Medicare Considers Changing Payment Rules for Part B Drugs

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ACP suggests wide reform of drug pricing issues to ensure patient access and avoid physician burdens

Jan. 25, 2019 (ACP) – As the Trump administration moves to reform how Medicare pays for prescription drugs that are administered in doctors' offices and hospitals, the American College of Physicians is urging federal officials to make sure any changes will protect physicians from extra burdens, support safety and access and embrace the opportunity to go bold.

“While the high cost of prescription drugs is a significant issue facing the American public, price should not be used as the sole criterion for choosing health care goods or services, including prescription drugs,” wrote ACP's president, Dr. Ana Maria López, in a recent letter to the U.S. secretary of health and human services.

At issue is the way that the Centers for Medicare and Medicaid Services pays for prescription drugs covered by Medicare Part B. These drugs are distinct from those classified under the more widely known Medicare Part D, which covers prescription drugs that are self-administered.

In general, Part B drugs – there are about 600 of them – are administered in a physician's office or in a hospital outpatient setting, mainly by the physician. They include flu shots, infusion drugs and some oncology drugs, among many others.

The Trump administration has said it plans to release rules that will link the prices of Part B drugs in the United States to those in other nations as calculated in the International Pricing Index.

“We appreciate the commitment by the administration to drive down the cost of prescription drug for payers and patients,” said Hilary Daniel, an ACP health policy associate. However, she said, ACP believes that federal officials must also make sure to take these actions:

  • Protect physicians from extra burdens

“ACP is concerned about the potential for added administrative burden on physicians by introducing additional intermediaries into the procurement, billing, and payment policies for Part B drugs,” López wrote in ACP's letter. “ACP strongly advises CMS to consider how to reduce any potential administrative burden as part of a proposed rule and clearly communicate those program elements to participating providers.”

  • Provide proper reimbursement to physicians

“There should be appropriate levels of reimbursement to account for administration of drugs and investments in care delivery infrastructure,” López wrote. “CMS should consider and make efforts to mitigate any potential negative impacts changes in payments for Part B drugs may have for a number of different practice types, including small independent practices or rural practices.”

  • Avoid mistakes of the past

ACP is concerned about a proposed reboot of the Competitive Acquisition Program (CAP).

“The CAP was initially passed as part of the Medicare Modernization Act of 2003 that allowed physicians, starting in 2006, the option to buy and bill Part B drugs under the regular ASP +6% system or obtaining the drugs through vendors selected in a competitive bidding process,” Daniel explained. “The CAP was generally unsuccessful, with low physician enrollment and only one vendor participating in the program. However, Sec. Azar feels like the market is in a much better place to support this type of program compared to the last attempt.”

  • Take advantage of the opportunity for wider reform

ACP believes the administration can go further. As Daniel explained, “we feel that there are issues rooted in domestic policies—such as how some pharmaceutical manufacturers take advantage of the regulatory and patent systems to delay generic drug entry, pricing transparency and direct negotiation by the government for the price of drugs in the Medicare Part D program—that impact the pricing of drugs and need to be addressed as well.”

“The complexity of the prescription drug pricing and reimbursement system means that there is no singular action that will fix everything,” she added. “We need a variety of policies in place to keep companies from arbitrarily increasing prices.”

At first it seemed that federal officials would release proposed rules about Part B reform in late spring, with an eye toward finalizing them by late 2019 or early 2020, Daniel said, but the timeline has become less clear amid a backlash to the administration's announcement of the changes that it's considering.

“At this time we are not aware of a concrete timeline,” she said. “But we will be keeping an ear to the ground on when a proposed rule might be released and continue to monitor the situation to make sure our concerns are heard.”

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Back to the January 25, 2019 issue of ACP Advocate