On March 8, 2016, the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) proposed a major national payment demonstration model that, if implemented, would significantly change how Medicare pays for drugs provided through the Part B program.
The proposed two-part model, of which the first phase was scheduled to take place as early as August 1, has since been delayed in the face of strong concerns by physicians, drug companies, patient groups, and Members of Congress. Under the proposed phase one of the new payment formula — intended to change incentives for prescribing certain drugs — the physician reimbursement formula would be amended from 106% of drugs’ average sales price to 102% of the average, plus a flat $16.80 fee. Under this proposal, reimbursement would be heavily impacted for a wide range of providers including rheumatologists.
The first phase of the demonstration model will likely be implemented in a revised form. Dr. Patrick Conway, the CMS Chief Medical Officer, testified on the proposed model before the Senate Finance Committee on June 26, noting a commitment to proceed and a willingness to adjust parts of the proposed policies. Input from the rheumatologic community has included public comments from the Coalition of State Rheumatology Organizations and the American College of Rheumatology, both of which highlighted concerns for alternative treatment options for rheumatologic diseases as well as amendment of key components including geographic and size of practice limitations. While the public comment period ended May 26, the topic remains politically active; for example, the conservative think tank American Action Network announced a $4.8M advertisement campaign including opposition to the proposed rule this month. It is expected that the rule will be finalized any time between now and November, but no formal deadline is in place.
United Rheumatology will continue to monitor developments with this proposed demonstration model and will provide updates as needed.