The two-part model would change the current statutory rate for provider payment and add value-based purchasing incentives. Various industry groups, physician and patient organizations, and members of Congress have expressed concern about potential risks to Medicare beneficiaries. Comments are due to CMS by May 9, 2016.
The two-part model would change the current statutory rate for provider payment and add value-based purchasing incentives. Various industry groups, physician and patient organizations, and members of Congress have expressed concern about potential risks to Medicare beneficiaries. Comments are due to CMS by May 9, 2016.
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On March 8, 2016, the Centers for Medicare & Medicaid Services (CMS) announced a Notice of Proposed Rulemaking to test a new model for the payment of physician-administered drugs covered under Medicare Part B, including drugs paid separately under the Outpatient Prospective Payment System. The first part of the two-part model (scheduled for implementation 60 days after publication of a Final Rule, which CMS expects to be later in 2016) would replace the current statutory rate based on Average Sales Price (ASP) of the drug or biological plus a 6 percent handling fee with a payment rate equal to ASP + 2.5 percent plus a flat fee of $16.80 across half of the United States. The second phase of the model (scheduled for implementation on or after January 2017) would add a variety of value-based purchasing incentives and adjustments to encourage different prescribing and utilization practices, also across half of the United States.
This demonstration, if finalized as proposed, will profoundly change the amount Medicare pays for drugs and biologicals covered under Part B of the Medicare program across three-quarters of the United States, and potentially will change prescribing patterns as well. The proposal demonstrates CMS’s willingness to use broad authorities granted by the Affordable Care Act to replace congressionally prescribed payment schemes and amounts with CMS’s own designs.
