The agency provided information on the changes under consideration in a memo that was published to its website, but the memo was later taken down because its release was “premature,” Bloomberg reported.
However, CMS’ memo told Medicare contractors who process such payments to create a system that will allow the government to reimburse physicians for the drugs they administer, with reimbursement rates varying by geographic location. From there, the government could launch a pilot program to assess how limiting reimbursement in Medicare Part B affects physicians’ choice of drugs, according to the report.
The current methodology for reimbursing physicians under Medicare Part B “does not take into account the effectiveness of a particular drug, or the cost of comparable drugs, when determining the Medicare payment amount,” the memo read, according to the report. It “has been criticized for encouraging the use of more expensive products because the add-on to the drug’s cost is a percentage of the sales price while handling and overhead costs may not vary.”
Medicare Part B covers drugs administered in the physician’s office, such as cancer treatment and other medications delivered through an infusion. Medicare typically reimburses physicians the average sale price of a drug, plus an additional 6 percent, according to the report. This model has been criticized for incentivizing physicians to choose more expensive drugs.
“As we have said, we are examining potential ways to support increased access to information, drive innovation and strengthen incentives to improve quality care,” the agency told InsideHealthPolicy when asked about the memo, according to Bloomberg. “We continue to look at a number of options in this area.”
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