CMS NEWS
FOR IMMEDIATE RELEASE
March 8, 2016
Contact: CMS Media Relations
(202) 690-6145 | CMS
Media Inquiries
Next step to address access,
affordability, and innovation in prescription drugs
Today, the Centers for Medicare & Medicaid Services (CMS) announced a
proposed rule to test new models to improve how Medicare Part B pays for
prescription drugs and supports physicians and other clinicians in delivering
higher quality care. CMS values public input and comments as part of the
rulemaking process, and looks forward to continuing to work with stakeholders
through the rulemaking process to maximize the value and learning from the
proposed tests.
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. The proposed Medicare Part B Model would test new ways to
support physicians and other clinicians as they choose the drug that is right
for their patients.
The
proposed rule is designed to test different physician and patient incentives to
do two things: drive the prescribing of the most effective drugs, and test new
payment approaches to reward positive patient outcomes. Among the approaches to
be tested are the elimination of certain incentives that work against the
selection of high performing drugs, as well as the creation of positive
incentives for the selection high performing drugs, including reducing or
eliminating patient cost sharing to improve patients’ access and
appropriate use of effective drugs.
“First and foremost, our job is to get beneficiaries the medications they
need. These proposals would allow us to test different ways to help Medicare
beneficiaries get the right medications and right care while supporting
physicians in the process,” said Andy Slavitt, Acting Administrator for CMS.
“This is consistent with our focus on testing value-based care models like we
have been doing with physicians and hospitals in ACOs. Models like this one can
help doctors and other clinicians do what they do best: choose the medicine and
treatment that keeps their patients healthy.”
Today’s proposal is part of the Administration’s broader strategy to
encourage better care, smarter spending, and healthier people by paying for
what works, unlocking health care data, and finding new ways to coordinate and
integrate care to improve quality.
“These models would test how to improve Medicare beneficiaries’ care by
aligning incentives to reward value and the most successful patient outcomes,”
said Dr. Patrick Conway, CMS Deputy Administrator for
Innovation and Quality & CMS Chief Medical Officer. “The choice of
medications for beneficiaries should be driven by the best available evidence,
the unique needs of the patient, and what best promotes high quality care.”
Prescription drug spending in the U.S. was about $457 billion in 2015, or
16.7 percent of overall health spending, according to a report also released
today. In 2015, Medicare Part B spent $20 billion on outpatient drugs
administered by physicians and hospital outpatient departments.
The proposed rule seeks comments on
testing six different alternative approaches for Part B drugs to improve
outcomes and align incentives to improve quality of care and spend dollars
wisely; these include:
- Improving incentives for
best clinical care. Physicians
often can choose among several drugs to treat a patient, and the current
Medicare Part B drug payment methodology can penalize doctors for selecting
lower-cost drugs, even when these drugs are as good or better for patients
based on the evidence. Today, Medicare Part B generally pays physicians
and hospital outpatient departments the average sales price of a drug,
plus a 6 percent add-on. The proposed model would test whether changing
the add-on payment to 2.5 percent plus a flat fee payment of $16.80 per
drug per day changes prescribing incentives and leads to improved quality
and value. The proposed change to the add-on payment is budget neutral.
- Discounting or
eliminating patient cost-sharing. Patients are often required to pay for a portion of
their care through cost-sharing. This proposed test would decrease or
eliminate cost sharing to improve beneficiaries’ access and appropriate
use of effective drugs.
- Feedback on prescribing
patterns and online decision support tools. This proposed test
would create evidence-based clinical decision support tools as a resource
for providers and suppliers focused on safe and appropriate use for
selected drugs and indications. Examples could include best practices in
prescribing or information on a clinician’s prescribing patterns relative
to geographic and national trends.
- Indications-based
pricing.
This proposed test would vary the payment for a drug based on its clinical
effectiveness for different indications. For example, a medication might
be used to treat one condition with high levels of success but an
unrelated condition with less effectiveness, or for a longer duration of
time. The goal is to pay for what works for patients.
- Reference pricing. This proposed model
would test the practice of setting a standard payment rate—a benchmark—for
a group of therapeutically similar drug products.
- Risk-sharing agreements
based on outcomes. This proposed test would allow CMS to enter into
voluntary agreements with drug manufacturers to link patient outcomes with
price adjustments.
Today’s announcement is a
continuation of the Department of Health and Human Services’ (HHS) work from
last fall when HHS convened a forum that brought together consumers,
physicians, clinicians, employers, manufacturers, health insurance companies,
representatives from state and federal government, and other stakeholders to
discuss ideas on how the health care system can meet the dual imperatives of
encouraging drug development and innovation, while ensuring access and
affordability for patients.
A fact sheet with more information
about the proposed rule is available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-03-08.html.
A fact sheet with more information
about what Medicare beneficiaries need to know about the proposed model is
available at: https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2016-Fact-sheets-items/2016-03-08-2.html.
The proposed rule will be open to a
60-day comment period. CMS is accepting comment on the proposed rule through
May 9, 2016. https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-05459.pdf
and 03/11/2016 and available online
at http://federalregister.gov/a/2016-05459
Additional information on the proposed rule is available at: https://innovation.cms.gov/initiatives/part-b-drugs.
To learn more about Medicare Part B
Drugs: Pricing and Incentives visit: https://aspe.hhs.gov/pdf-report/medicare-part-b-drugs-pricing-and-incentives.
To read an issue brief on
Observation Trends in Prescription Drug Spending visit: https://aspe.hhs.gov/pdf-report/observations-trends-prescription-drug-spending.
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