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Congressional Subcommittee Debates Medicare Part B Demonstration Project
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The U.S. House Energy Subcommittee on Health held a hearing to offer physician and patient perspectives on planned changes to the Medicare Part B drug reimbursement model.
The proposed changes — put forth by CMS — would affect the ways in which physicians are reimbursed for the drugs they prescribe to patients covered by Medicare. Currently, Medicare reimburses the average sales price of the drug, plus an additional 6% of the cost.
Under the new regulations, physicians would be reimbursed the average sales price plus 2.5%, with an additional flat fee of $16.80 per drug per day.
The proposed changes are to be studied in a two-pronged fashion, with testing set to begin later this year. Medical practices will be randomly assigned to adopt the changes based on zip code.
“This proposal represents the biggest change to Medicare drug reimbursement in years, and there are several aspects that are concerning to many,” Committee Chairman Joseph R. Pitts, (R-Pa.), said during the hearing. “The most concerning aspect of this proposal is that it came from unelected bureaucrats who made decisions behind closed doors, affecting our seniors and their health care. These concerns over provider reimbursement [are] so considerable that 242 bipartisan members of Congress wrote to the administration and asked that it be withdrawn.”
Several medical societies — including the American College of Rheumatology (ACR), American Society of Clinical Oncology (ASCO), American Society of Hematology, and American College of Surgeons — have issued statements urging CMS to withdraw these proposed changes to drug reimbursements.
In a letter from the ACR to CMS prior to the hearing, ACR officials urged CMS to withdraw or significantly modify the proposal, citing a devastating impact to providers and patients who rely on Medicare Part B to access biologic therapies.
“Many rheumatologists have already been forced to stop administering biologic therapies to Medicare patients because the current Part B payment structure does not cover the costs of obtaining and providing these complex therapies in the outpatient setting,” according to an ACR press release on the letter. “Additional cuts will force rheumatologists to send patients elsewhere to get the same drugs, often at increased cost and burden to the patient.”
ACR officials further explained that patients will face more expensive copays and facility fees, longer travel, administration of therapies absent the supervision of their rheumatologist, and increased risk of death from infusion reactions under the new proposed payment test. The ACR also criticized CMS’ approach to the proposal, saying it would not achieve the intended effect of lowering Medicare costs for rheumatology care long term.
“The underlying proposal relies on reducing Part B drug pricing by encouraging physicians to prescribe lower cost products, but less expensive alternatives do not exist for Part B for rheumatology patients,” according to the release.
Clinicians’ Concerns
Although several members of the committee made clear that they did not hold blanket oppositions to demonstration programs, they asserted the changes put forth by CMS extended too far.
“The health and well-being of seniors is nothing to be experimented with,” Pitts said. “This rule could result in grave consequences for our seniors.”
Other committee members worried the new model would hold negative consequences for smaller and rural medical practices.
“I have 19 counties in my district, and some of the more rural counties are concerned about this,” Rep. Marsha Blackburn, (R-Tenn.), said during the hearing. “The providers [fear] that this might be the type of component that pushes them to the brink, and out of the business.”
Blackburn suggested the planned implementation was designed to mirror a clinical trial, but without the requisite safeguards required by medical research.
“I understand that clinical trials are important,” Blackburn said. “In my district, we have a lot of physicians and researchers who participate in them. I have visited with some of them, and they are concerned about the way this is moving.”
Debra Patt, MD, MPH, MBA, vice president of Texas Oncology in Austin, medical director of The U.S. Oncology Network, and chair of ASCO’s Clinical Practice Committee, agreed, calling the changes an “unworkable experiment.”
“CMS has proposed an experiment that randomizes physicians by zip code into test and control groups,” Patt said during her testimony. “In my world, this is clinical research. Unlike the CMS experiment, however, patients have to volunteer their participation in a clinical trial. There is no opting out of this mandatory national experiment. There is no opting out for patients, no monitoring for adverse events and no ability to evaluate impact on quality and outcomes — the central requirements of any ethical research.”
The idea that changes to the reimbursement model would lower overall costs is flawed, according to Patt.
“I would like to focus on how few opportunities there are to select therapeutic alternatives on drug price,” Patt said. “Ten years ago, we knew that patients with breast cancer that was metastatic to the brain lived an average of a few weeks. One of my patients had the option of a different treatment, and was given a novel and targeted therapy that we knew would change her course dramatically. She continues to receive targeted treatments today and continues to live a good life. These targeted treatments are expensive, but the alternatives would lead to an early death. Premature death is not a treatment alternative.”
Michael C. Schweitz, MD, FACP, MACR, national advocacy chair for the Coalition of State Rheumatology Organizations and a Healio Rheumatology Peer Perspective Board member, agreed that clinical decision-making is not influenced by cost.
“I take issue with the underlying premise of the rule, which is that clinical decision-making is driven by the opportunity to maximize revenue,” Schweitz said. “Data supporting this premise are nonexistent. In fact, a recent report looked at utilization of rheumatoid arthritis medications and found that physicians are not routinely prescribing the most expensive product. In 2014, the most expensive product was one of the least prescribed.”
Schweitz continued, “The current 6% add-on already results in practices without volume purchasing power being underwater on several products. A reduction from 6% to 2.5%, plus a nominal flat fee, will result in unsustainable cuts, especially since CMS did not incorporate the impact of sequestration in its calculations. [Rheumatology] is a specialty of small practices. In my state of Florida, there are only a few practices with seven or more doctors. Practices of one or two rheumatologists do not have the purchasing power to buy at average sales price.”
Voices in Favor
Several committee members and witnesses voiced support for the proposed changes, which they hoped would alleviate the ever-growing cost of medication in the United States.
“I strongly believe that lowering drug prices is imperative to the sustainability of our health care system, and especially to our public insurance programs like Medicare,” Rep. Janice Schakowsky (D-Ill.) said during the hearing. “I support the CMS proposal, and luckily I am not alone. Many organizations that represent beneficiaries — including AARP, Aetna, the AFL-CIO, the Alliance for Retired Americans, AFSCME, the American Federation of Teachers, the Center for American Progress, the Center for Medicare Advocacy, Doctors for America, Kaiser Permanente, the Medicare Rights Center and the National Education Association, among others — support this proposal.”
The changes to the model will not change how medication is prescribed, according to Joe Baker, president of the Medicare Rights Center, which supports the changes.
“The model seeks to realign perverse payment incentives while ensuring that doctors can continue to prescribe the medication best suited to the individual needs of patients,” Baker said during his testimony. “The model brings innovative, value-based strategies being explored in private markets to the Medicare program.”
These changes may positively affect Medicare beneficiaries who lack supplemental insurance coverage.
“Estimates suggest that between 10% and 14% of recipients only have original Medicare,” Baker said. “These beneficiaries are exposed to catastrophic costs, which can reach as high as over $100,000. Calls to withdraw the Part B payment model fail to acknowledge the real and unrelenting beneficiary access challenges that exist under the current payment model, not merely hypothetical ones.” – by Cameron Kelsall
Disclosure: Schweitz reports he is a consultant to Genentech for legislative issues. Healio Rheumatology could not confirm the other speakers’ relevant financial disclosures.
Perspective
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John R.P. Tesser, MD
The report on the proposed changes, as many before it, fails to clearly state a likely consequence for many Medicare patients if this demonstration project becomes reality. Patients who are on or may need a particular biologic and for which there is no biosimilar alternative may lose access. Most rheumatology practices are small and cannot obtain bulk pricing, so they will not be able to financially survive under this new rubric. Patients will likely be referred to more expensive hospitals or infusion centers. Some of these centers may not be able to be financially sustained either.
Maybe Medicare patients will be shifted to a subcutaneous form of the biologic, if there is one. However, many patients, if not most, cannot afford the copay portion that Medicare does not cover, if the patient has Part D drug coverage. The administrators of Medicare will not allow these patients to receive any financial assistance through pharmaceutical copay programs that commercial patients have available. Patients already doing well on medication may have to come off it, and patients who need a new mechanism of action may be denied access.
Yes, Medicare will pay less for medicines. However, patients health outcomes may suffer an issue the new pricing model clearly does not measure.
Reference:
Schrag D. N Engl J Med. 2016;doi:10.1056/NETMP1603735.
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