CMS Proposes Tying Medicare Part B Drug Payments to Quality
By Jill Drachenberg, Managing Editor
CMS proposed a rule to test new Medicare Part B prescription drug payment methods. Part B prescription drugs include injectables and medications administered in outpatient care or doctor’s offices, including cancer treatments, antibiotics, and eye treatments.
According to CMS, the current Part B payment model pays physicians and outpatient departments the cost of the drug, plus a 6% add-on. This model could inadvertently give physicians an incentive to prescribe more expensive treatments to patients when cheaper drugs would work just as well or better. The proposed model would change the add-on to 2.5%, plus a flat fee of $16.80 per drug per day. CMS will update the flat fee at the beginning of each year based on the consumer price index for medical care for the most recent 12-month period.
In addition, CMS will test several different value-based pricing models, including the following:
- Discounting or eliminating cost sharing to improve patients’ access and appropriate use of drugs.
- Creating evidence-based clinical decision support tools for providers and suppliers focused on safe and appropriate use for selected drugs and indications.
- Indications-based pricing to vary the payment for a drug based on clinical effectiveness for different indications.
- Setting benchmark pricing for a group of therapeutically similar drugs.
- Risk-sharing agreements based on outcomes, which would allow CMS to enter into voluntary agreements with drug manufacturers to link patient outcomes with drug price adjustments, similar to ACOs.
CMS plans to test the model for five years, with the goal of testing the value-based purchasing models during the last three years. The comment period for the proposed rule is open through May 9.
As part of the Affordable Care Act, CMS is tying more of its reimbursements to quality through initiatives such as the Value-Based Purchasing Program. CMS recently reached its goal of tying 30% of Medicare payments to quality 10 months earlier than expected. For more information on quality reimbursement, see Value-Based Purchasing: The Ins and Outs of Medicare Payment Reform.