URGENT: Update on CMS Proposed Part B Drug Payment Model

As you are surely aware, on Tuesday, March 8, the Centers for Medicare & Medicaid Services (CMS) posted a proposed rule called the Part B Drug Payment Model. According to this rule, CMS (through its demonstration authority, the Center for Medicaid and Innovation, CMMI) plans to test a two phase payment mode. The Model would run over 5 years, and will explore various payment approaches for Part B drugs. In Phase 1, CMS recommends replacement of ASP + 6% with a fixed percentage of 2.5% and a flat fee of .80 per drug per day administered. When sequestration is applied, the effective payment rate would be ASP + 0.86% plus .80 per drug per day. In Phase 2, CMS proposes to implement value-based payment through indication-based pricing, reference pricing, and clinical decision support tools.

Phase 1 is expected to start as early as this fall (60 days following the display of the final rule). Phase 2 would start no earlier than January 2017. Sequestration still applies because CMS views it as independent of Medicare payment policy. The proposed rule will be open to a 60 day comment period, through May 9, 2016.

The importance of this release cannot be overstated; it is the biggest change in Medicare drug reimbursement in years. Several groups and publications have already raised concern over the effect this ruling would have on specialty care. In a piece published in the New York Times titled "Groups Scrutinize White House Plan to Cut Drug Costs in Medicare," author Robert Pear writes both "drug manufacturers and some cancer doctors criticized the initiative, saying it placed too much emphasis on saving money and too little on ensuring patients' access to treatment."

We anticipate that many healthcare stakeholders, including providers, health systems, pharmaceutical companies, and patient groups will also be aligned in their concern about this proposal.

AmerisourceBergen and IPN are reviewing the proposal in great detail to fully understand the implications of both phases, and our regulatory team is working with our pharmaceutical partners, practice leaders, and congressional representatives to develop an appropriate response. We assure you that we will not stop advocating for specialty care, and will vehemently communicate to Washington and to CMS how detrimental it would be to care in this country if we continue to weaken the community setting.

We'll communicate to you shortly with our recommendations on how you can get involved.

You can see Xcenda's comprehensive summary on this proposed rule HERE.

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