CMS seeks comments on potential new payment model for Part B drugs

The Centers for Medicare & Medicaid Services today issued an advance notice of proposed rulemaking seeking comments through Dec. 31 on potential options the agency may consider for testing changes to payment for certain separately payable Part B drugs and biologicals.
 
Specifically, CMS intends to test whether phasing down the Medicare payment amount for selected Part B drugs to more closely align with international prices; allowing private-sector vendors to negotiate prices for drugs, take title to drugs, bill Medicare for the drugs and compete for physician and hospital business; and changing the 4.3 percent (post-sequester) drug add-on payment in the model to reflect 6 percent of historical drug costs translated into a set payment amount, would lead to higher quality of care for beneficiaries and reduced expenditures to the Medicare program. Hospitals and physicians would continue to receive payment for drug administration plus a new "drug add-on" payment. CMS is considering issuing a proposed rule next spring on the potential model, called the International Pricing Index Model. The model would start in spring 2020 and operate for five years. Over the course of the model, CMS would monitor and evaluate the impact on beneficiary access to drugs, program costs, and the quality of care for beneficiaries. Participation in the IPI model would be mandatory for physician practices, hospital outpatient departments, and potentially other Part B providers and suppliers that furnish the model's included drugs in the selected geographic areas. For more information, see the CMS factsheet.
 
"America's hospitals and health systems are pleased that President Trump and his administration are focused on reining in out-of-control drug prices, which continue to threaten patient access and the ability of providers to deliver the highest quality of care," said AHA President and CEO Rick Pollack in a statement. "We look forward to reviewing the details of the model closely, including its impact on 340B hospitals and the patients they serve."
 
The Department of Health and Human Services also released a report today comparing the prices paid for physician-administered drugs in the U.S. to certain other countries.