Federal Out-of-Network Balance Billing Legislation: Context and Implications for Radiology Practices.

Out-of-network (OON) balance billing, commonly known as surprise billing but better described as a surprise gap in health insurance coverage, occurs when an individual with private health insurance (vs a public insurer such as Medicare) is administered unanticipated care from a physician who is not in their health plan's network. Such unexpected OON care may result in substantial out-of-pocket costs for patients. Although ending surprise billing is patient centric, patient protective, and noncontroversial, passing federal legislation was challenging given its ability to disrupt insurer-physician good-faith negotiations and thus impact in-network rates. Like past proposals, the recently passed No Surprises Act takes patients out of the middle of insurer-physician OON reimbursement disputes, limiting patients' expense to standard in-network cost-sharing amounts. The new law, based on arbitration, attempts to protect good-faith negotiations between physicians and insurance companies and encourages network contracting. Radiology practices, even those that are fully in network or that never practiced surprise billing, could nonetheless be affected. Ongoing rulemaking processes will have meaningful roles in determining how the law is made operational. Physician and stakeholder advocacy has been and will continue to be crucial to the ongoing evolution of this process. © RSNA, 2021.

Coordination of a fresh agricultural product supply chain with option contract under cost and loss disruptions.

This paper analyzes the option coordination problem of a fresh agricultural product supply chain under two supply chain structures, when the production cost and the loss rate are disrupted simultaneously. This paper provides the explicit option coordination conditions for the disrupted supply chain under two supply chain structures, and then explores the effects of the disruptions and supply chain structure on the option coordination conditions. The results suggest that it is unfavorable to apply the original coordinating contracts without disruptions to coordinate the disrupted supply chain. The coordination of the disrupted supply chain can be achieved with knowledge of the distribution of demand. In two coordinating contracts for the disrupted supply chain, the exercise price is still at the original level without disruptions while the option price deviates from the original level without disruptions. Moreover, the relationships of the coordination conditions in two supply chain structures depend on the value of the profit allocation coefficient. When the profit allocation coefficient exceeds (falls behind) a certain threshold, the option price is set at a higher (lower) value in the supplier-led supply chain structure than in the distributor-led supply chain structure, while the exercise price is set at a lower (higher) value in the supplier-led supply chain structure than in the distributor-led supply chain structure. Finally, the disrupted supply chain with any supply chain structure will perform better in the modified coordinating contracts than in the original coordinating contracts without disruptions.

Are You Ready to Negotiate Your First Employment Contract? Experience of More Than 700 Plastic Surgeons.

BACKGROUND: Plastic surgeons have been shown to be unprepared to negotiate their first employment contracts. Previous survey studies have attempted to assess plastic surgeons' first employment contracts to outline common pitfalls in contract negotiation. With this study, the authors aim to expand these previous studies and help plastic surgeons become prepared to negotiate their employment contracts. METHODS: A seven-question, cross-sectional survey was sent to attending-level surgeon members of the California Society of Plastic Surgeons, the American Society of Plastic Surgeons, the Texas Society of Plastic Surgeons, and the American Cleft Palate-Craniofacial Association. Questions investigated plastic surgeons' first contracts. Correlations were determined using a two-sample Wilcoxon rank sum test in an attempt to link these questions with overall satisfaction. RESULTS: From the 3908 distributed surveys, 782 (20 percent) responses were collected, and 744 were included for analysis. The majority of respondents were found to join a group-centered, private practice following residency. Surprisingly, 69 percent of surgeons did not use attorney assistance when negotiating their contract. Although greater than 70 percent of respondents reported a salary of $200,000 or less, satisfaction with one's contract was most strongly correlated with a salary of greater than $300,000 (p < 0.0001). However, only 12 percent of respondent surgeons were able to secure such a salary. CONCLUSIONS: This study examined the largest, most diverse plastic surgeon cohort to date regarding surgeons' first employment contract. Although the authors' findings indicate that certain factors should be prioritized when approaching a first employment contract, they ultimately recommend that all surgeons take into account their personal priorities and attempt to proactively define their terms of employment before signing a contract.

Evolving Outsourcing Landscape in Pharma R&D: Different Collaborative Models and Factors To Consider When Choosing a Contract Research Organization.

Outsourcing has become an integral part of how research and early development (R&D) is executed in biotech companies and large pharmaceutical organizations. Drug discovery organizations can choose from several operational models when partnering with a service provider, ranging from short-term, fee-for-service (FFS)-based arrangements to more strategic full-time-equivalent (FTE)-based collaborations and even risk-sharing relationships. Clients should consider a number of criteria when deciding which contract research organization (CRO) is best positioned to help meet their goals. Besides cost, other factors such as intellectual property protection, problem solving skills, value-creation ability, communication, data integrity, safety and personnel policies, ease of communication, geography, duration of engagement, scalability of capacity, and contractual details deserve proper consideration. In the end, the success of a drug discovery partnership will depend in large part on the people who execute the science.

Pharmaceutical Products and Their Value: Lessons Learned and the Path Ahead.

Steep increases in prices and spending on prescription drugs in the United States have triggered public outrage and questions over their value. Value-based pricing has emerged as a preferred alternative to prices determined by what the market will bear. In response, manufacturers and health plans have begun to publicize their efforts to engage in outcomes-based contracts and long-term financing agreements, which they describe as value-based. Nevertheless, both contracting approaches perpetuate existing distortions in the financial incentives of supply chain and prescribing intermediaries, and fail to realign the prices of drugs to their value to patients, the healthcare system, or society. This commentary describes the challenges of managing drugs according to their value, and describes several alternatives that promise greater impact than contracting strategies.

Using Data From Routine Care to Estimate the Effectiveness and Potential Limitations of Outcomes-Based Contracts for Diabetes Medications.

OBJECTIVES: Outcomes-based contracts tie rebates and discounts for expensive drugs to outcomes. The objective was to estimate the utility of outcomes-based contracts for diabetes medications using real-world data and to identify methodologic limitations of this approach. METHODS: A population-based cohort study of adults newly prescribed a medication for diabetes with a publicly announced outcomes-based contract (ie, exenatide microspheres ["exenatide"], dulaglutide, or sitagliptin) was conducted. The comparison group included patients receiving canagliflozin or glipizide. The primary outcome was announced in the outcomes-based contract: the percentage of adults with a follow-up hemoglobin A1C <8% up to 1 year later. Secondary outcomes included the percentage of patients diagnosed with hypoglycemia and the cost of a 1-month supply. RESULTS: Thousands of adults newly filled prescriptions for exenatide (n = 5079), dulaglutide (n = 6966), sitagliptin (n = 40 752), canagliflozin (n = 16 404), or glipizide (n = 59 985). The percentage of adults subsequently achieving a hemoglobin A1C below 8% ranged from 83% (dulaglutide, sitagliptin) to 71% (canagliflozin). The rate of hypoglycemia was 25 per 1000 person-years for exenatide, 37 per 1000 person-years for dulaglutide, 28 per 1000 person-years for sitagliptin, 18 per 1000 person-years for canagliflozin, and 34 per 1000 person-years for glipizide. The cash price for a 1-month supply was $847 for exenatide, $859 for dulaglutide, $550 for sitagliptin, $608 for canagliflozin, and $14 for glipizide. CONCLUSION: Outcomes-based pricing of diabetes medications has the potential to lower the cost of medications, but using outcomes such as hemoglobin A1C may not be clinically meaningful because similar changes in A1C can be achieved with generic medications at a far lower cost.

Are Value-Based Arrangements the Answer We've Been Waiting for?

In response to rising healthcare costs, value-based arrangements (VBAs) have emerged as a mechanism for transforming how we pay for high-cost therapies. As we think about how VBAs fit into the larger effort of the United States healthcare system to transition to value-based payment, it is important to consider the strengths and limitations associated with this model and to set appropriate expectations for what VBAs can realistically achieve. For example, for VBAs to meaningfully affect overall healthcare spending, there needs to be a sufficient number of products that meet the ideal criteria for a value-based contract. These products also need to represent a meaningful share of healthcare spending, and the VBA contracts need to be designed with enough financial risk to actually influence spending. Although there are limited data about the components of current contracts (eg, how much financial risk is involved, product and class specifications), VBAs will likely not be a singular solution for improving healthcare cost containment. Instead, VBAs offer an opportunity for the US healthcare system to achieve higher value for dollars spent when implemented in combination with other value-based payment mechanisms and policies that disincentivize low-value care.

Value-Based Pharmaceutical Contracts: Value for Whom?

Value-based pharmaceutical contracts (VBPCs) are performance-based reimbursement agreements between healthcare payers and pharmaceutical manufacturers in which the price, amount, or nature of reimbursement is tied to value-based outcomes. VBPCs are often complex, and the nature of who benefits and in what ways can be unclear. We discuss how VBPCs compare with value-based payer-provider arrangements in terms of performance-based reimbursements and alignment of incentives. In addition, we examine how VBPCs can affect costs, clinical outcomes, and access to medications. Because these contracts are unlikely to reduce costs in isolation, we recommend taking a patient-centered approach when developing VBPCs and tying VBPCs to more overarching payer drug cost reduction strategies.

"Stick or Twist?" Negotiating Price and Data in an Era of Conditional Approval.

BACKGROUND: Changes in the regulatory context enable faster approval of transformative medicines. They also lead to health technology assessment (HTA) agencies having to make decisions with less evidence. In response, HTA agencies have also initiated forms of conditional approval. When the evidence base for a new oncology treatment leaves substantial uncertainty, the new Cancer Drugs Fund allows the National Institute for Heath and Care Excellence to give the manufacturer two options: (1) offer a low price based on conservative assumptions and obtain immediate approval ("stick") or (2) wait until the evidence base has further matured before finalizing a potentially higher agreed price ("twist"). OBJECTIVES: The purpose of this article is to explain how, using the theoretical framework of the expected value of sample information, simulation methods can help inform a manufacturer's decisions when faced with the option to stick or twist. METHODS: We first summarize a general model to help frame the manufacturer's negotiating strategy. We then use a motivating case study, based on a hypothetical immunotherapy, to illustrate how manufacturers can use simulation methods to robustly characterize the uncertainty inherent to further data collection and incorporate this uncertainty within their decision making. RESULTS: Our approach allows us to estimate the commercial value of generating additional data (the difference between the estimated net present value of stick and twist). We test the sensitivity of the results to different assumptions via scenario analyses. CONCLUSIONS: This article shows that simulation methods can be used to help pharmaceutical managers make informed strategic decisions in contexts of uncertainty.

Financial Performance of Medicare Advantage Contracts in 2014 and Plan Renewal, Consolidation, and Termination Rates in the Subsequent Year.

BACKGROUND: Starting in 2014, the Affordable Care Act mandated that Medicare Advantage (MA) contracts spend at least 85% of total revenue on claims and quality improvement [ie, the medical loss ratio (MLR)] and submit revenue and cost data annually in MLR reports. These reports can improve transparency of the financial performance of MA contracts. However, little is known about revenues and costs of insurers that participate in MA and its impacts on status changes in the following year. OBJECTIVE: To characterize revenues and costs of MA contracts in 2014, with a focus on MLRs and gross margins, and to assess heterogeneity in subsequent-year plan renewal and termination rates by gross margins. RESEARCH DESIGN: Cross-sectional data from MLR reports submitted in 2014 by MA contracts and from 2015 Part C & D Plan Crosswalk Files regarding plan renewal, termination, and other status changes from 2014 to 2015. SUBJECTS: Three hundred eighty-nine MA contracts. MEASURES: Primary outcomes are MLRs and gross margins. RESULTS: MLRs averaged 93% in 2014; 11% of contracts reported MLRs of at least 100%. Fifty-six percent reported negative margins, or costs that exceeded revenues. Seventeen percent of plans in contracts in the lowest quartile of gross margins were terminated in 2015, compared to under 5% of plans in the highest-margin contracts. CONCLUSIONS: In 2014, MA contracts reported MLRs greater than the mandatory minimum of 85%. Gross margins likely contribute to trends in plan and insurer availability. MLR reports from subsequent years can help explain fluctuations in insurers' participation in MA.

International Commercial Surrogacy as a New Head of Tortious Damage: XX v Whittington Hospital NHS Trust [2018] EWCA Civ 2832.

In XX v Whittington Hospital NHS Trust [2018] EWCA Civ 2832, the Court of Appeal recognised commercial surrogacy in California as a permissible head of damage in a case of negligently inflicted infertility. Due to changing public policies and judicial opinion regarding the practice, and by incorporating the three-part test of illegality developed for civil claims by the Supreme Court in Patel v Mirza [2016] UKSC 42 into tort law, the Court of Appeal held that the principle of restorative justice required a departure from the precedent established in Briody v St Helens and Knowsley AHA [2001] EWCA Civ 1010.

Does managed competition constrain hospitals' contract prices? Evidence from the Netherlands.

In the Dutch health care system, health insurers negotiate with hospitals about the pricing of hospital products in a managed competition framework. In this paper, we study these contract prices that became for the first time publicly available in 2016. The data show substantive price variation between hospitals for the same products, and within a hospital for the same product across insurers. About 27% of the contract prices for a hospital product are at least 20% higher or lower than the average contract price in the market. For about half of the products, the highest and the lowest contract prices across hospitals differ by a factor of three or more. Moreover, hospital product prices do not follow a consistent ranking across hospitals, suggesting substantial cross-subsidization between hospital products. Potential explanations for the large and seemingly random price variation are: (i) different cost pricing methods used by hospitals, (ii) uncertainty due to frequent changes in the hospital payment system, (iii) price adjustments related to negotiated lumpsum payments and (iv) differences in hospital and insurer market power. Several policy options are discussed to reduce variation and increase transparency of hospital prices.

Joint recommendations for a total services account as a factor in simplifying contracts.

The objective of clinical trials is to transfer findings gained from basic research to patients and to result in innovative treatment approaches. Along with basic research, results from clinical trials thus represent a core area of medical advances. As a location for clinical trials, Germany is currently well-positioned and internationally competitive. This is evident in its position as No. 2 in Europe and No. 3 worldwide - behind the US and UK - in clinical trials of pharmaceuticals [1]. Maintaining and further improving this favorable positioning as a location for clinical trials is in the mutual interest of all parties involved in the field of clinical research, patients, trial sites and sponsors of clinical trials. For patients, clinical trials offer opportunities to gain early access to innovative therapy options. In addition to the scientific interest from medical faculties, clinical research is thereby an important aspect for university clinics in Germany as they fulfill their medical care mandate. Their involvement in clinical trials gives physicians the ability to gather experience with new treatment approaches at an early stage and to pass this know-how on to their patients. A location's clinical research is thus an important competitive factor in terms of international comparison as well. Industry likewise benefits from the favorable research infrastructure in Germany, which provides rapid patient recruitment and outstanding quality of results obtained and can thus contribute to the early approval of new drugs. From the perspective of the authors, it is therefore essential that Germany continues to remain competitive as a location for conducting clinical trials, precisely because the number of clinical trials is decreasing overall. Companies themselves are in international competition internally and externally, which often creates a certain pressure on trial preparation and thus on the start of a clinical trial. To ensure that a clinical trial can begin early, it is essential that contracts related to the trial are concluded quickly and simply, including remuneration for participants and full, transparent and comprehensible coverage of content for the business relationship. The swift agreement of key contractual and budgetary aspects is therefore in the interest of everyone involved. Against this backdrop, the German Association of Medical Faculties (MFT), the German Association of Academic Medical Centers (VUD), the Coordination Center for Clinical Studies (KKS-Netzwerk) and the German Association of Research-Based Pharmaceutical Companies (vfa) have held joint discussions regarding an important aspect of the contract negotiations - the cost consideration of clinical trials. As a result of these talks, these organizations have developed and published joint "Recommendations for the preparation of a total services calculation for remuneration related to the conduct of a clinical trial in a trial center" [2], [3]. The parties concerned share the conviction that, against the backdrops described, it would be helpful if the potential contract partners had access to recommendations that offer examples of constantly recurring cost positions in order to more precisely determine remuneration related to the conduct of a clinical trial. This article explains how the "Recommendations for the preparation of a total services calculation for remuneration related to the conduct of a clinical trial in a trial center" [2], [3] were developed and provides an overview of their content.

The Use of Risk-Sharing Contracts in Healthcare: Theoretical and Empirical Assessments.

OBJECTIVE: The aim of this review is to provide a summary of the literature on risk-sharing agreements, including conceptual, theoretical and empirical (number of agreements and their achievements) perspectives, and stakeholders'  perceptions. METHODS: We conducted a systematic literature search in MEDLINE from 2000 to April 2019, following PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) methodology, and completed it with a manual search of other publications (mainly grey literature). The search was restricted to publications with English abstracts; the initial identification of articles was restricted to the title, abstract and key words fields. The geographical scope was not restricted. RESULTS: Over 20 studies proposed different taxonomies of risk-sharing contracts, which can be summarised as financial and paying-for-performance agreements. Theoretical studies modelling the incentives to implement risk-sharing agreements are scarce; they addressed different types of contracts and regulatory contexts, characterizing the drug prices and the optimal strategies of the involved agents. Empirical studies describing specific agreements are abundant and referred to different geographical contexts; however, few articles showed the economic results and assessed the value of such contracts. Stakeholders' perceptions of risk-sharing contracting were favourable, but little is known about the economic and clinical advantages of specific agreements. Whether risk-sharing contracts have yielded the desired results for healthcare systems remains uncertain. CONCLUSION: Risk-sharing contracts are increasingly used, although the lack of transparency and aggregated registries makes it difficult to learn from these experiences and assess their impact on healthcare systems.

The procurement of innovation by the U.S. government.

The U.S. government invests more than $50 billion per year in R&D procurement but we know little about the outcomes of these investments. We have traced all the patents arising from government funding since the year 2000. About 1.5 percent of all R&D procurement contracts have led to at least one patent for a total of about 13,000 patents. However, contracts connected to patents account for 36 per cent of overall contract value. The gestation lag from the signing date of the contract to the patent filing is on average 33 months and does not depend on the type of R&D performed. Patents that are produced faster also seem to be more valuable. We find strong decreasing returns to contract size. Conditional on generating at least one patent, a 1-percent increase in the size of an R&D contract is associated with 0.12 percent more patents.