CMS and Blended Reimbursement Codes

Amanda Forys, MSPH: What I find interesting about the biosimilars market is, you’ve got this whole concept of what products are placed in formulary. Then, on the actual use of the products and billing and claims processing, you have a whole other issue, which I’d like to talk about next. In addition to concerns around how private payers are going to put these products on formulary, you also have a lot of concerns with the actual billing and coding policy for biosimilars.

As all of you are aware, CMS (Centers for Medicare & Medicaid Services) has finalized its policy that says that all biosimilars to a reference product will be grouped into their own billing code, and that will be separate from the reference product. In addition, for the biosimilar, when you, as a provider, bill for a service, you will put the code for the biosimilar. Then, you have to add a 2-digit modifier that specifies the manufacturer of the product. It’s a random modifier code. This is a totally different policy than anyone has ever seen before with the billing guidelines from CMS, and the use the of the modifier for an actual manufacturer is unprecedented.

Above and beyond what you’re looking at with formulary placement, how could actual implementation of a coding and payment policy affect provider willingness to use these products—if there are any concerns around claims processing and timely payments and, ultimately, the uptake in the development of these products?

Angus Worthing, MD, FACR, FACP: The American College of Rheumatology would actually like this specific policy to be changed, and we’ve said that to CMS in our comments. When a provider or group or hospital has a patient that they’re taking care of and wants to provide a specific drug, it’s pretty important for the doctor, for example, to be able to provide that drug to the patient on an individual basis. One theoretical biosimilar in a family costs more for that doctor or hospital to purchase, compared with another biosimilar in that reference product family. But, if it’s the right drug for that patient, there’s pressure because of the system for that provider or group not to provide that drug. Financially, it might not be viable. It might lose money, and you might have to switch that patient to a different site of service—perhaps make them drive farther to get a hospital-based infusion or switch to the cheaper drug. That system should switch to having each drug be reimbursed on its own merits, based on its own cost. Additionally, it’s important for a drug to have its own code. A lot of doctors and systems track which drugs people receive based on that code. And so, having an individualized code would be very helpful for pharmacovigilance and for tracking what people are taking.

Amanda Forys, MSPH: Do you think the modifier code meets that, or do you think that adds more of an administrative burden versus “Here’s the separate code”?

Angus Worthing, MD, FACR, FACP: I’ll believe it when I see it, but it might mean that doctors would have to get to know, like you said, a very new system. They would have to track what modifier matches what drug. Again, we’ll sort of see if that system works.

Molly Burich, MS: Yes, I think this raises great points from the physician perspective. I will say that from a manufacturer’s perspective, there are equally as many concerns around this blended policy. Part of the concern is that during the approval process, the FDA is reviewing each biosimilar relative to the reference product, not to one another. In other words, biosimilar A is not compared with biosimilar B. We think that putting all products on the same code kind of assumes that they are the same. Again, we’re 7 products in. We just saw the approval of the first therapeutic oncology agent, not yet marketed. It’s very early—in this market—to implement a policy that sort of equates all these products together. One thing we know about biologics is that they are different and patients react differently. That’s just the nature of the being. So, we feel like the policy is challenging in that way. It’s sort of assuming they’re all equal, and we don’t know that to be true. That’s never been proven from the regulatory agency standpoint.

The other piece is that by only putting biosimilars together in the same code, you’re half generating a competition that, I think, the agency wants to see. Fundamentally, CMS is in a bit of an unenviable position of trying to lower drug costs and trying to do things that are in their purview. That’s probably why they developed this policy, but we feel that true competition is across all products, including the innovator, too. Right now, the innovator is in its own code. And that potentially, to Angus’s point, gives more stability, from a reimbursement standpoint. Therefore, a physician may be more comfortable continuing to bill that reference product. They know the reimbursement is stable. They’ve been doing it. They don’t have to add this modifier, which is a change in process. All these things together could potentially inhibit biosimilar utilization.

Similar to what we talked about earlier, what we need to be doing now is developing policies and having a reimbursement framework that supports biosimilars and a sustainable biosimilar market. If we don’t have that, I think patients could ultimately lose out on lowering the cost of drugs and paving the way for innovation. So, we have to make sure that any policy’s coding and billing support a long-term, sustainable biosimilar market.