Medicare’s proposed Part B drug payment model – what beneficiaries need to know
Medicare recently proposed a new model to get better value for people with Medicare who get drugs at a doctor’s office or as a hospital outpatient. These types of drugs include intravenous infusions (IVs) like cancer treatment drugs, injectables like antibiotics or eye care treatments, and other drugs that require a medical professional to administer.
The proposed model is part of the Administration’s broader strategy to encourage better care, smarter spending and healthier people by compensating providers for what works, unlocking health care data, and finding new ways to coordinate and integrate care to improve care quality.
What would the Part B Drug Payment Model Do?
The proposed model would help improve patient care and the value of Medicare drug spending by testing different ways Medicare Part B provides drugs. The model would encourage providers to choose the drug that is most effective by:
- Changing how Medicare pays for drugs to make sure that doctors aren’t penalized for choosing the most effective drug if it happens to be inexpensive. Today, if a doctor chooses a lower-priced but more effective drug, he or she is paid less.
- Using proven tools to get beneficiaries better value and help physicians make better decisions on the most effective drug. For example, Medicare might work with drug manufacturers to reward providers for choosing drugs that are more effective in outcomes like survival, cure rate, and avoidance of hospitalization.
- Reducing cost sharing, for very effective or high value drugs to encourage beneficiaries choose and use these drugs.
Would beneficiaries still have access to the same drugs and choice of doctors?
- Yes. This proposed model would not affect drug coverage or any other Medicare benefits.
- Beneficiaries in Original Medicare would retain complete freedom of choice of doctors, hospitals, and other providers.
What patient protections would be in place?
Under the proposed model:
- All standard Medicare appeals processes would stay the same.
- There would also be a new exceptions process that would allow the beneficiary, provider, or supplier to explain why Medicare’s value pricing policy is not appropriate for the beneficiary and to seek an exception from the model’s pricing approach. The beneficiary would receive a response within five business days.
- To monitor quality and safety, there would be a real-time claims monitoring program to track utilization, spending, and prescribing patterns as well as changes in site of service delivery, mortality, hospital admissions, and other indicators present in claims data. This would help ensure that Medicare beneficiaries will continue to have access to Part B drugs under the model.
When would the proposed model start and would I be affected?
The model would start no earlier than Fall of 2016 and would not be fully phased in until 2017. Beneficiaries may not notice any change. Most physician practices and hospitals, except in certain areas of the country would be participating in the model. The exact geographic locations the model would be operational in will be posted later this year.
CMS values public input and looks forward to continuing to work with stakeholders through the rulemaking process to maximize the value and learning from this model.
###