NPC Comments on Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021

March 2, 2020

The Honorable Seema Verma
Administrator, Centers for Medicare and Medicaid Services
U.S. Department of Health and Human Services
200 Independence Ave., SW
Washington, DC 20201

Submitted via

RE: Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021; Notice Requirement for Non-Federal Governmental Plans (CMS-9916-P)

Dear Administrator Verma, 

Thank you for the opportunity to comment on the Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021; Notice Requirement for Non-Federal Government Plans proposed rule (CMS-9916-P). NPC shares the administration’s goal of building a health care system that delivers affordable, high-value care to Americans.

NPC is a health policy research organization dedicated to the advancement of good evidence and science and to fostering an environment in the United States that supports medical innovation. NPC is supported by the major U.S. research-based biopharmaceutical companies. We focus on research development, information dissemination, education and communication of the critical issues of evidence, innovation and the value of medicines for patients. Our research helps inform important health care policy debates and supports the achievement of the best patient outcomes in the most efficient way possible.

NPC appreciates the previous efforts of the administration to promote a consumer-driven health care system. Patient cost-sharing is one opportunity to change consumer behavior. Ideally, higher cost-sharing through premiums, deductibles, and copays discourage only the utilization of low-value care. However, these financial incentives also require that consumers have the ability to distinguish between high-value and low-value services and that incentives do not have unintended consequences. Research has shown that excluding certain high-value services from the deductible and offering immediate first-dollar coverage can be cost-neutral or even cost-saving. We are encouraged to see the options describing how qualified health plans could implement value-based insurance designs (VBID), and the solicitation of comments on principles related to VBID that could be adopted by the Department of Health and Human Services (HHS). We offer suggestions below to ensure that VBID programs deliver on the goal of empowering consumers to receive high-value services at lower costs. 

Our comments focus on:

  • Qualified Health Plans Should be Encouraged to Incorporate Pre-Deductible Coverage of High-Value Services
  • VBID Activities Should Incorporate Clinical Nuance
  • Protections Should be in Place for Patients Requiring Different Treatment Options
  • Research on Employer-Sponsored Consumer-Directed Health Plans and “Better Practices” Can be Instructive for Qualified Health Plan Sponsors
  • Proposals Which Would Increase Patient Out-of-Pocket Costs Should be Re-evaluated

Qualified Health Plans Should be Encouraged to Incorporate Pre-Deductible Coverage of High-Value Services

The proposed rule specifically mentions the use of differential cost-sharing for high-value and low-value services. We are encouraged to see HHS consider pre-deductible coverage for high-value services, including chronic disease drugs, in its zero-cost sharing design. Previous NPC research indicates that pre-deductible coverage of a range of chronic disease drugs can be cost-neutral or potentially offer cost-savings for payers.

In 2018, NPC collaborated with VBID Health to examine the financial impact of health savings account (HSAs) and high-deductible health plan (HDHP) reform to provide pre-deductible coverage. If enhancements in prescription drug coverage are not offset by reductions in spending on other services, adding pre-deductible coverage for medications could increase premiums and actuarial value. However, in the assessment of 57 drug classes used to treat 11 common chronic conditions, the researchers found these changes would have only a modest impact on premiums. The report found this change would lower consumer out-of-pocket costs and result in premium increases of less than 2%.[1] An even more modest impact on premiums could be achieved with more nuanced cost-sharing strategies to create additional incentives for the use of high-value medicines. While this research was conducted on the employer market, and there are inherent differences between the employer markets and the health exchange populations, this study can be instructive as HHS considers the adoption of VBID more broadly. 

In 2019, a follow-up issue brief was published that examined the impact on federal tax expenditures if pre-deductible coverage for chronic disease medications was allowed. The evidence suggested that pre-deductible coverage of chronic disease drugs and services would improve the health of those with chronic conditions and would prevent downstream costs for services such as emergency department visits and hospitalizations. Additionally, the report found that pre-deductible coverage of chronic disease prevention drugs and services results in a “significant” uptake of HDHPs in general, leading to additional government savings. Again, this issue brief was specific to the employer market, but it is also possible that pre-deductible coverage of high-value chronic disease medications in QHPs with VBID could offer an important choice for consumers as they look for health coverage.[2]

To that end, NPC applauds the recent decision by the Internal Revenue Service (IRS) to expand the scope of benefits available to patients with first-dollar, pre-deductible coverage.[3] We also support the flexible approach that HHS outlined in the proposal, by not mandating or restricting which items and services were deemed high-value or low-value. This allows appropriate flexibility as research and recommendations for unique patient populations change. In the final rule, and in subsequent notices to plan sponsors, we recommend HHS emphasize that the services listed in the rule are merely suggestions and plans are not restricted to incorporating VBID principles only to items and services on “the list.” Multiple versions of selected medications suggested for use in VBID programs should be included to ensure that stakeholders understand they have more than one option. 

In addition, one of the basic tenets of VBID is that value equals the clinical benefit achieved for the money spent. Branded products may have a higher price than generics, but for many patients and clinical indications, these higher prices may still be money well spent.[4] As HHS looks beyond 2021, we would like the agency to consider additional high-value areas that could be added to the list, beyond therapeutic classes of drugs dominated by commoditized generic drugs, and ensure that plans are taking a holistic approach and covering a variety of high-value items, services, providers, and settings for their care.

We also encourage HHS to further consider how to define low-value services. Caution is warranted to ensure that treatments that are low-value for the majority of the population are not restricted for the minority of the population for whom the treatments are high-value. Secondly, in today’s current payment system there are many reasons that a medication may be on a non-preferred drug list beyond whether the drug is high- or low-value. Care should be made to ensure cost-sharing and the categorization of “overused services” consider patient and disease-specific characteristics. 

Finally, it is important to keep in mind the timing needed to see changes in total health care costs. Early VBID programs varied in the impact on health spending at one and three years after initiation.[5] A more recent systematic review of VBID programs found to have a neutral effect on spending while some programs had a decrease in spending after year two.[6] For that reason, it may be necessary for HHS to evaluate the return on investment (ROI) for a VBID intervention beyond one year and ensure adequate calibration to measure success. 

VBID Activities Should Incorporate Clinical Nuance

VBID is driven by the concept of clinical nuance, which recognizes that medical services differ in the benefit they provide, as well as the benefit each individual patient experiences from a particular service. As such, VBID is a key tactic that payers and purchasers can use to promote access to high-value medications. Care must be taken to ensure that treatments that are low-value for most of the population are be restricted to the minority for whom the drugs is high-value. Therefore, care must be taken to ensure appropriate patient access.

The concept of clinical nuance and condition-specific benefit design is especially relevant for specialty medications. Specialty medications deliver both great clinical benefits and have higher costs. However, the cost of specialty medications, as opposed to the clinical benefit and ultimate value, has historically been the sole focus of typical approaches to insurance design. Alternatively, VBID offers a way to account for clinical nuance and the fact that many specialty medications deliver improvements in health and health-related quality of life at prices that are lower or competitive with many commonly accepted medical innovations.[7]

In 2014, NPC co-authored a report with the Center for Value-Based Insurance Design at the University of Michigan on supporting patient access to specialty medications through VBID. With specialty medications representing an ever-larger portion of all prescription drug spending, many payers and purchasers have established requirements for high cost-sharing. These requirements may trigger cost-related non-adherence for some patients. To make VBID work effectively for specialty medications, it will be critical to anticipate and address some of the challenges associated with clinically-nuanced benefit designs. Specifically, it will be essential that plans and plan sponsors:

  • Prepare for administrative complexity;
  • Establish incentives that engage patients early;
  • Communicate effectively about VBID;
  • Integrate VBID with provider-facing initiatives; and
  • Understand that comprehensive and far-reaching VBID implementation for specialty pharmaceuticals may not be feasible immediately, but that important headway can be made by beginning with certain high-priority medications or conditions.[8]

We support the proposal to encourage qualified health plans to incorporate VBID into their overall plan design. We also welcome the opportunity to continue a dialogue with the agency regarding continued implementation and support of VBID adoption, particularly as the initiative matures.

Protections Should be in Place for Patients Requiring Different Treatment Options

The concept of aligning patients’ out-of-pocket costs, such as copayments, coinsurance, and deductibles, with the value of a health care service is the basic premise of VBID. This approach to designing benefit plans recognized that specific health services have different levels of value. Thus, VBID programs are designed with the tenets of clinical nuance in mind, which recognize that 1) value equals the clinical benefit achieved for the money spent, 2) medical services differ in the amount of health produced, and 3) the clinical benefit derived from a specific service depends on the consumer using it, and when, where and by whom the service is provided. A properly designed VBID considers that the same pharmaceutical agent can be both high-value and low-value, depending on patient demographics, the disease treated, or the stage of a specific clinical condition.[9]

Tiered formularies, originally designed to incentivize greater use of generic medications, are used to encourage lower-cost, first-line therapies. However, those patients that cannot be prescribed (e.g., due to contraindications from a drug allergy, drug-drug interactions, or disease severity) or do not respond to a first-line, lower-cost medication should be held harmless with regards to cost-sharing. In these situations, the first-line drug is no longer high-value for that patient, and a clinically-indicated, higher-cost alternative can be the higher-value choice. For that patient, the level of consumer cost-sharing for the higher-cost medication should be aligned with the clinical value, not the price.

We recommend HHS encourage health plans using VBID to incorporate appropriate patient protections in the form of an exceptions and appeals process. The existing exceptions and appeals process used in the Part D prescription drug benefit, particularly the ability for beneficiaries to request tiering exceptions, could serve as a model. Such a plan would still emphasize lower-cost therapies for initial use when clinically appropriate but employing a dynamic approach would protect those patients who diligently follow the required steps for their specific condition but need alternative treatment options. These “good soldiers” should be held harmless financially.

Additionally, HHS should provide guidance to plans on when it would be ethical and fair to reduce cost-sharing to steer appropriate medication use. In 2017, NPC convened an expert roundtable to initiate a discussion with payers, patients, employers, and researchers to identify principles for when it is less acceptable for patients with the same condition to have different costs. Findings from this roundtable could offer guidance to the agency regarding when it is less acceptable for patients to have different out-of-pocket costs for the same or similar conditions. These include:

  1. “Try and Fail” is important. If the initial lower-cost therapy is unsuccessful, patients should have access to higher-cost therapy and lower out-of-pocket costs. This is also known as the “reward the good soldier” approach, cited above.
  2. Benefits are certain and significant. If there is high confidence the health benefits of a treatment are significant, then financial barriers should be lowered.
  3. Costs must align with benefits. If the treatment costs are balanced with better effectiveness and safety, then cost-sharing should be lower.
  4. Don’t penalize patients for “bad luck.” If patients need higher-cost treatment based on their biology or genetics, then cost-sharing should be reduced.
  5. Lower, but do not eliminate, differences in out-of-pocket costs. Cost-sharing differences incentivize trying lower-cost treatments first, but big jumps in costs for patients should be avoided.[10]

As HHS incorporates VBID principles into QHPs, patients should be protected from financial penalties for situations that are out of their control, either due to biology, genetics, or another clinical condition. We urge the agency to incorporate exceptions and appeals processes for patients enrolled in VBID plans and establish guiding principles for VBID models to make sure beneficiary cost-sharing is protected.

Research on Employer-Sponsored Consumer-Directed Health Plans and “Better Practices” Can be Instructive for Qualified Health Plan Sponsors

The proposed rule also solicits comments on principles that the agency could adopt to establish what constitutes a “value-based plan,” perhaps by establishing minimum standards, and identifying other obstacles to implementation. In 2014, NPC conducted a multi-phase research project investigating pharmacy benefit designs attached to consumer-directed health plans (CDHPs). The research was intended to identify best practice approaches for CDHPs and pharmacy benefits and understand the health and economic impact of best practice models and evidence about higher-value approaches to CDHP pharmacy benefit design. The research project revealed that communication with patients in preparation for the transition to CDHPs, coverage of preventive care, promotion of wellness activities, provision of educational tools to help patients navigate health care choices, and monitoring outcomes, and making any needed adjustments are all key to successfully rolling out CDHPs. [11]

The research also identified the following “better practices” for employer-sponsored CDHPs and pharmacy benefits. Some innovations have a broad impact, providing support and aligning incentives across the workforce to improve health and health-care decision-making. Other innovations are targeted at mitigating the harmful impacts of blunt CDHP and prescription benefit plan design on high-need, low-income patients. Key differentiating “better practices” include:

  • Implementation of a value-based approach to prescription drug coverage in health reimbursement account (HRA)-based plans;
  • Implementation of a broad list of preventive drugs, combined with a value-based approach in health savings accounts (HSAs);
  • Use of integrated health and productivity data in plan design and performance measurement;
  • Lower net deductibles (e.g., deductibles minus any company contributions to a health savings account or health reimbursement account);
  • Varying contributions based on income (to protect low-income patients) or linking to incentives for wellness and consumer behaviors; and
  • Enabling front-loaded contributions to allow HRA account contributions available early in the year (when applicable).[12]

While this research project was focused on employer-sponsored health plans, the key research findings and better practices are applicable to qualified health plans (QHPs) as well. As HHS continues its work to broaden access to value-based insurance design, particularly for enrollees in QHPs with high deductibles, we urge the agency to consider these findings and consider ways that HHS can support enrollees who have selected these plan options.

Proposals Which Would Increase Patient Out-of-Pocket Costs Should be Re-evaluated

Multiple studies have concluded that higher copayments and out-of-pocket (OOP) costs lead to reduced medication adherence, worse disease control, and increased hospitalizations.[13],[14],[15] To minimize these unwanted outcomes amidst rising deductibles, copay assistance funds in the form of coupons or co-pay cards are frequently offered. These funds have typically counted towards the beneficiary’s deductible. However, more recently copay accumulator adjustment programs (CAAP) have been implemented in which the patient assistance is no longer credited towards the deductible, and therefore, the patient is exposed to greater out-of-pocket costs. The financial barrier created by CAAP has been shown to lower treatment adherence and increase patient discontinuation — unwanted effects that can impact patient health.[16] Therefore, the proposed rule to allow plans to exclude the value of patient assistance programs from total cost-sharing limits would be counterintuitive to the administration's goals to lower patient out-of-pocket costs and we recommend it should be re-evaluated. 

Overall, NPC encourages HHS to continue to encourage QHP sponsors to adopt VBID principles. We believe that by incorporating these suggestions, VBID programs may deliver on the promise to empower consumers to receive high-value services at lower costs. Without careful consideration of these suggestions, there is a potential unintended consequence for patients with unique health care needs. We thank you for your consideration of our comments and would be happy to discuss these ideas further. 


Jennifer S. Graff, PharmD
Vice President, Comparative Effectiveness Research
National Pharmaceutical Council 


[1] VBID Health. Financial Impact of HAS-HDHP Reform to Improve Access to Chronic Disease Management Medications.
[2] VBID Health. Uptake and Federal Budgetary Impact of Allowing Health Savings Account-Eligible High Deductible Health Plans to Cover Chronic Disease Drugs and Services Pre-Deductible.
[3] Internal Revenue Service. Additional Preventive Care Benefits Permitted to be Provided by a High-Deductible Health Plan Under Sec. 223 (Notice 2019-45) (July 17, 2019). Accessible online:
[4] Fendrick AM, Buxbaum J, Westrich K. Supporting Consumer Access to Specialty Medications Through Value-Based Insurance Design. (June 10, 2014)Accessible online:
[5] Ibid.
[6] Agarwal R, Gupta A, Fendrick AM. Value-Based Insurance Design Improved Medication Adherence Without an Increase in Total Health Care Spending. Health Affairs. 2018;37(7):1057-1064.
[7] Fendrick AM, Buxbaum J, Westrich K. Supporting Consumer Access to Specialty Medications Through Value-Based Insurance Design. (June 10, 2014)Accessible online: specialty-medications-npc-final-web_0.pdf
[8] Ibid.
[9] University of Michigan Center for Value-Based Insurance Design. A ‘Dynamic’ Approach to Consumer Cost-Sharing for Prescription Drugs. September 14, 2016.
[10] Graff JS, Shih C, Barker T, Dieguez G, Larson C, Sherman H, Dubois RW. Does a One-Size-Fits-all Cost-Sharing Approach Incentivize Appropriate Medication Use?  A Roundtable on the Fairness and Ethics Associated with Variable Cost Sharing. J Manag Care Spec Pharm. 2017;23(6):621-7.
[11] National Pharmaceutical Council. Consumer-Directed Health Plans: Pharmacy Benefits & “Better Practices” (September 30, 2014).
[12] Ibid.
[13] Goldman DP, Joyce GF, Zheng Y. Prescription Drug Cost Sharing: Associations with Medication and Medical Utilization and Spending and Health. JAMA. 2007;298(1):61-69. doi:10.1001/jama.298.1.61
[14] Trivedi AN, Moloo H, Mor V. Increased Ambulatory Care Copayments and Hospitalizations Among the Elderly. N Engl J Med. 2010;362(4):320-328.
[15] Gourzoulidis G, Kourlaba G, Stafylas P, Giamouzis G, Parissis J, Maniadakis N. Association between copayment, medication adherence and outcomes in the management of patients with diabetes and heart failure. Health Policy. 2017;121(4):363-377.
[16] Sherman B, Epstein A, Meissner B, Mittal M. Impact of a Co-pay Accumulator Adjustment Program on Specialty Drug Adherence. Am J Manag Care. 2019;25(7):500-505.