Medicare pays providers to administer drugs using a formula based on drugs’ average sales price. That figure does not account for coupons drug companies provide patients with private insurance, which lowers average sales prices.
Increasingly, drugmakers are using coupons as a way to help patients afford products while still maintaining the higher sticker price. This is problematic because Medicare uses the more expensive sticker price to determine providers’ reimbursement, which would artificially inflate reimbursement levels, GAO said.
Last year, pharmaceutical companies that made 29 of the 50 costliest drugs in Medicare Part B offered coupons, according to GAO. It studied coupon discounts for 18 of those drugs and found 19 percent of privately insured individuals used coupons to purchase those drugs in 2013.
GAO estimated Medicare would have saved $69 million in reimbursements had it used drugs’ actual market sales prices.
GAO recommended CMS investigate how much coupons lower drugs’ average market prices.
More articles on finance issues:
CHI to shutter Washington state hospital
5 must-reads on bundled payments
10 statistics and findings on medical debt
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
