• Academy to CMS: Make Part B Demonstration Voluntary, Well-Defined

    The Academy is urging the Centers for Medicare & Medicaid Services to take several important steps to ensure its new Part B drug demonstration is a success for both patients and physicians.

    As part of this national test, which is slated to begin in 2020, Medicare 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.

    In comments to CMS issued last week, we stress that the demonstration must be voluntary, a direct response to CMS saying that it will be mandatory. We also urge CMS to carefully define its expectations of its vendors who would now purchase and deliver the drugs.

    The Academy objects to CMS making this program mandatory for physicians and patients because previous attempts to establish competitive acquisition programs failed to demonstrate their viability. 

    Although some of the proposal’s broader details are known, both through our conversations with the agency and published reports, CMS is still working to iron out important details. The Academy is engaging in a direct dialogue with Administrator Seema Verma and her staff to try to ensure this concept works for our profession. We’re providing an ophthalmology-specific perspective, while receiving assurances that the demonstration would be designed in a way to limit disruption to physicians and our patients. 

    We also continue to seek protections for physicians who are outside of the regions that CMS designates for this demonstration. For example, the proposal’s implications for average sales price drug payments. The Academy believes that any experiment with lower International Pricing Index-based payments for drugs must not affect average sales price-based payments to physicians in regions where the demonstration is not taking place, i.e., CMS must not lower average sales price-based payments during the demonstration’s five-year duration. 


    The new Part B demonstration would pay physicians a flat-rate for storage and handling of drugs. The funds for the first year of this payment would come from a pool of money based on the previous year’s claims data calculated on the average sales price plus 6 percent, rather than 4.3 percent. Questions remain regarding how often payments would be made, although CMS is considering paying varying rates based on specialty and/or class of drug.

    Following President Trump’s announcement, Verma told the Academy that the administration’s goal is to secure medical providers’ 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 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. 

    She 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 directly or a large physician practice acting as a group purchasing organization.

    Current plans would have this program in effect no earlier than spring 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.