CMS Seeks to Cut Medicare Drug Payments

The Centers for Medicare & Medicaid Services (CMS) has announced a proposed rule to test new models to improve how Medicare Part B pays for prescription drugs and supports physicians and other clinicians in delivering higher quality care. CMS values public input and comments as part of the rulemaking process, and looks forward to continuing to work with stakeholders through the rulemaking process to maximize the value and learning from the proposed tests. Medicare Part B covers prescription drugs that are administered in a physician’s office or hospital outpatient department, such as cancer medications, injectables like antibiotics, or eye care treatments. The proposed Medicare Part B Model would test new ways to support physicians and other clinicians as they choose the drug that is right for their patients. The proposed rule is designed to test different physician and patient incentives to do two things: drive the prescribing of the most effective drugs, and test new payment approaches to reward positive patient outcomes. Among the approaches to be tested are the elimination of certain incentives that work against the selection of high-performing drugs, as well as the creation of positive incentives for the selection high performing drugs, including reducing or eliminating patient cost sharing to improve patients’ access and appropriate use of effective drugs. Prescription drug spending in the U.S. was about $457 billion in 2015, or 16.7 percent of overall health spending, according to a report also released today. In 2015, Medicare Part B spent $20 billion on outpatient drugs administered by physicians and hospital outpatient departments. The proposed rule will be open to a 60-day comment period. CMS is accepting comment on the proposed rule through May 9, 2016. The proposed rule is available for viewing at: https://www.federalregister.gov/public-inspection.