NPC Submits Comments on CMS Request for Information on New Direction for Innovation Center

November 20, 2017

The Honorable Seema Verma
Centers for Medicare and Medicaid Services
Department of Health and Human Services
Room 445-G, Hubert H. Humphrey Building
200 Independence Avenue, SW
Washington, DC 20201

RE: Request for Information: Centers for Medicare and Medicaid Services: Innovation Center New Direction

Submitted electronically via:


Dear Administrator Verma:

The National Pharmaceutical Council (NPC) shares your interest in fostering an affordable, accessible health care system that puts patients first. With this in mind, NPC appreciates the Centers for Medicare and Medicaid Services (CMS) Request for Information (RFI) on a new direction for the Innovation Center (CMMI). We applaud you for seeking “to promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes.” [1]

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 critical health care policy debates and supports the achievement of the best patient outcomes in the most efficient way possible.

NPC welcomes this opportunity to provide input on CMMI’s new direction. Our comments on CMMI’s proposed guiding principles and potential models are below.


  1. Guiding Principles

NPC supports many of the concepts embedded in the guiding principles identified by CMMI, including focusing on market choice and competition, incentivizing value, aiming for patient centricity, ensuring transparency in design and evaluation, making models voluntary, and utilizing small-scale testing; we urge codification of these principles through the rulemaking process. We provide more detailed comments on the patient centricity principle below.

  1. Patient-Centered Care

Patient centricity is critical to the success of CMMI’s demonstrations, and NPC fully supports the patient-centered care principle: “Empower beneficiaries, their families, and caregivers to take ownership of their health and ensure that they have the flexibility and information to make choices as they seek care across the care continuum.” Strong patient centricity can be achieved through patient engagement, recognition of differing patient preferences, and critical patient access protections.

  1. Patient Engagement

NPC encourages CMMI to use the Partnership to Improve Patient Care’s (PIPC) patient engagement roadmap, “Advancing Patient Centered Approaches to Value-Based Care: A Roadmap to Increased Patient Engagement at CMMI,” to guide strong patient engagement.[2] PIPC specifically recommends:

  • Improving oversight of CMMI by creating a Patient Advisory Panel to ensure patient-centeredness in the agency’s work,
  • Requiring CMMI to follow a consistent process to seek input from patients and caregivers both early in the development of new demonstrations and throughout the implementation and evaluation process, and
  • Improving the transparency of model test designs and evaluation results.
  1. Recognition of Differing Patient Preferences

Patient preferences for treatments vary, and CMMI should build flexibility into its demonstrations to recognize and accommodate these differences. For example, in a recent survey of stakeholder preferences, when patients and caregivers were questioned on the trade-off between survival and quality of life (QoL), patients with breast cancer preferred improved survival over improved QoL, while caregivers of those with Alzheimer’s disease preferred improved QoL over improved survival. [3] When breast cancer patients were disaggregated into Stage 3 and Stage 4, however, Stage 3 patients preferred survival and QoL improvement about equally, while Stage 4 patients preferred survival improvement.

Similarly, differences exist between patient preferences and provider assumptions about those preferences. For example, a study of lung cancer patients found that patients place a higher value on survival than providers, who valued factors such as improvement of symptoms and toxicity.[4]

  1. Patient Access Protections

NPC strongly recommends that CMMI preserve the existing patient access protections in the market-based Medicare Part D program, most notably the six protected classes. The original protected classes’ policy was created by CMS in 2005 and codified by Congress in 2008. The existing policy has served patients well. Protected classes ensure that Medicare beneficiaries have access to substantially all medications within these drug categories.

The protected classes are used to treat conditions for which it is most critical to provide patient-centered care and to consider heterogeneity of treatment effect (HTE) in treatment decision-making. Different patients can have very different responses when it comes to different treatment options. The treatment that is best for most patients may not be the one that is right for an individual. NPC and other organizations have conducted extensive research examining HTE and the policy implications of a one-size-fits-all approach to clinical and formulary decision-making. There are a number of peer-reviewed studies and educational materials that show that it is detrimental to both patients and payers to restrict treatment choices based on the response of the “average population.”[5]


  1. Potential Models

NPC supports the exploration of market-based models that incentivize value for patients. We recommend prioritizing models that take a holistic approach to value and the care continuum. A holistic approach to value includes a balance of both cost and quality, rather than a singular focus on either one. A holistic approach to the care continuum moves beyond care silos and takes an integrated view across all types of care.

NPC recommends mandating that detailed pre- and post- observational data collection be performed for advanced alternative payment models (APMs), new payment mechanisms, and other changes to incentives where care delivery will be altered using economic or cost levers. Such payment changes have the potential to alter care delivery in unintended ways. Measuring these changes should be a companion to quality measures and reviewed and considered during subsequent evaluations and revisions.

  1. Expanded Opportunities for Participation in Advanced APMs

Market-based advanced APMs can be effective vehicles to incentivize value. It will be incumbent upon CMMI to ensure that incentives are appropriately aligned to protect against both overuse and underuse of health care resources.

  1. Principles for Bundled Payments

Bundled payments, in particular, must be approached with caution. A poorly designed bundle can incentivize underuse of services and result in patients not receiving needed care.[6] NPC recommends adherence to three principles for bundled payment:

  • Bundled payments should be adequate for the care needed to achieve optimal patient outcomes. This includes setting an appropriate time frame, providing sufficient reimbursement for services and technology, and targeting a homogenous population.
  • Evidence-based treatment variability should be incorporated into the bundled payment, including risk adjustment as needed and allowances for patient choice.
  • Quality measures should be used to ensure appropriate care in a bundled payment program. Quality measures should encourage appropriate care regardless of health status and should have financial implications for providers.

Bundled payments should only be used if quality measures for the condition in question have been optimized and are robust enough to ensure patients are protected against the underuse of health care resources. Bundled payments also should include mechanisms for payment for new innovation and novel treatments, and payments should be adjusted regularly to account for new clinical evidence, particularly in areas where evidence is changing at a rapid rate, such as oncology.

  1. Optimizing Quality Measurement

Although quality measures can reinforce value incentives and promote system-wide improvement, there are many gaps in existing measure sets. To address these widespread gaps in accountable care quality measure sets, the following three types of measures should be used and promoted in quality measurement:

  • Outcome measures, which are meaningful to patients and providers, allow for flexibility and innovation in improving care, and can efficiently replace multiple process measures;
  • Cross-cutting measures, which assess quality of care across conditions, settings and time; and
  • Patient-reported measures, which emphasize the outcomes that matter most to patients, such as functional status and quality of life.[7]

NPC and Discern Health have developed comprehensive quality measure landscape guides for accountable care systems, one with a broad condition focus[8] and one with a specific focus on oncology.[9] Other stakeholders have found these guides to be useful references as they delve into quality measurement, and we trust they also will be of value to CMMI.

  1. Optimizing the Role of Pharmaceuticals in Accountable Care Organizations

Pharmaceuticals have an important role in accountable care organization (ACO) success in achieving cost and quality benchmarks. Optimizing medication use can improve patient outcomes and reduce costs.[10] There are leaders in the field of ACO medication optimization whose successful case studies can provide a roadmap for others. [11],[12],[13] CMMI should look to these case studies to help design APMs that can optimize the use of pharmaceuticals to improve quality of care and health outcomes while reducing total costs of care.

  1. Consumer-Directed Care and Market-Based Innovation Models

NPC strongly supports the concepts of consumer-directed care and market-based innovation models. We reiterate our points about the importance of patient engagement, recognition of differing patient preferences, and patient access protections from Section I.A. above.

NPC cautions that there may be unintended consequences stemming from the use of consumer price sensitivity as an incentive. Studies have found that increasing patient cost-sharing reduces the use of both high- and low-value care.[14] This effect could be magnified among the vulnerable Medicare and Medicaid populations. Over 80 percent of Medicare beneficiaries have more than one chronic condition, so even seemingly small changes in out-of-pocket costs can become cumulatively large for many beneficiaries.  

  1. Prescription Drug Models

NPC supports the concept of value-based agreements (VBAs), but notes there are currently barriers to the broader use of such agreements. The Federal Anti-Kickback Statue and Medicaid best price requirements are key barriers, as is the inability to contract for outcomes that are outside of the FDA-approved label.[15],[16] Regulatory changes are needed outside of CMMI to facilitate VBAs, and we encourage CMMI to work with other agencies to address these barriers. VBAs would also be further facilitated by providing Medicare Part D plans with greater access to Part A and B claims.

NPC’s ongoing research with the Duke-Margolis Center for Health Policy suggests that for every VBA that is public, there are three more that are not. These agreements represent additional learning opportunities about what does and does not work well for VBAs, and we would be pleased to share the results with CMMI when the research is complete.

  1. Medicare Advantage (MA) Innovation Models

NPC is supportive of further exploration of value-based insurance design (VBID) in Medicare Advantage. We recommend adhering to the following broad principles:

  • VBID may be used by competing private plans as an alternative to blunt utilization management tools, such as high formulary tier placement and high cost-sharing based solely on price rather than value;
  • VBID cost-sharing must be based on an appropriate assessment of value, not price;
  • Value assessments should be based on the full body of available evidence, based on a range of study designs;
  • Value must incorporate relevant clinical quality and patient-centered measures and account for changes in evidence, medical practice, and innovations;
  • VBID should not lead to cost-sharing increases for other covered items or services, or reductions in the number of medicines on a health plan’s formulary; and
  • VBID should not discourage enrollment of higher-cost beneficiaries.[17]

We further recommend adhering to the following principles for specialty medications:

  • Impose no more than modest cost-sharing on high-value medications;
  • Reduce cost-sharing in accordance with patient- or disease-specific characteristics that signal high value to the individual patient; and
  • Relieve patients of high cost-sharing after failure on a different medication.[18]

If risk adjustment is part of the demonstration, it is important to do so accurately so as to not create incentives for underuse of needed specialty medications. Not differentiating between specialty and small-molecule drugs can create significant incentive distortions.[19]


  1.  Conclusion

NPC appreciates this opportunity to provide input on CMMI’s new direction, and would be pleased to meet with you to expand upon our comments, share our research, and continue this important discussion.


Respectfully submitted,


Robert W. Dubois, MD, PhD
Chief Science Officer


[1] Centers for Medicare and Medicaid Innovation. (2017). Centers for Medicare and Medicaid Services: Innovation Center New Direction. Retrieved October 30, 2017, from:

[2] Partnership to Improve Patient Care. (2016). Advancing Patient Centered Approaches to Value-Based Care: A Roadmap to Increased Patient Engagement at CMMI. Retrieved November 13, 2017, from:

[3] Hollin, I. (2017, May) Value Assessment Debate: Pluralistic Approach or Does One Size Fit All? Presented at the ISPOR 22nd Annual International Meeting, Boston, MA.

[4] Addario, B., Fadich, A., Fox, J., et al. (2017) Patient Value: Perspectives from the Advocacy Community. Health Expectations, 00:1-7. Retrieved November 13, 2017, from:

[5] National Pharmaceutical Council. (2014, March 7). Comments on Medicare Program; Contract Year 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs. [CMS-4159-P][RIN 0938-AR37]. Retrieved November 17, 2017, from:

[6] Ciarametaro, M., & Dubois, R.W. (2016, April 20). Designing Successful Bundled Payment Initiatives. Health Affairs Blog. Retrieved October 30, 2017, from:

[7] McClellan, M., Penso, J., Westrich, K., et al. (2015). Solutions for Filling Gaps in Accountable Care Measure Sets. Am J Manag Care, 21(10):723-8.

[8] McClellan, M., Penso, J., Valuck. T., et al. (2017). Accountable Care Measures for High-Cost Specialty Care and Innovative Treatment [White paper]. Retrieved November 13, 2017, from the National Pharmaceutical Council:

[9] National Pharmaceutical Council. (2017). Improving Oncology Quality Measurement in Accountable Care [White paper]. Retrieved November 13, 2017, from:

[10] Dubois, R.W., Feldman, M., Martin, J., et al. (2012). Role of Pharmaceuticals in Value-Based Healthcare: A Framework for Success. Am J Manag Care, 18(7):e245/e247.

[11] Brummel, A., Lustig, A., Westrich, K., et al. (2014). Best Practices: Improving Patient Outcomes and Costs in an ACO Through Comprehensive Medication Therapy Management. J Manag Care Spec Pharm, 20(12):1152-1158.

[12] Schoenhaus, R., Lustig, A., Rivas, S., et al. (2016). Using an Electronic Medication Refill System to Improve Provider Productivity in an Accountable Care Setting. J Manag Care Spec Pharm, 22(3):204-208.

[13] Lustig. A., Ogden, M., Brenner, R.W., et al. (2016). The Central Role of Physician Leadership for Driving Change in Value-Based Care Environments. J Manag Care Spec Pharm, 22(10):1116-1122.

[14] Aron-Dine, A., Einav, L., Finkelstein, A. (2013). The RAND Health Insurance Experiment, Three Decades Later. The journal of economic perspectives : a journal of the American Economic Association, 27(1):197-222. doi:10.1257/jep.27.1.197.

[15] AMCP Partnership Forum: Advancing Value-Based Contracting. (2017). J Manag Care Spec Pharm, 23(11):1096-1102.

[16] Ciarametaro, M., Longosz, A.F., Gee-Tong, L., et al. (2017). Regulatory Barriers Impair Alignment of Biopharmaceutical Price and Value. Manuscript in preparation.

[17] Pharmaceutical Research and Manufacturers of America. (2015, September 15). Comments on Announcement of Medicare Advantage Value-Based Insurance Design Model Test. Retrieved November 15, 2017, from:

[18] Fendrick, A.M., Buxbaum, J., Westrich, K. (2014). Supporting Consumer Access to Specialty Medications through Value-Based Insurance Design [White paper]. Retrieved November 17, 2017, from:

[19] Buelt, L., Ciarametaro, M., Dubois, R.W. (2017, May). Will the Revised HHS Risk Adjustment Methodology Improve Accuracy in Predicting Costs for Diseases with Non-Uniform Patient Use of Specialty Therapeutics? Poster presented at ISPOR 22nd Annual International Meeting, Boston, MA.