On March 8th, the Centers for Medicare & Medicaid Services posted a Notice of Proposed Rulemaking to test a new model for the payment of physician administered drugs under the Part B program, including drugs paid separately under the Outpatient Prospective Payment System (OPPS).
On March 8th, the Centers for Medicare & Medicaid Services posted a Notice of Proposed Rulemaking to test a new model for the payment of physician administered drugs under the Part B program, including drugs paid separately under the Outpatient Prospective Payment System (OPPS). The first part of the two part model (scheduled for implementation 60 days after publication of a Final Rule later in 2016) would replace the current ASP+6 payment rate with a payment rate equal to ASP + 2.5 percent with the addition of a flat fee. The second phase of the model (scheduled for implementation on or after January 2017) would implement a variety of value-based purchasing tools to encourage value based prescribing and utilization of prescription drugs. This model closely reflects the June 2015 MedPAC proposal to replace the ASP + 6 percent payment with a payment rate equal to ASP + 2.5 percent + a flat fee.
Most providers of separately payable Part B drugs, with the exception of providers in Maryland; and most separately payable Part B drugs, with the exception of vaccines, infusion drugs administered through durable medical equipment (during the first phase), contractor priced drugs, blood and blood products, and drugs paid under the ESRD bundle would be subject to the new payment model.
Under Phase I of the model, providers assigned to a test group would receive payment for separately payable Part B drug claims from providers in the test group at ASP +2.5 percent with an additional flat fee of $16.80 (the flat-fee would be updated annually based upon the CPI-Medical Care). Under Phase II of the model, a variety of value-based purchasing tools may be used, including indication-based pricing, reference pricing, outcomes-based risk agreements, and adjustments to beneficiary cost-sharing. In addition, clinical decision support tools would be used as mechanisms to incentivize more efficient and value based drug purchasing and prescribing decisions.
The demonstration models will include 4 groups: (1) a control group continuing to be paid at ASP+6%, (2) a test group paid at ASP+2.5% plus an add-on fee, (3) a test group paid under ASP+6% with value-based purchasing tools, and (4) a test group paid under both ASP+2.5% plus and add-on fee with value-based purchasing tools. The groups will be designated by Primary Care Service Areas (PCSAs).
CMS designed Phase I of the model to be budget neutral, but notes that is expects savings to accrue from behavioral responses. CMS expects savings to accrue from Phase II but notes that they cannot gauge the magnitude of such savings.
The model is intended to run 5 years.
Comments are due to CMS by May 9, 2016.
The full proposal in available here.
