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October 5, 2017

CMS withdraws proposal to overhaul Medicare Part B drug payment

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CMS on Tuesday formally withdrew a proposal that would have changed the way CMS pays for drugs under Medicare Part B.

Join the webconference: Help patients navigate rising prescription drug costs


Medicare payments for prescription drugs covered under Medicare Part B, which include those administered in physician offices or hospital outpatient departments, currently are based on the drugs' average sales prices plus 6 percent to cover the costs of handling and administration.

CMS in March 2016 unveiled a proposed rule to test new payment models under Medicare Part B. Under the new payment methods, CMS would have: 

  • Cut the 6 percent add-on for current Part B drug payments to 2.5 percent and then paid a flat fee per drug on top of that percentage;
  • Linked payments to how well treatments work;
  • Linked payments to a drug's effectiveness for different uses;
  • Provided feedback to physicians on how their specific prescribing patterns compared with those of providers in other areas;
  • Reduced or eliminated beneficiaries' share of the costs for Part B drugs; and
  • Set a standard payment rate for a group of "therapeutically similar drug products." 

Specialty physicians and other health care providers had spoken out against the proposal, saying payment reductions included in the plan could be detrimental to their practices. Republicans and some Democrats also opposed the proposed rule, arguing that the changes could limit Medicare beneficiaries' access to certain drugs and harm independent, small, and rural physician practices. The pharmaceutical industry opposed the proposal as well. In response, CMS under former President Barack Obama said it would not immediately finalize the proposal.

CMS withdraws proposal

CMS on Tuesday said the agency had decided to officially withdraw the proposed rule after reviewing hundreds of public comments—some of which "signaled their support for the proposed rule" and "a number of [which] expressed concerns."

Other withdrawn proposals

CMS on Tuesday also withdrew a proposed rule that would have revised certain definitions and patients' rights provisions intended to ensure that certain health care facilities that receive Medicare and Medicaid funds recognize same-sex spouses and afford them equal rights, Becker's Hospital Review reports. CMS in the withdrawal notice said a subsequent Supreme Court decision, Obergefell v. Hodges, "has addressed many of the concerns raised" in the rule.

In addition, HHS on Tuesday withdrew a proposed rule that would have required health plans that control their own business activities to demonstrate HIPAA compliance for certain electronic transactions. HHS said it chose to withdraw the rule to "re-examine the issues and explore options and alternatives to comply with the statutory requirements" (Frieden, MedPage Today, 10/3; AHA News, 10/3; Ellison, Becker's Hospital Review, 10/4).

Help patients navigate rising prescription drug costs

The rising cost of drugs is placing an increasing financial burden on patients, in many cases leading them to delay or forgo care or default on their medical bills.

Join us on Tuesday, October 24 at 1 pm ET to learn best practices for helping patients understand their insurance coverage, estimate and plan for their out-of-pocket expenses, and secure copay assistance or drug replacement.

Register Here

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