CMS interest in comparative effectiveness will affect all payers

June 1, 2011

Comparative effectiveness research will take a more prominent role in payer policies as the Patient-Centered Outcomes Research Institute drives research efforts.

NATIONAL REPORTS-Comparative effectiveness research (CER) will take a more prominent role in payer policies as the Patient-Centered Outcomes Research Institute (PCORI) drives the research efforts. CER will be used by Medicare and managed care organizations (MCOs) for their clinical policies and programs, according to an Avalere Health audio conference.

"Medicare, just like private payers, has been increasing its use of evidence in a variety of ways to try to ensure better value for every dollar spent," says Steven D. Pearson, MD, president of the Institute for Clinical and Economic Review.

"The increase in funding for CER will provide more data, and specifically, more helpful head-to-head comparative data," Dr. Pearson says. "A dramatic shift in the way Medicare covers and pays for new drugs and other treatments seems unlikely in the short term, but over time all payers will expect better data comparing services head-to-head, for this kind of information is not only helpful in supporting policies such as tiered formularies; it is just as critical in helping doctors and patients make more effective, and therefore ultimately less costly, healthcare decisions."

Additionally, future funding of the PCORI will be largely from the Medicare Trust fund and contributions from health insurance and self-insured health plans. Given the size of the Medicare population, the impact of its decisions on all U.S. payers, and its role in funding future CER through PCORI, CMS's interest in CER will have a direct impact on patient and provider access and payment.

"The aforementioned federal investments provide a significant amount of CER new data sources and health technology assessments [HTAs] that can and are being used by the private sector to inform what products they cover and how they pay for them," according to Tanisha Carino, senior vice president at Avalere Health.

COMPARING HIGH-PROFILE DRUGS

CMS has demonstrated interest in evaluating the comparative effectiveness of expensive, high-profile drugs paid for in Medicare Part B through its national coverage determinations (NCDs) process. Examples include:

"In these NCDs, CMS utilized HTAs conducted by the Agency for Healthcare Research and Quality [AHRQ] and other comparative studies to inform its final decisions," Carino says. "CMS' increased interest in NCDs on drugs–such as Provenge–is expected to continue in the future."

The ARRA investments significantly increase CMS' data infrastructure to analyze comparative data, according to Carino. For example, one of the ARRA awards was for $10 million-plus to establish a Medicaid Analytic Extracts (MAX) data warehouse with 1999 to 2006 data and additional years as they become available. As part of this award, a data extraction system will be developed to deliver customized MAX data extract files to the research community for public use.

"This is significant because the MAX database will effectively build a robust repository of Medicaid and Children's Health Insurance Program [CHIP] data for CMS and the public to use when conducting CER on specific products of interest to the Medicaid and CHIP populations," Carino says.

In Avalere's analysis of all NCDs initiated as early as January 2007 and finalized as late as February 2011, it found that 55% of the NCDs considered CER, signaling that this type of evidence is considered by CMS in determining whether or not to cover a product or service.

Private sector entities, specifically payers, and public-private partnerships are similarly engaged in developing and advancing CER, according to Carino.