Obama halts over­haul to drug pay­ments

The Washington Times Daily - - POLITICS - BY TOM HOW­ELL JR.

The Obama ad­min­is­tra­tion has dropped its con­tentious push to over­haul how it pays doc­tors and hos­pi­tals for drugs they ad­min­is­ter un­der Medi­care Part B.

Pitched as a way to rein in drug costs while putting pa­tients first, the pro­posed pay­ment struc­ture had been blasted by lob­by­ing groups and Repub­li­cans as a dan­ger­ous “ex­per­i­ment” with se­niors’ care.

Even some wary Democrats ex­pressed re­lief Fri­day, af­ter the ad­min­is­tra­tion re­versed its plans.

“While the pro­posed Medi­care Part B demon­stra­tion had ad­mirable goals, our mem­bers raised a num­ber of con­cerns, and we are pleased the Cen­ter for Medi­care and Med­i­caid In­no­va­tion has de­cided not to move for­ward,” said House Mi­nor­ity Leader Nancy Pelosi, Cal­i­for­nia Demo­crat.

Un­der the cur­rent sys­tem, health care providers are paid the sales price of a drug, plus 6 per­cent for han­dling the treat­ments, which in­clude things like can­cer drugs, in­jecta­bles such as an­tibi­otics and eye treat­ments.

That scheme com­pelled some health sys­tems to push for more ex­pen­sive drugs and reap a higher re­im­burse­ment rate, even when a dif­fer­ent drug might be bet­ter for the pa­tient, the ad­min­is­tra­tion said last March, when it rolled out its plan.

Un­der the pro­posed model, providers would have re­ceived an add-on pay­ment of 2.5 per­cent of the drug’s cost, plus a flat fee of $16.80 per drug.

The ad­min­is­tra­tion said its pro­posal would be bud­get neu­tral and fits into its broader ef­forts to put the qual­ity of care over how many ser­vices doc­tors pro­vide.

The Health and Hu­man Ser­vices De­part­ment de­flected early crit­i­cism from the phar­ma­ceu­ti­cal lobby and top Repub­li­cans, say­ing it would fash­ion their in­put into its fi­nal plans. Yet it beat a re­treat this week, as the Obama ad­min­is­tra­tion pre­pares to hand the reins to Pres­i­dent-elect Don­ald Trump.

“The pro­posal was in­tended to test whether al­ter­na­tive drug pay­ment struc­tures would im­prove the qual­ity of pa­tient care and the value of Medi­care drug spend­ing,” said Aaron Al­bright, spokesman for the Cen­ters for Medi­care and Med­i­caid Ser­vices. “While there was a great deal of sup­port from some, a num­ber of stake­hold­ers ex­pressed strong con­cerns about the Model. While CMS was work­ing to ad­dress these con­cerns, the com­plex­ity of the is­sues and the lim­ited time avail­able led to the de­ci­sion not to fi­nal­ize the rule at this time.”

The Part B pro­posal had sprung from an in­no­va­tion cen­ter cre­ated as part of Oba­macare, but con­gres­sional Repub­li­cans and Mr. Trump have vowed to scrap the 2010 law.

Mr. Trump’s pick to lead the De­part­ment of Health and Hu­man Ser­vices — Rep. Tom Price, Ge­or­gia Repub­li­can — last spring said the pro­posal would “ex­per­i­ment with the lives of vul­ner­a­ble se­niors and the na­tion’s sick­est pa­tients.”

Be­yond Capi­tol Hill, med­i­cal groups such as the Amer­i­can Med­i­cal As­so­ci­a­tion re­joiced at CMS’ de­ci­sion to drop the idea, af­ter stake­hold­ers re­volted.

“This is a model for how Wash­ing­ton should — but of­ten doesn’t — work,” AMA Pres­i­dent An­drew W. Gur­man said.


House Mi­nor­ity Leader Nancy Pelosi said she was pleased the new Medi­care Part B pay­ment plan was dropped.

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