The Center for Medicare & Medicaid Services recently proposed a new approach towards Medicare Part B payment, which aims to control how prescription drug cost determines the payment of physicians. This could also reduce the percentage of coinsurance payment that is currently up to 20%.
Under the current plan, payment for physician by Medicare Part B is 6% extra to the average sales price of the drug. The planned model could bring the charge to 2.5%, in addition to a flat $16.80 per drug per day fee initially. The fee will be adjusted annually in comparison with consumer price index of medical care.
Part B typically covers medications that are infused or injected at a clinic, and a few drugs obtained from pharmacy for oral use and inhalation. The new proposal by CMS will not cover preventive vaccines for influenza, Hepatitis B, and pneumococcal, as they are been paid using different method.
The Senate Finance Committee held a hearing on the proposal, where members highlighted that the proposed changes could limit access to drugs that doesn’t have any generic alternatives. However, CMS clarified that they would not take patient access too lightly. Acting Deputy Administrator for CMS, Dr. Patrick Conway, told the committee, “We would want any doctor to prescribe the medication that their patient need. We believe this proposal maintains access. ”
He assured that CMS is not allowed to limit benefits to enrollees of Medicare in any projects, because of the Affordable Care Act and Patient Protection regulations. Interestingly, AAFP supported the proposal, and stated that pharmaceutical companies should be liable for improving quality standards and reduce the costs.
“Physicians, hospitals and other Medicare providers are aggressively pursuing value-based payment models, and it only makes sense that we would explore the applicability of these same ideas to the pharmaceutical industry,” Wanda Filer, President of AAFP said in a press release.
Sen. Ron Wyden said, “So far prescription drugs have been left out of the equation of paying for value rather than volume.” This proposal will provide another incentive for physicians to prescribe medications with low cost with same clinical effectiveness as its costlier counterpart. A standard payment rate could be established for drugs with same therapeutic purposes.
The new proposal could be beneficial to physicians as it gave a financial advantage over the current method for prescribing low cost drugs. CMS has only put forth proposal for Medicare Part B, which showed a rising trend for from $9.4 billion to $22 billion on spending in 10 years. However, no initiatives have taken on Medicare Part D (prescription drugs), which tops the spending chart at $89.5 billion.