The Demise of the Part B Demo: Doom For Value-Based Payment?

Last week, the administration announced that it would not finalize the demonstration project designed to test payment changes to drugs in Medicare Part B. Part B covers outpatient drugs, those that are administered in a doctor’s office or a hospital. Payments for drugs under Part B are made directly to providers based on the sales price — without any consideration of effectiveness or any formulary management. The pilot would have changed the payment rate from 6 percent of average sales price (ASP) to 2.5 percent plus a flat fee. A second phase would have tested the use of value-based purchasing tools. The demonstration was beset by criticism from the outset: from pharmaceutical companies, specialty doctors groups, and some patient groups. The proposal even faced pushback from Democrats in Congress. After initially defending it, the administration eventually decided to drop it. But this demonstration was just that: a demonstration, a test. The authority given to the Center for Medicare and Medicaid Innovation (CMMI) only allows the center to expand and spread policies that are shown to reduce costs without decreasing quality or that improve quality without increasing costs. These policies cannot deny or limit benefits. The Part B pilot was designed to test the results of changing payments to doctors. If even the threat of testing meaningful changes provokes this kind of response, it doesn’t bode well for efforts to reduce public sector health care costs in the future...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Drugs and Medical Innovation Medicare Organization and Delivery Payment Policy CMMI Medicare Part B value-based payment Source Type: blogs