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Opponents of CMS Medicare Part B proposal call plan 'perverse' and 'dangerous'

Move by CMS would only push cancer care delivery into the more expensive hospital setting, groups say.

Susan Morse, Associate Editor

Hubert H. Humphrey Building, Department HeadquartersHubert H. Humphrey Building, Department Headquarters

Physician and pharmaceutical groups have come out swinging against the Centers for Medicare and Medicaid Services' proposal to reduce the reimbursement price for Medicare Part B prescription drugs.

In a letter to Health and Human Services and CMS, Bruce Gould, MD, president of the Community Oncology Alliance, called the Medicare Part B drug payment model an inappropriate, dangerous and perverse mandatory experiment.

For years, the president's annual budget has contained a cut to Part B drug reimbursement, but Congress has always wisely rejected that as misguided, Gould wrote.

"The CMS Medicare Part B Drug Payment Model has nothing to do with outcomes or quality," Gould said. "It is simply a vehicle to circumvent Congress and its legislative action on Medicare Part B drug reimbursement – the Medicare Modernization Act (MMA) – that has defined Part B drug reimbursement as average sales price (ASP) plus 6 percent."

[Also: CMS tests new model to lower cost of prescription drugs]

On Tuesday, CMS proposed the testing of a new model, recommended by the Medicare Payment Advisory Commission, to lower the 6 percent add-on payment to 2.5 percent and include a flat fee of $16.80 per drug per day.

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.

Gould said the move by CMS would only push cancer care delivery into the more expensive hospital setting.

"Factoring in the impact of prompt pay discounts and Medicare sequester cut, this would effectively result in drug reimbursement below ASP (average sales price)," Gould said.

Also, he said, CMS's proposal is based on an insulting assumption that community oncologists practice medicine solely by financial incentives, not by what is in the best interests of their patients.

"This is not only highly offensive and derogatory, but also simply not grounded in fact," Gould said.

[Also: CMS hits Humana with $3.1 million penalty for Medicare Advantage, drug plan violations]

American Society of Clinical Oncology CEO Allen S. Lichter, MD, said the CMS plan would modify drug reimbursement based on zip codes.

"The ASCO believes that it is inappropriate for CMS to manipulate choice of treatment for cancer patients using heavy-handed reimbursement techniques," Lichter said.

The ASCO has long advocated for comprehensive payment reform, Lichter said.

"Physicians did not create the problem of drug pricing and its solution should not be on their backs," he said.

The American Society of Clinical Oncology has joined other organizations from across the provider and patient advocate communities in signing on to two separate letters urging CMS to reconsider this proposal.

One letter--on behalf of more than 60 signatories from the oncology community--was sent to Andy Slavitt, acting administrator at CMS. The other letter --sent on behalf of nearly 100 signatories from the healthcare provider and patient advocate communities--was sent to Sylvia Mathews Burwell, Secretary, U.S. Department of Health and Human Services, Lichter said.

[Also: CMS finalizes 2017 health insurance marketplace improvements]

The Pharmaceutical Research and Manufacturers of America (PhRMA) spokesman Allyson Funk said the current Medicare Part B drug payment methodology is working as an effective, market-based pricing mechanism to control costs.

"Part B medicines represent a small and stable share of overall Part B spending and price growth for Part B drugs is below overall medical inflation," Funk said.

The American Medical Association did not issue a statement by press time.

The American Hospital Association said it was reviewing the rule and looked forward to getting additional information on this test program.

Health and Human Services on Tuesday said expenditures on prescription drugs are rising and are projected to continue to rise faster than overall health spending. Prescription drug spending in the United States was about $457 billion in 2015, or 16.7 percent of overall personal health care services, according to HHS.

Drug spending rose sharply in 2014, with an estimated 12.6 percent increase, after years of unusually slow growth, HHS said. The spike is largely due to higher-priced specialty medications and the fact that millions of people have gained insurance coverage through the Affordable Care Act, HHS said.

Twitter: @SusanJMorse

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