NAMDRC Signals Concern Over CMS Proposed Changes in Payment Methodology

CMS has proposed a dramatic change in the methodology used to determine payment to physician offices that provide drugs covered under the Part B Medicare benefit. Under current policy, physician offices are reimbursed at a rate of the average sales price (ASP) +6%. While not exactly a “moneymaker” in the pulmonary space, this policy has been particularly attractive to oncologists who have the opportunity to select expensive medicines that, according to CMS, may overlook very similar, less expensive drugs.

The proposal, in effect a nationwide pilot, reduces the payment to ASP + 3%, plus a $16 administrative fee. The response from the oncology community has been vociferous opposition, and it has garnered significant support on Capitol Hill. But the impact on the pulmonary community has, for the most part, been muted, thanks to uncertainty about the impact such a policy change may trigger. NAMDRC submitted detailed comments to CMS, highlighting concerns that this initiative, which is mandatory and nationwide in scope, could adversely impact the medical care of seniors who suffer from COPD and other related pulmonary diseases. NAMDRC is also concerned about the precedent this policy sets by using limited demonstration authority to change statutory payment policy nationwide.

While NAMDRC supports the goals of developing new health-care delivery methods to increase quality and provide more efficient patient care, it is nevertheless troubled by the Part B drug reimbursement policy proposed by CMS, as it appears to have been created in a vacuum without any input from stakeholders involved, particularly beneficiaries and their physicians. Forcing vulnerable Medicare beneficiaries, many with potentially life-threatening conditions, including COPD, the third leading cause of death in the United States, and asthma, to be exposed to a new mandatory payment initiative that runs the notable risk of impeding access to life-saving therapies runs counter to the initiatives that Congress has put forth.

While NAMDRC understands the need to look seriously at cost issues within our core health programs, we must not subject beneficiaries and their physicians to the problematic choice between practice economics and prescribing the most medically appropriate treatment for each individual patient. As CMS knows, biologic medications for treatment of asthma are likely to take an important role in treatment protocols in the immediate future; one new biologic for asthma was approved recently, and two new biologics in the pipeline are likely to be approved by the end of the year. Beyond asthma, the development of new biologics in the pulmonary field is likely to expand in the foreseeable future.

As noted above, in the proposed rule, CMS expresses concern that the current 6% ASP add-on payment “may encourage the use of more expensive drugs because the 6% add-on generates more revenue for more expensive drugs.” In addition to lacking any data to support this premise, the reimbursement changes contemplated under this model may actually increase overall health-care spending by causing patients to receive care in more expensive settings.

Most importantly, there is no evidence indicating that the payment changes contemplated by the model will improve quality of care and may adversely impact those patients who lose access to their most appropriate treatments. Instead, NAMDRC believes that Medicare beneficiaries would be best served by a more patient-centric approach with appropriate safeguards, while also fostering physician-patient collaboration and ensuring that the unique needs of seniors are met. Therefore, NAMDRC strongly requested that CMS withdraw the proposed rule and obtain meaningful stakeholder input, including from patients and providers, before proceeding with Phase 2 of the proposed pilot.

2017 Educational Conference planning underway: NAMDRC’s 2017 Program Committee is targeting the middle of July for completion of the primary program for the 2017 conference to be held at the Meritage Resort, Napa, CA March 23-25, 2017. For information on the program, visit www.namdrc.org or call the Executive Office at 703/752-4359.

CMS has proposed a dramatic change in the methodology used to determine payment to physician offices that provide drugs covered under the Part B Medicare benefit. Under current policy, physician offices are reimbursed at a rate of the average sales price (ASP) +6%. While not exactly a “moneymaker” in the pulmonary space, this policy has been particularly attractive to oncologists who have the opportunity to select expensive medicines that, according to CMS, may overlook very similar, less expensive drugs.

The proposal, in effect a nationwide pilot, reduces the payment to ASP + 3%, plus a $16 administrative fee. The response from the oncology community has been vociferous opposition, and it has garnered significant support on Capitol Hill. But the impact on the pulmonary community has, for the most part, been muted, thanks to uncertainty about the impact such a policy change may trigger. NAMDRC submitted detailed comments to CMS, highlighting concerns that this initiative, which is mandatory and nationwide in scope, could adversely impact the medical care of seniors who suffer from COPD and other related pulmonary diseases. NAMDRC is also concerned about the precedent this policy sets by using limited demonstration authority to change statutory payment policy nationwide.

While NAMDRC supports the goals of developing new health-care delivery methods to increase quality and provide more efficient patient care, it is nevertheless troubled by the Part B drug reimbursement policy proposed by CMS, as it appears to have been created in a vacuum without any input from stakeholders involved, particularly beneficiaries and their physicians. Forcing vulnerable Medicare beneficiaries, many with potentially life-threatening conditions, including COPD, the third leading cause of death in the United States, and asthma, to be exposed to a new mandatory payment initiative that runs the notable risk of impeding access to life-saving therapies runs counter to the initiatives that Congress has put forth.

While NAMDRC understands the need to look seriously at cost issues within our core health programs, we must not subject beneficiaries and their physicians to the problematic choice between practice economics and prescribing the most medically appropriate treatment for each individual patient. As CMS knows, biologic medications for treatment of asthma are likely to take an important role in treatment protocols in the immediate future; one new biologic for asthma was approved recently, and two new biologics in the pipeline are likely to be approved by the end of the year. Beyond asthma, the development of new biologics in the pulmonary field is likely to expand in the foreseeable future.

As noted above, in the proposed rule, CMS expresses concern that the current 6% ASP add-on payment “may encourage the use of more expensive drugs because the 6% add-on generates more revenue for more expensive drugs.” In addition to lacking any data to support this premise, the reimbursement changes contemplated under this model may actually increase overall health-care spending by causing patients to receive care in more expensive settings.

Most importantly, there is no evidence indicating that the payment changes contemplated by the model will improve quality of care and may adversely impact those patients who lose access to their most appropriate treatments. Instead, NAMDRC believes that Medicare beneficiaries would be best served by a more patient-centric approach with appropriate safeguards, while also fostering physician-patient collaboration and ensuring that the unique needs of seniors are met. Therefore, NAMDRC strongly requested that CMS withdraw the proposed rule and obtain meaningful stakeholder input, including from patients and providers, before proceeding with Phase 2 of the proposed pilot.

2017 Educational Conference planning underway: NAMDRC’s 2017 Program Committee is targeting the middle of July for completion of the primary program for the 2017 conference to be held at the Meritage Resort, Napa, CA March 23-25, 2017. For information on the program, visit www.namdrc.org or call the Executive Office at 703/752-4359.

CMS has proposed a dramatic change in the methodology used to determine payment to physician offices that provide drugs covered under the Part B Medicare benefit. Under current policy, physician offices are reimbursed at a rate of the average sales price (ASP) +6%. While not exactly a “moneymaker” in the pulmonary space, this policy has been particularly attractive to oncologists who have the opportunity to select expensive medicines that, according to CMS, may overlook very similar, less expensive drugs.

The proposal, in effect a nationwide pilot, reduces the payment to ASP + 3%, plus a $16 administrative fee. The response from the oncology community has been vociferous opposition, and it has garnered significant support on Capitol Hill. But the impact on the pulmonary community has, for the most part, been muted, thanks to uncertainty about the impact such a policy change may trigger. NAMDRC submitted detailed comments to CMS, highlighting concerns that this initiative, which is mandatory and nationwide in scope, could adversely impact the medical care of seniors who suffer from COPD and other related pulmonary diseases. NAMDRC is also concerned about the precedent this policy sets by using limited demonstration authority to change statutory payment policy nationwide.

While NAMDRC supports the goals of developing new health-care delivery methods to increase quality and provide more efficient patient care, it is nevertheless troubled by the Part B drug reimbursement policy proposed by CMS, as it appears to have been created in a vacuum without any input from stakeholders involved, particularly beneficiaries and their physicians. Forcing vulnerable Medicare beneficiaries, many with potentially life-threatening conditions, including COPD, the third leading cause of death in the United States, and asthma, to be exposed to a new mandatory payment initiative that runs the notable risk of impeding access to life-saving therapies runs counter to the initiatives that Congress has put forth.

While NAMDRC understands the need to look seriously at cost issues within our core health programs, we must not subject beneficiaries and their physicians to the problematic choice between practice economics and prescribing the most medically appropriate treatment for each individual patient. As CMS knows, biologic medications for treatment of asthma are likely to take an important role in treatment protocols in the immediate future; one new biologic for asthma was approved recently, and two new biologics in the pipeline are likely to be approved by the end of the year. Beyond asthma, the development of new biologics in the pulmonary field is likely to expand in the foreseeable future.

As noted above, in the proposed rule, CMS expresses concern that the current 6% ASP add-on payment “may encourage the use of more expensive drugs because the 6% add-on generates more revenue for more expensive drugs.” In addition to lacking any data to support this premise, the reimbursement changes contemplated under this model may actually increase overall health-care spending by causing patients to receive care in more expensive settings.

Most importantly, there is no evidence indicating that the payment changes contemplated by the model will improve quality of care and may adversely impact those patients who lose access to their most appropriate treatments. Instead, NAMDRC believes that Medicare beneficiaries would be best served by a more patient-centric approach with appropriate safeguards, while also fostering physician-patient collaboration and ensuring that the unique needs of seniors are met. Therefore, NAMDRC strongly requested that CMS withdraw the proposed rule and obtain meaningful stakeholder input, including from patients and providers, before proceeding with Phase 2 of the proposed pilot.

2017 Educational Conference planning underway: NAMDRC’s 2017 Program Committee is targeting the middle of July for completion of the primary program for the 2017 conference to be held at the Meritage Resort, Napa, CA March 23-25, 2017. For information on the program, visit www.namdrc.org or call the Executive Office at 703/752-4359.