COMMENTARY

Stephanie Tran, PharmD, Discusses How a Value-Based Program Better Covers CAR-T Therapies

December 13, 2018

By Julie Gould

Podcast Series: In this episode of the First Report Managed Care podcast, Stephanie Tran, PharmD, clinical consultant pharmacist at the University of Massachusetts Medical School, discusses the Massachusetts Medicaid Program, MassHealth, and explains why the program recently transitioned from volume‑ to value‑based care and how it aims to provide appropriate access to ensure that treatment centers will appropriately be reimbursed.

 

 

Podcast Transcript

First Report Managed Care:  Hello, First Report readers. My name is Julie Gould, associate digital editor. I'm joined today by Stephanie Tran, clinical consultant pharmacist at the University of Massachusetts Medical School.

Thank you for taking time to speak with us today. To get started, can you tell us a little bit about your background, current position, and areas of interest?

Dr Tran:  Sure. I graduated with a Doctor of Pharmacy degree from Northeastern University School of Pharmacy. Then I completed a post‑graduated, year‑one residency at the University of Massachusetts Medical School Clinical Pharmacy Services, where I currently serve as a clinical consultant pharmacist.

My primary responsibilities include developing and maintaining comprehensive, evidence‑based guidelines primarily for oncology agents. I also manage the CAR‑T Monitoring Program, something I'll share more about in a bit.

I provide pharmacy consultations for medically‑complex Medicaid members and their families as a member of the Special Populations Pharmacist Team. Finally, I am a preceptor for pharmacy residents and pharmacy students who are on rotation at our site.

My areas of interest include oncology agents such as CAR‑T therapies, as well as clinical pathways.

First Report Managed Care:  Can you explain what the Massachusetts Medicaid Program, MassHealth is and how the program better covers CAR‑T therapies?

Dr Tran:  MassHealth is the name of the Medicaid and Children's Health Insurance Program that provides health benefits to qualifying children, families, seniors, and people living with disabilities in Massachusetts.

MassHealth recently transitioned from volume‑ to value‑based care with the implementation of Accountable Care Organizations. There's an estimated 1.8 million members covered under MassHealth, which equates to about one out of every four people in Massachusetts having Medicaid coverage.

The CAR‑T therapies ‑‑ Kymriah and Yescarta ‑‑ are infused inpatient due to the potential for adverse reactions. Prior to carve‑out and prior to FDA approval of these two therapies, any treatments administered inpatient would fall into a payment methodology in which all costs associated with hospitalization will be billed to the disease‑related groups, or DRGs.

Individual hospitals negotiate with a vendor to define payment amount by DRGs, bills that are associated with their hospitalization. These payments are called APAD, or adjudicated payment per discharge. Based on what the charge is claims may or may not head out for an outlier.

Given that CAR‑T therapies have a list price upwards of $425,000, the claims will certainly trigger an outlier payment, and that cost will reimburse hospitals with a portion of the cost. Given that it's proprietary, what hospitals pay for the CAR‑T treatment, the cost of the product could be unverified.

Since these treatments are promising clinical advances, MassHealth aims to provide appropriate access to ensure that treatment centers will appropriately reimburse.

As such, it was clinically and financially appropriate to carve‑out CAR‑T therapies from the inpatient payment methodology, the APAD, to ensure fair reimbursement and access to treatment. The carve‑out was effective on March 1st, 2018.

First Report Managed Care:  What is the carve‑out policy created within MassHealth?

Dr Tran:  The carve‑out was a significant change to MassHealth reimbursement. A state plan amendment, or SPA, had to be submitted to the Center for Medicare and Medicaid Services, or CMS. Essentially, inpatient hospitalizations are still billed with associated DRGs and hospitals are reimbursed by the APAD.

However, post‑carve‑out implementation, if the hospitalization includes Kymriah or Yescarta, then the cost of these treatments specifically would be carved‑out, or in other words, separated from what the hospital submits for payment.

The carve‑out drugs would be submitted to MassHealth on a separate bill that includes a copy of the invoice, which should account for the actual acquisition cost. Because carve‑out drugs will not be included in the APAD rate, they could be subject to federal rebate.

The carve‑out ensures that hospitals are reimbursed appropriately with consideration of the price of outlier treatments such as CAR‑T therapies. Because of this, the CAR‑T Monitoring Program also protects the payer in instances where the outcomes‑based agreement exists and supplements this carve‑out policy.

First Report Managed Care:  How does MassHealth track how members are responding to CAR‑T treatment in the context of outcomes‑based agreements?

Dr Tran:  With any Medicaid program, the budget expense for high‑cost, potentially curative treatments are hot topics. As such, it is important for the Medicaid program to know at precise moments how many members will receive CAR‑T treatments, how many have received CAR‑T treatments, and whether these members respond to these promising therapies.

The CAR‑T Monitoring Program was created to be a centralized information source to monitor and understand the real‑world outcomes of MassHealth members.

MassHealth provides appropriate access to treatments for members. Given how high profile these medications are, MassHealth is interested in the outcomes of such treatments.

Provider outreach is conducted 30 days post‑infusion, and every six months thereafter to report clinical responses. Information about adverse reactions, date of relapse, and treatment plan going forward is also collected under the monitoring program.

Novartis has an outcomes‑based contract with the treatment facilities but not the payers, in which the company will not invoice for Kymriah for the treatment of acute lymphoblastic leukemia, or ALL, if it was not effective 30 days post‑infusion.

In cases where members do not respond to treatment, the manufacturer will not invoice the treatment facility, and the treatment facility should not include the cost of Kymriah in the bill to MassHealth.

The monitoring program flags members who do not respond to Kymriah for the treatment of acute lymphoblastic leukemia to ensure that payment for the treatment is not released to treatment facilities, which gives the Medicaid program assurance that the Novartis outcomes‑based contract functions as intended.

Even if members do not respond to treatment, the treatment facility may bill MassHealth for ancillary costs associated with the CAR‑T treatment course, which may average around $33,000 per individual.

Although some media reports suggest that these ancillary costs may be up to 10‑times that amount. The concern for appropriate reimbursement may make some treatment centers hesitant to take on treating patients with CAR‑T therapies.

It's anticipated that as CAR‑T therapies are on the market longer, physicians can monitor, detect, and manage adverse reactions in a timelier manner.

It's also anticipated that there will be a higher response in the future as the screening process for CAR‑T therapies improve. With the monitoring program, MassHealth can track how members are responding as time goes on.

First Report Managed Care:  What are future considerations for stakeholders in covering the high cost of CAR‑T treatments?

Dr Tran:  Covering the cost of the CAR‑T agent itself is one thing, but reimbursement for the treatment course ‑‑ which includes the ancillary treatments ‑‑ should be considered.

Currently, patients are managed inpatient due to the severity of adverse events. In the future, patients may receive off‑the‑shelf, CAR‑T treatments, or receive infusion and care in an outpatient setting, stakeholders will have to consider reimbursement in the outpatient setting.

Treatment centers face financial toxicity when they're not reimbursed for treatments. Given the high cost of the products themselves, treatment centers will be wary of treating the sickest of patients. The adequate reimbursement of treatment centers is essential for continuing clinical advances.

At the time of our interview, we are about a year out from the first FDA approval of CAR‑T therapies, and the list prices of these treatments made headlines.

Not much survival data is available, it remains to be seen whether updated survival data for CAR‑T immunotherapy will change the current list price, or will be reflected in the list prices of future generations of CAR‑T immunotherapy.

Stakeholders will have to navigate the administrative complexities of value‑based methodology. Currently, the only publicly‑known CAR‑T contract is between Novartis and treatment centers. Payers are increasingly becoming more interested in value‑based agreements in the landscape of high costs and promising treatments.

Finally, stakeholders should keep the CAR‑T pipeline in mind as there are trials of CAR‑T immunotherapy underway in earlier lines of treatments, as well as in non‑hematological, oncology indications.

The technology behind CAR‑T itself is evolving. It's anticipated that future CAR‑T generations will perform better and be associated with less adverse effects.

First Report Managed Care:  Finally, do you have any further comments to add regarding the CAR‑T therapies or the MassHealth program?

Dr Tran:  CAR‑T therapies are currently the only treatment on MassHealth's carve‑out list, but they will not be the only therapies. Any drugs with a list price far greater than the APAD rates negotiated with individual hospitals and which would distort the APAD rate will be considered for future inclusion on the carve‑out list.

The FDA approval of CAR‑T therapies was a significant event for MassHealth since MassHealth provides the payment methodology to account for the price of these drugs and ancillary treatments.

MassHealth remains committed to tracking the pharmaceutical pipeline and estimating the budget impact of novel, potentially curative treatments. MassHealth will add agents to the carve‑out list and create monitoring programs as appropriate.

MassHealth is also exploring how to reimburse for drugs in general based on value. MassHealth recognizes the importance of adequate member access to life‑saving treatments. It's also committed to supporting value‑ or outcomes‑based programs.

First Report Managed Care:  Thank you so much.

Dr Tran:  Thank you!