CMS nixes Medicare Part B proposal

Medical groups and the incoming ranking member of the Ways and Means Committee are applauding a decision by the Centers for Medicare and Medicaid Services Innovation Center to abandon its proposal on how physicians are reimbursed for administering drugs under Medicare Part B.

The news that CMS will not finalize the Medicare Part B drug payment model was released Thursday night in a story first published in Politico.

CMS unveiled the new model in March to test whether alternative payments would give incentives to prescribe less costly drugs, leading to a reduction in Medicare expenditures.

Currently, physicians and hospital outpatient departments are paid the average sales price of a drug, plus a 6 percent add-on.

The proposed model would have tested changing the add-on payment to 2.5 percent plus a flat fee payment of $16.80 per drug, per day. The test was scheduled to begin in late 2016, 60 days after the rule was finalized.

[Also: Healthcare, patient groups speak out against Medicare Part B proposal]

While groups such as AARP, formerly called the Association of Retired Persons, lobbied for the measure as a way to lower drug prices for senior citizens, medical associations applauded Thursday's decision. They also gave kudos to CMMI, which may no longer be part of a new administration.

"This is a model for how Washington should – but often doesn't – work," said American Medical Association President Andrew W. Gurman, MD. "When the Center for Medicare & Medicaid Innovation  made the recommendation to make changes to Medicare Part B, CMMI and CMS officials welcomed feedback. The AMA and others explained how the proposal would hurt patient care. CMMI then re-evaluated its original proposal, resulting in the announcement that CMS would not go forward with these changes."

The American Medical Association called CMMI a valuable tool in developing innovative health care payment and service delivery models and said it looked  forward to continuing working with it to implement MACRA, the Medicare Access and CHIP Reauthorization Act.  

[Also: New bipartisan legislation would allow late Medicare part B enrollment]

"MGMA is pleased CMS withdrew the proposal as it failed to tackle the root cause of growing Part B drug costs, which are set by manufacturers," said Medical Group Management Association President and CEO Halee Fischer-Wright, MD.  "Our primary concern was it would force physician practices to either write off losses from below-cost drug reimbursements to physicians or send patients to more expensive hospital outpatient departments for life saving treatments such as chemotherapy."

[Also: CMS introduces new Medicare-Medicaid ACO model]

"I'm pleased to see the Administration is not moving forward with the proposed Medicare Part B demonstration, as there were many unanswered questions about the proposal," said Rep. Richard Neal, D-Massachusetts, incoming Ranking Member of the House Ways and Means Committee. "Despite this decision, I believe CMS should continue to focus on the core CMMI mission of transforming the delivery system and improving care for patients by building on the numerous innovative models already in use across the country. These models are showing us that the work being done at CMMI has already begun driving a sea change in ‎the delivery of care in the U.S., which is a positive development for patients at home in Massachusetts and around the country."

Twitter: @SusanJMorse