level of OOP spending. Ideally, beneficiaries should be able to utilize payment installments no later than their first prescription fill following the payment of their annual deductible.
  • Congress should ensure the program includes strong patient protections, such as hardship exceptions or other mechanisms to allow beneficiaries a payment grace period. There are legitimate reasons a beneficiary might miss a payment (e.g., illness

or hospitalization, relocation) that should not disqualify them from utilizing the flexibility. Further, plans should be required to notify patients when they are behind on their payments and inform them of the ability to apply for a hardship exception.

  • Congress should ensure that smoothing is the default position rather than requiring Medicare beneficiaries to opt-in or otherwise enroll. This approach will ease implementation and lower administrative barriers to participation.
  • Congress should look to CMS’s Part D Senior Savings Model,6 a program that allows patients with diabetes enrolled in participating Medicare Part D plans to access insulin for

$35 per monthly prescription, to determine if expanding a low-cost maximum copay model would broadly benefit beneficiaries or improve outcomes for patients with other conditions.

Do Not Use Utilize Methodologies Harmful to Medicare Beneficiaries

Addressing patient OOP costs is essential. Similarly, proposals to address systemic issues that lead to growing prescription drug costs should be evaluated. However, Congress should reject consideration of using the QALY or similar average metrics.7 QALY assessments assign a value between 0 (death) and 1 (perfect health) to the people for whom a given treatment is intended. People who are sicker,8 older, or have a disability9 are assigned lower values. QALYs also fail to account for health disparities, thereby incorporating a bias that can adversely impact communities of color. When applied to healthcare decision-making by payers, this can mean that treatments for these more vulnerable beneficiaries are deemed "too expensive" and therefore "not cost-effective" to cover. Due to these impacts, the U.S. has repeatedly rejected QALY-based assessments through legislation - including the Rehabilitation Act,10 Title II of the Americans with Disabilities Act,11 and the Affordable Care Act12 - and regulation.13 As Medicare is the primary source of health insurance for older adults and people with disabilities, utilizing QALYs or similar metrics in pricing would be particularly harmful to the very groups the program is intended to serve.

Conclusion

Congress must take action to address the unsustainable OOP burden faced by Medicare Part D beneficiaries. We call on your committees to include Part D reforms that ensure patients can access the medications needed to improve and maintain their health in the budget reconciliation package.

The undersigned patient advocacy organizations appreciate your consideration of our recommendations. If you would like to discuss these priorities further, please contact the Alliance for Aging Research's Vice President of Public Policy, Michael Ward, at mward@agingresearch.org.

Sincerely,

ACCSES--The Voice of Disability Service Providers

Aging Life Care Association Aimed Alliance

Allergy & Asthma Network Alliance for African Assistance Alliance for Aging Research Alliance for Patient Access Alliance Health Clinic

Alpha-1 Foundation

Alstrom Syndrome International American Academy of Allergy, Asthma &

Immunology

American Association for Respiratory Care American Association of Kidney Patients American Association on Health and

Disability

American Autoimmune Related Diseases Association

American Behcet’s Disease Association (ABDA)

American Cancer Society Cancer Action Network

American Society of Consultant Pharmacists

American Society on Aging Amyloidosis Support Groups, Inc. Arthritis Foundation

Association of American Indian Physicians Association of Black Cardiologists Association on University Centers on

Disabilities

Asthma and Allergy Foundation of America Autistic Women and Nonbinary Network Barth Syndrome Foundation

Beyond Type 1 CancerCare

Caregiver Action Network

CaringKind, The Heart of Alzheimer's Caregiving

Center for Independence of the Disabled, NY

Children with Diabetes Chronic Care Policy Alliance

Clinical Neurological Society of America ClinWiki

CLL Society

Coalition of Texans with Disabilities Coalition of Wisconsin Aging and Health

Groups

Color of Crohn's & Chronic Illness Cure HHT

Cutaneous Lymphoma Foundation

Davis Phinney Foundation for Parkinson's Debbie's Dream Foundation: Curing

Stomach Cancer

Dementia Alliance International Diabetes Leadership Council Diabetes Patient Advocacy Coalition Fabry Support & Information Group FORCE: Facing Our Risk of Cancer

Empowered

Foundation for Sarcoidosis Research Friends of Cancer Research

Fund for Community Reparations for Autistic People of Color's Interdependence, Survival, & Empowerment

Genetic Alliance

GI Cancers Alliance

Global Healthy Living Foundation Global Liver Institute

GO2 Foundation for Lung Cancer Hawai'i Parkinson Association Haystack Project

HD Reach Health Hats

HealthyWomen

Hepatitis C Mentor and Support Group- HCMSG

Hermansky-Pudlak Syndrome Network HFC

HIV + Hepatitis Policy Institute

ICAN, International Cancer Advocacy Network

International Essential Tremor Foundation International Foundation for Autoimmune &

Autoinflammatory Arthritis (AiArthritis) International Pemphigus Pemphigoid

Foundation JDRF

kids with heart natl assn for children's heart disorders, inc

Lakeshore Foundation Livpact

Lupus and Allied Diseases Association, Inc. Lupus Foundation New England

Lupus Foundation of America Melanoma Research Foundation Mental Health America

MLD Foundation

Movement Disorders Policy Coalition National Alliance for Caregiving National Association for Continence

National Association of Nutrition and Aging Services Programs

National Consumers League National Fabry Disease Foundation National Grange

National Health Council National Kidney Foundation

National Menopause Foundation National Organization for Tardive

Dyskinesia

National Psoriasis Foundation National Rural Health Association NeedyMeds, Inc

Neuropathy Action Foundation

Nevada Chronic Care Collaborative Noah Homes, Inc

Not Dead Yet

Organic Acidemia Association

Parkinson & Movement Disorder Alliance Partnership to Fight Chronic Disease Patient Empowerment Network

Patients Rising Now

Prostate Cancer International PSC Partners Seeking a Cure PXE International

Rare New England, Inc RASopathies Network Raymond Foundation RetireSafe

Second Wind Dreams Sick Cells StopAfib.org

Support Services of Virginia, Inc. Susan G. Komen

Syngap1 Foundation The AIDS Institute

The Bonnell Foundation: Living with Cystic Fibrosis

The Coelho Center for Disability Law, Policy and Innovation

The Gerontological Society of America The Headache and Migraine Policy Forum The Mended Hearts, Inc.

The Michael J. Fox Foundation for Parkinson's Research

Triage Cancer TSC Alliance

U.S. Pain Foundation

United Leukodystrophy Foundation UsAgainstAlzheimer's

Vasculitis Foundation VHL Alliance WomenHeart ZERO - The End of Prostate Cancer

 

1 Chandra, Amitabh, et al. “The Health Costs of Cost-Sharing.” National Bureau of Economic Research. 8 Feb 2021. www.nber.org/papers/w28439.

2 Kaiser Family Foundation. Millions of Medicare Part D Enrollees Have Had Out-of-Pocket Drug Spending Above the Catastrophic Threshold Over Time. 23 Jul 2021. https://www.kff.org/medicare/issue-brief/millions-of-medicare-part-d- enrollees-have-had-out-of-pocket-drug-spending-above-the-catastrophic-threshold-over-time/

3 Kaiser Family Foundation. The Medicare Part D Prescription Drug Benefit. Oct 2017. https://files.kff.org/attachment/Fact- Sheet-The-Medicare-Part-D-Prescription-Drug-Benefit

4 Centers for Medicare and Medicaid Services. Announcement of Calendar Year (CY) 2022 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies. Table V-2. 15 Jan 2021. https://www.cms.gov/files/document/2022- announcement.pdf

5 PAN Foundation. Snapshot of 2020 Healthcare Costs. Accessed 20 Aug 2021. Jan 2021. https://www.panfoundation.org/app/uploads/2021/01/PAN-Foundation_MC_January-2021-Survey.pdf

6 Centers for Medicare and Medicaid Services. Part D Senior Savings Model. Accessed 20 Aug 2021. Updated 11 Aug 2021. https://innovation.cms.gov/innovation-models/part-d-savings-model

7 American Association of People with Disabilities. Reject Health Policies that Discriminate. Apr 2021. https://www.aapd.com/wp-content/uploads/2021/04/Updated-Open-Letter-Reject-Health-Policies-That-Discriminate.pdf

8 Pyenson, Bruce, et al. “Assessing the Value of Therapies in Alzheimer’s Disease: Considerations to Create a Practical Approach to Value.” 12 May 2021. https://www.agingresearch.org/app/uploads/2021/05/Assessing-the-Value-of-Therapies-in- Alzheimer%E2%80%99s-Disease_FINAL.pdf

9 National Council on Disability. “Quality-Adjusted Life Years and the Devaluation of Life with Disability: Part of the Bioethics and Disability Series.” 6 Nov 2019. https://ncd.gov/sites/default/files/NCD_Quality_Adjusted_Life_Report_508.pdf

10 29 U.S. Code § 794, 2017.

11 42 U.S. Code § 12131, 1990.

12 42 U.S.C. 1320e-1

13 Sullivan, Louis. “Oregon Health Plan is Unfair to the Disabled.” The New York Times. 1 Sept 1992