The Academy continues to uncover important understanding of a new Trump administration proposal that would revolutionize how Part B drugs are reimbursed under Medicare. President Trump announced a new Part B drug demonstration in October as part of an ongoing effort to reduce Medicare payments for Part B drugs. The latest insights based on intensive Academy analysis and discussions include:
- The demonstration will exclude Avastin and all other compounded treatments, as well as Medicare Advantage beneficiaries.
- The Centers for Medicare & Medicaid Services is beginning to outline the geographic framework by which it can capture at least 50 percent of the current spending on affected drugs.
The new insights are the result of extensive Academy discussions with industry, other medical specialty stakeholders and CMS officials.
CMS is beginning to outline the framework by which it will determine where the demonstration is to take place. The agency says it has yet to decide which geographic areas it will include but shared that it wants to include those in which it can capture at least 50 percent of the current spending on affected drugs.
As part of this new, national demonstration, the U.S. would adopt lower prices based on what foreign countries already pay through an International Pricing Index. It also would separate physicians’ payments for handling and inventory costs from the price of the drugs.
The Medicare program would pay physicians an additional flat-rate payment for storage and handling. CMS is looking at whether that payment would be per episode or monthly. The funds for the first year of this flat fee payment would come from a pool of money based on the previous year’s claims data of what was paid for the average sales price, plus 6 percent.
Following President Trump’s announcement, CMS head Seema Verma told the Academy that the administration’s goal is to develop a policy after medical providers give input and to take steps to ensure fewer burdens on physicians. In addition to CMS’ stated goal of lowering costs by 30 percent over five years, the policy is designed to “keep physicians whole,” she said.
The Academy is concerned, however, about the potential effect of the lower International Pricing Index payments on ASP+ reimbursements outside of the demonstration.
The proposal is similar to Medicare’s previous competitive acquisition program. That program ultimately proved untenable, largely due to logistical issues. Still, the Academy supported the concept. A return to that concept would need to address the previous issues that affected timely access to Part B drugs, something Verma acknowledged.
Verma said this proposal would differ in that it would give physicians more choice between vendors and could even leverage existing distribution channels. These choices could include the manufacturer or even a large physician practice acting as a group purchasing organization.
Current plans would have this program in effect no earlier than the spring of 2020. To achieve this goal, both the proposed and final rules would need to be out in 2019 with enough time to approve vendors and establish the add-on payment system.
The Academy believes that if prices go down, everyone – patients, physicians and drug makers – will be winners. But our core beliefs remain unchanged: Ophthalmologists want our patients to have timely access to the treatments they need. We also need the flexibility to provide our patients with whatever care we deem appropriate. As such, maintaining access is critical.