The purpose of the new drug payment model is to modify how Medicare Part B pays for prescription drugs in a manner that better encourages physicians to select the most effective treatments for patients and slows Medicare spending.
Medicare Part B covers prescription drugs administered in a physician’s office or hospital outpatient department. Physicians and outpatient departments are typically paid the average sales price of a drug, plus a 6 percent add-on. CMS has proposed changing the add-on payment to 2.5 percent plus a flat fee payment of $16.80 per drug per day.
Regarding the changes, the AHA said the proposed model should not include hospitals, which “have little control over which drugs physicians prescribe in hospital-based settings.”
If CMS moves forward with including hospitals in Phase I of the model, the AHA recommends CMS implement the model on a smaller scale and consider alternative payment options.
The AHA also took issue with the model’s lack of quality measures, which it believes are critical to ensuring the drug payment model doesn’t reduce quality of care.
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