The American Medical Association has joined a growing list of organizations that are opposed to the CMS' proposal for a new Medicare Part B drug reimbursement program.
The new pilot program would offer 2.5% on top of the average sales price of drugs administered by infusion or injection in an outpatient setting, plus a flat payment of $16.80 per drug per day. The goal is to eliminate indirect incentives to prescribe expensive drugs under the current system of a simple 6% add-on payment.
The AMA House of Delegates approved a resolution Wednesday asking the CMS to withdraw this proposal and vows to advance congressional action to block the proposal in the event that doesn't happen. Leaders of a number of provider organizations, including the Medical Group Management Association and the Community Cancer Alliance, argue that smaller specialty practices in particular could be hard hit by such a lower payment.
In May, AMA CEO Dr. James Madara wrote a letter to acting CMS Administrator Andy Slavitt arguing that the proposal will make life more difficult for high acuity-patients and small physician practices, especially those in rural, remote areas. He also pointed out that it won't reduce the high cost of Part B drugs and doesn't attack the core issue of why those drugs are expensive in the first place.
"We are concerned that the cuts proposed ... could undermine Medicare beneficiaries' access to care from their established physician in their local community and move their treatment to higher cost delivery sites depending on where they live,” Madara wrote.
In March, Ted Okon of the Community Cancer Alliance called the program “contrived” and “absurd,” while MGMA CEO Halee Fischer-Wright told Modern Healthcare last week that the pilot would “kill” the nation's smaller practices, which have lower patient volumes that won't offer enough reimbursement to cover both the drugs and the care delivery costs.
Academics similarly are concerned about the new proposal. Dr. Mark Fendrick, director of the University of Michigan's Center for Value-Based Insurance Design, wrote in a May letter that the proposal is an improvement, but doesn't base reimbursement decisions on the clinical value of the drug to the patient and will delay quality-driven changes to pharmaceutical pricing.
“Clearly, a different payment methodology for appropriate care is necessary to create a systemic switch from 'volume to value,' ” Fendrick writes, adding that low-cost drugs are not always the most valuable option for an individual patient.
The CMS is continuing to use a one-size-fits-all approach for drugs that treat often-complex conditions, said Dr. Jonas de Souza, an assistant professor and practicing oncologist at University of Chicago Medicine who has studied value-based insurance design. The agency needs to consider adjusting reimbursement and patient cost-sharing when a drug is more or less conducive to positive outcomes for a patient, he said in an interview Wednesday.
“In theory (the CMS is) trying to cut these incentives, but there are lot of unintended consequences that they have not fully explored,” de Souza said. “They're just focusing on the cost of drugs when for the past few years we're all talking about value.”
The Medicare Payment Advisory Commission argues the existing 6% add-on may be too high and says many outpatient drugs are sold at 102% of the average sales price. "This finding suggests that there may be room for a reduction to the add-on portion of the payment rates for Part B drugs, which could create savings for the Medicare program," MedPAC wrote.
But MedPAC, like the AMA, stressed that drug prices need to be addressed directly. The commission suggested a number of ways this could be done, including raising the percent-based payment over time to help avoid significant price increases, consolidating billing codes for similar Part B drugs—biosimilars in particular—to spur price competition, or reinstating a Medicare-administered program to facilitate Part B drug orders.
"If policymakers wish to influence Part B drug payments to a larger degree than is possible through add-on payments, they could consider Medicare payment policies that create more price competition among drugs or that put downward pressure on" average sales price, MedPAC wrote.