Organized medicine slams Part B pay plan

July 1, 2016

An Obama administration plan to reform Medicare Part B payment policy has generated a chorus of bipartisan opposition from influential lawmakers and many in the medical community, including a leading oncologist who told Congress the initiative is simply an effort to cut costs by accusing physicians of prescribing more expensive drugs for profit.

Washington-An Obama administration plan to reform Medicare Part B payment policy has generated a chorus of bipartisan opposition from influential lawmakers and many in the medical community, including a leading oncologist who told Congress the initiative is simply an effort to cut costs by blaming physicians for prescribing more expensive drugs for profit.

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In all, the Centers for Medicare & Medicaid Services (CMS) received more than 1,300 comments regarding the proposal by its May 9 deadline and is being pressured to ditch it. The leadership of the House Energy and Commerce Health Subcommittee termed it an “alarming Medicare drug experiment” during a hearing May 17 held to consider legislation that would prevent its implementation by CMS. 

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Next: Plan reduces markup to 2.5%

 

Plan reduces markup to 2.5%

At issue is CMS’s model plan to dramatically change how most Part B administered drugs would be reimbursed through a mandatory nationwide two-stage program slated to go into effect in the fall. Proposed under the authority of the CMS Innovation Center, given broad authority under the Affordable Care Act (ACA) to test new payment and delivery models, the plan would reduce payments from the average sales price (ASP) + 6% to the ASP + 2.5%, plus a fixed payment of $16.80. However, opponents point out that previously imposed sequestration requirements would effectively wipe out the 2.5% markup.

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Under the ACA, the plan would take effect unless Congress specifically passes legislation to kill it.

America’s Health Insurance Plans, in its comments to CMS, noted that Part B payments have increased an average of 8.6% annually since 2007, with total Part B spending doubling from $11 billion in 2007 to $22 billion in 2015. The organization credited CMS with “shining a light on a fundamental concern about the affordability of prescription drugs for beneficiaries and taxpayers.”

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Next: Health Subcommittee testimony

 

But in testimony before the Health Subcommittee, Debra Patt, MD, MPH, MBA, medical director at The U.S. Oncology Network, cited a recently released study by the actuarial firm Milliman, which showed that from 2004 through 2014, Medicare’s cost of treating cancer patients rose at a rate that was no greater than spending on Medicare patients overall.

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“In fact, if the site of cancer care had not shifted from physician-run community cancer clinics to outpatient hospital departments during this period, the per-beneficiary cost of treating a cancer patient would have risen at a lower rate than for all Medicare beneficiaries,” she said, suggesting that the Milliman study’s results should guide the congressional response to CMS’s proposal.  

“The ‘Part B Drug Payment Model,’ which is aimed at reducing Medicare drug spending, is ill conceived and, most importantly, lacks a patient-centered focus,” Dr. Patt told the subcommittee. “I am disappointed that CMS has masked their efforts to control rising drug costs by suggesting physicians are not providing their patients with the most appropriate, highest quality medical care, but instead prescribe more expensive drugs for ‘profit.’ ”

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Next: "CMS is absolutely incorrect"

 

“CMS is absolutely incorrect in its assumptions that reducing reimbursement for Part B drugs will both lower Medicare costs and drug prices,” Dr. Patt said. In fact, she said, the CMS-imposed cuts would actually increase Medicare costs and further fuel drug prices-the opposite of CMS’s stated intention.

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She called the plan “unworkable” and urged Congress to “please stop this experiment on seniors with cancer and other serious diseases treated with Part B drugs.”

Also testifying before the subcommittee was Michael Schweitz, MD, a rheumatologist who spoke on behalf of the Coalition of State Rheumatology Organizations and the Alliance of Specialty Medicine, of which the AUA is a member.

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Dr. Schweitz called the initiative “misguided” as it does not directly address the manufacturer’s ASP, “which is a more significant driver of drug expenditures than the add-on payment amount for Part B drugs.”

Thus, he suggested, the problem lies with the drug manufacturers’ pricing policies, not physicians being motivated by profit.

Next: Republicans, Democrats urge withdrawal 

 

Republicans, Democrats urge withdrawal

Both Republican and Democratic members of Congress, including those on the subcommittee, have urged CMS to withdraw the proposal, or at the least, significantly modify it.

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Rep. Fred Upton (R-MI), subcommittee chairman, said he supports efforts to test models that seek to improve quality of care, lower cost, and increase access. However, he said CMS’s Part B plan is “unnecessary and disruptive.”

In early May, more than 240 members of Congress submitted a letter to CMS demanding that the plan be scrapped. Another letter, signed by 16 House Democrats, was sent May 13, expressing opposition to any proposal that would force “underserved patients… to travel farther to more expensive infusion centers to access needed care.”

In addition, a dozen Democratic U.S. Senators wrote to CMS in April urging that it address several issues involving patient access and quality of care, patient input throughout the duration of the model, and that the scope of each phase of the model be no larger than necessary.

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It will be interesting to see just how CMS responds to all of these concerns, especially given the negative publicity surrounding skyrocketing drug prices generally in the context of the 2016 congressional and presidential election campaigns.

Next: Callout 

 

Callout

“The ‘Part B Drug Payment Model,’ which is aimed at reducing Medicare drug spending, is ill conceived and, most importantly, lacks a patient-centered focus.”

Debra Patt, MD, MPH, MBA

The U.S. Oncology Network

 

Fast Facts

A proposal to reform Medicare Part B payment policy:

• would reduce Part B drug payments from the average sales price (ASP) + 6% to the ASP + 2.5%, plus a fixed payment of $16.80

• has been sharply criticized by organized medicine and Democratic and Republican members of Congress

• takes effect unless Congress specifically passes legislation to kill it

 

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