The Centers for Medicare and Medicaid Services has announced a proposed change to the payment structure for Medicare Part B drugs. The new plan is designed to “test how we can improve quality and value through the way Medicare Part B pays for prescription drugs," said Patrick Conway, M.D., CMS chief medical officer, in a conference call earlier this week.
Medicare Part B covers drugs administered in a physician’s office or outpatient clinic, such as infusions, eye care medicines, chemotherapy and vaccines.
Under the current payment structure for Medicare Part B drugs, CMS reimburses physicians the average sale price a drug plus a 6 percent add-on fee. This pricing model encourages physicians to use high-priced drugs even when lower-cost options are available, the agency claims.
Under the new pricing model, physicians would receive the average sale price of the drug plus a 2.5 percent add on fee and a flat payment of $16.80 per drug, per day. All Medicare part B providers would be required to participate in the trial, which is set to begin in January 2017.
Responses to the revised payment structure for Medicare Part B drugs were mixed. According to the Association of Community Cancer Centers, "On both policy and process, CMS missed the mark. The agency sought no stakeholder input and is providing little turnaround time before implementation of such a sweeping, misguided change in Medicare reimbursement."
These sentiments were echoed by Bruce Gould, M.D., president of the Community Oncology Alliance, a Washington D.C. based nonprofit that represents community oncologists throughout the United States. In a letter to acting CMS administrator Andy Slavitt and Health and Human Services Secretary Sylvia Burwell, Gould called the proposal “an inappropriate, dangerous, and perverse mandatory experiment on the cancer care of seniors who are covered by Medicare.”
The COA has also drafted a letter to Congressional leaders urging them to force CMS to withdraw the proposed change.
Not all reactions to the proposal were negative, however. Len Nichols, Ph.D., director of the Center for Health Policy Research and Ethics at George Mason University in Fairfax, Virginia, called the proposal “a good start,” in a statement to MedPage today. At the same time, he also acknowledged that the rule “presumes that there's a choice” [of medications],and in many of the most recent cancer [drugs], there is no choice.”
According to CMS, the proposed payment structure will apply to most Medicare part B drugs. The agency has not disclosed whether high-priced cancer medicines, which can cost an average of $10,000 to $30,000 per month, will be exempt. If they are not, community oncologists may be forced to stop caring for seniors with cancer, and send them to large centers which can purchase drugs at a lower cost instead.