Pushback on Part B drug payment proposal already beginning

Rheumatologists already are voicing concerns regarding a new proposal to test adjustments to how drugs administered in a physician’s office are paid for.

That proposal, published March 11 in the Federal Register, would test a change to the current reimbursement of average sales price plus 6% for Part B drugs with a lower add-on percentage of 2.5% plus $16.50.

In a fact sheet highlighting the proposals, the Centers for Medicare & Medicaid Services said the change to a lower percentage plus a flat fee “will cover the cost of any drug paid under Medicare Part B.”

However, there are already questions about that.

“While this may seem the way in which CMS will control costs, they fail to recognize the cost to facilities in obtaining approval for these treatments, receiving and storing, and ultimately safely administering these therapies in an environment that provides the best outcomes for patients,” Dr. Norman B. Gaylis, a rheumatologist in private practice in Aventura, Fla., said.

In fact, Dr. Gaylis adds that the focus on lowering drug expenses in the Part B space could have the unintended consequence of raising these expenses because it will force a change of venue.

“It has become so prohibitive that ultimately many patients will be referred to more expensive, less efficient outpatient facilities with, in fact, an increase in overall costs,” he said.

More than 300 provider and patient groups covering a range of specialties and including the American College of Rheumatology, the Coalition of State Rheumatology Organizations, and a number of state rheumatology organizations, are calling on Congress to ask CMS to withdraw the proposal.

In a March 17 letter to the majority and minority leaders in both chambers, the group is challenging the CMS assertion in the proposed rule that the current 6% add-on “may encourage the use of more expensive drugs because the 6% add-on generates more revenues for more expensive drugs.”

“This assumption fails to take into account the fact that providers’ prescribing decisions depend on a variety of factors, including clinical characteristics and the complex needs of the Medicare population,” the letter states. “Most importantly, there is no evidence indicating that the payment changes contemplated by the model will improve quality of care, and may adversely impact those patients that lose access to their most appropriate treatments.”

CMS offered two other pricing models that would be tested: indications-based pricing and reference pricing. The former would set payment rates based on the clinical effectiveness of a drug, while the latter would test the impact of setting a benchmark price for a group of drugs in a similar therapeutic class. Related to that is a proposal that CMS enter into voluntary risk-sharing agreements with drug manufacturers to link outcomes with price adjustments.

Dr. Gaylis suggested that CMS is going after the wrong party if cost containment is the ultimate goal here and should be focusing its efforts on the prices of the drugs themselves rather than how much they spend on physician reimbursement.

“Ironically, the major expense, i.e., the cost of drugs themselves, continues to spiral in the absence of any legitimate mechanism between CMS and pharma to contract prices that could save health care billions of dollars,” he said. “Ultimately, in my opinion, the solution rests in creating a fair and equal price for facilities administering these therapies and creating a pass-through where the drugs are not part of the physician’s risk, cost, or benefit and all payers, including CMS, can negotiate drug costs directly with the manufacturer.”

As part of the proposed rule, CMS also is considering creating feedback and decision-support tools to help, such as offering best practices for prescribing certain medications or providing feedback on prescribing patterns relative to local, regional, and national trends.

On the patient side, CMS is proposing to eliminate any patient cost sharing for office-administered drugs.

Comments on the proposals are due May 9.

[email protected]

Rheumatologists already are voicing concerns regarding a new proposal to test adjustments to how drugs administered in a physician’s office are paid for.

That proposal, published March 11 in the Federal Register, would test a change to the current reimbursement of average sales price plus 6% for Part B drugs with a lower add-on percentage of 2.5% plus $16.50.

In a fact sheet highlighting the proposals, the Centers for Medicare & Medicaid Services said the change to a lower percentage plus a flat fee “will cover the cost of any drug paid under Medicare Part B.”

However, there are already questions about that.

“While this may seem the way in which CMS will control costs, they fail to recognize the cost to facilities in obtaining approval for these treatments, receiving and storing, and ultimately safely administering these therapies in an environment that provides the best outcomes for patients,” Dr. Norman B. Gaylis, a rheumatologist in private practice in Aventura, Fla., said.

In fact, Dr. Gaylis adds that the focus on lowering drug expenses in the Part B space could have the unintended consequence of raising these expenses because it will force a change of venue.

“It has become so prohibitive that ultimately many patients will be referred to more expensive, less efficient outpatient facilities with, in fact, an increase in overall costs,” he said.

More than 300 provider and patient groups covering a range of specialties and including the American College of Rheumatology, the Coalition of State Rheumatology Organizations, and a number of state rheumatology organizations, are calling on Congress to ask CMS to withdraw the proposal.

In a March 17 letter to the majority and minority leaders in both chambers, the group is challenging the CMS assertion in the proposed rule that the current 6% add-on “may encourage the use of more expensive drugs because the 6% add-on generates more revenues for more expensive drugs.”

“This assumption fails to take into account the fact that providers’ prescribing decisions depend on a variety of factors, including clinical characteristics and the complex needs of the Medicare population,” the letter states. “Most importantly, there is no evidence indicating that the payment changes contemplated by the model will improve quality of care, and may adversely impact those patients that lose access to their most appropriate treatments.”

CMS offered two other pricing models that would be tested: indications-based pricing and reference pricing. The former would set payment rates based on the clinical effectiveness of a drug, while the latter would test the impact of setting a benchmark price for a group of drugs in a similar therapeutic class. Related to that is a proposal that CMS enter into voluntary risk-sharing agreements with drug manufacturers to link outcomes with price adjustments.

Dr. Gaylis suggested that CMS is going after the wrong party if cost containment is the ultimate goal here and should be focusing its efforts on the prices of the drugs themselves rather than how much they spend on physician reimbursement.

“Ironically, the major expense, i.e., the cost of drugs themselves, continues to spiral in the absence of any legitimate mechanism between CMS and pharma to contract prices that could save health care billions of dollars,” he said. “Ultimately, in my opinion, the solution rests in creating a fair and equal price for facilities administering these therapies and creating a pass-through where the drugs are not part of the physician’s risk, cost, or benefit and all payers, including CMS, can negotiate drug costs directly with the manufacturer.”

As part of the proposed rule, CMS also is considering creating feedback and decision-support tools to help, such as offering best practices for prescribing certain medications or providing feedback on prescribing patterns relative to local, regional, and national trends.

On the patient side, CMS is proposing to eliminate any patient cost sharing for office-administered drugs.

Comments on the proposals are due May 9.

[email protected]

Rheumatologists already are voicing concerns regarding a new proposal to test adjustments to how drugs administered in a physician’s office are paid for.

That proposal, published March 11 in the Federal Register, would test a change to the current reimbursement of average sales price plus 6% for Part B drugs with a lower add-on percentage of 2.5% plus $16.50.

In a fact sheet highlighting the proposals, the Centers for Medicare & Medicaid Services said the change to a lower percentage plus a flat fee “will cover the cost of any drug paid under Medicare Part B.”

However, there are already questions about that.

“While this may seem the way in which CMS will control costs, they fail to recognize the cost to facilities in obtaining approval for these treatments, receiving and storing, and ultimately safely administering these therapies in an environment that provides the best outcomes for patients,” Dr. Norman B. Gaylis, a rheumatologist in private practice in Aventura, Fla., said.

In fact, Dr. Gaylis adds that the focus on lowering drug expenses in the Part B space could have the unintended consequence of raising these expenses because it will force a change of venue.

“It has become so prohibitive that ultimately many patients will be referred to more expensive, less efficient outpatient facilities with, in fact, an increase in overall costs,” he said.

More than 300 provider and patient groups covering a range of specialties and including the American College of Rheumatology, the Coalition of State Rheumatology Organizations, and a number of state rheumatology organizations, are calling on Congress to ask CMS to withdraw the proposal.

In a March 17 letter to the majority and minority leaders in both chambers, the group is challenging the CMS assertion in the proposed rule that the current 6% add-on “may encourage the use of more expensive drugs because the 6% add-on generates more revenues for more expensive drugs.”

“This assumption fails to take into account the fact that providers’ prescribing decisions depend on a variety of factors, including clinical characteristics and the complex needs of the Medicare population,” the letter states. “Most importantly, there is no evidence indicating that the payment changes contemplated by the model will improve quality of care, and may adversely impact those patients that lose access to their most appropriate treatments.”

CMS offered two other pricing models that would be tested: indications-based pricing and reference pricing. The former would set payment rates based on the clinical effectiveness of a drug, while the latter would test the impact of setting a benchmark price for a group of drugs in a similar therapeutic class. Related to that is a proposal that CMS enter into voluntary risk-sharing agreements with drug manufacturers to link outcomes with price adjustments.

Dr. Gaylis suggested that CMS is going after the wrong party if cost containment is the ultimate goal here and should be focusing its efforts on the prices of the drugs themselves rather than how much they spend on physician reimbursement.

“Ironically, the major expense, i.e., the cost of drugs themselves, continues to spiral in the absence of any legitimate mechanism between CMS and pharma to contract prices that could save health care billions of dollars,” he said. “Ultimately, in my opinion, the solution rests in creating a fair and equal price for facilities administering these therapies and creating a pass-through where the drugs are not part of the physician’s risk, cost, or benefit and all payers, including CMS, can negotiate drug costs directly with the manufacturer.”

As part of the proposed rule, CMS also is considering creating feedback and decision-support tools to help, such as offering best practices for prescribing certain medications or providing feedback on prescribing patterns relative to local, regional, and national trends.

On the patient side, CMS is proposing to eliminate any patient cost sharing for office-administered drugs.

Comments on the proposals are due May 9.

[email protected]