Even before top Medicare officials announced Tuesday that they planned to test new payment models for Part B drugs, some doctors were already registering their protests.
After a portion of the proposal leaked in early February, one group said the experiment slated for late this year “will jeopardize the health of millions of Medicare patients with cancer.” Another called the proposal “misguided and ill-considered.”
Patrick Conway, chief medical officer for the Centers for Medicare and Medicaid Services, assured everyone this week that “nothing in this proposed payment model will prevent doctors from prescribing exactly the treatment they think patients need.”
The goal, he said, is implementing a payment model that promotes “smart spending” while achieving the same or better patient outcomes.
But the proposal — and the immediate pushback by some physicians — underscores growing tensions in how to address the high and growing cost of drugs while providing the best possible care.
Medicare Part B drugs, unlike those covered under Medicare Part D, are drugs administered in a physician’s office or hospital outpatient setting, such as injectable medications, or treatments for some cancer or respiratory conditions. Under the current policy, providers are paid 6 percent of the drug’s average sales price plus 6 percent.
The CMS proposal would change the payment to 2.5 percent of the sales price and a flat $16.80 payment, with the goal to lessen the incentive to order more expensive drugs that bring higher reimbursement instead of cheaper drugs that are just as effective.
Because Part B requires beneficiaries to pay 20 percent of the drug’s cost, CMS believes the new models would also ease the financial burden on patients. An open comment period on the proposed experiment continues through May 9.
Even those who don’t necessarily oppose the plan outright wonder if the initiative will be the answer.
“The question is, what is the goal of the program? Why is Medicare doing this?” asked oncologist Peter Ellis, deputy director for clinical services at UPMC CancerCenter.
The driver seems to be a desire to cut costs, Dr. Ellis said, but he believes the savings achieved by lowering the reimbursement to 2.5 percent of the drug’s average cost would be insignificant in most cases — a $35 difference on a $1,000 drug, for example.
“Is it really worth the squeeze for what they’ll get?”
His concern is that the change could limit access for patients, particularly in rural areas if independent physicians who are not backed by a major health system such as UPMC have to pay more for a drug than the reimbursement payment covers.
“If all of a sudden I’m losing money on my drugs, I can’t stay in business.”
Oncologist Marilyn Heine, a statewide leader on cancer care policy, is an independent cancer physician in Bucks County. While the proposal affects all providers, independent physicians already deal with narrow operating margins and she fears some practices may have to close or join a larger health system if they get stretched any further.
The Medicare proposal, she said, will “make an already very challenging situation even more difficult.”
Because word had already spread on what Medicare had in mind, opposition was already in place by Tuesday’s release of the full proposal. The criticism was fueled in part by a belief that the idea has been launched without sufficient input from physicians.
“This is going out without sufficient stakeholder input,” said Dr. Heine. “We felt it is not prudent to do a cost-cutting approach on the backs of independent physicians.”
Steve Twedt: firstname.lastname@example.org or 412-263-1963.