Medicare Monday: 3 things to know about the government’s Medicare payment change

Last week, the Centers for Medicare & Medicaid Services (CMS) released a proposed demonstration through the Innovation Center to change how Medicare Part B drugs are reimbursed.

Here are the three things you need to know:

1. Limits would be placed on patient access and provider choice by allowing the government to make one-size-fits-all decisions about health care.

Selecting the right treatment depends on a variety of clinical factors, as well as needs, characteristics and preferences specific to an individual patient. Medicare Part B was set up to allow physicians to make the best decisions for their patients, offering a wide range of treatment options for patients suffering from serious illnesses, including cancer, rheumatoid arthritis, autoimmune disorders and more. 

This proposal would come between providers and patients by allowing the government to make one-size-fits all value judgments about the best care for Medicare patients.  As new medicines become available, especially new targeted and personalized medicines, like President Jimmy Carter’s recent cancer treatment, Medicare physicians and patients should have those options available to them.

2. Mandating broad changes for the majority of Medicare beneficiaries is government overreach.

The Center for Medicare & Medicaid Innovation (CMMI) has the authority to test alternative payment models and new ways of paying for care. But it is just that: for testing promising new practices in small controlled groups.

This proposal is mandatory and nationwide, which marks a dramatic departure from CMMI’s usual, voluntary testing approach. Rather, this model flies in the face of testing by making changes to payment for nearly all Part B medicines and mandating participation for three in four Medicare Part B providers in diverse settings, including hospital outpatient departments, physician offices and pharmacies. As a result, this model will affect care for Medicare patients across the country. Physicians treating the sickest patients could have their reimbursement cut dramatically, disproportionately impacting specialists who treat complex diseases.

To test this model, CMMI will waive several provisions of Medicare law. Mandating broad changes to laws established by Congress without a thoughtful stakeholder process both before and during development is a government overreach – and sets a bad precedent for establishing Medicare coverage and reimbursement policy.

3. Broad changes that fail to recognize the value of innovative, targeted therapies could hinder future innovation.

While policymakers are emphasizing accelerating personalized medicine, cancer cures and more, this proposal has the opposite effect. It could discourage investment in future treatment advances, many of which are expected to be Part B medicines, as well as have a negative impact on the adoption of novel targeted therapies that benefit patients.

Medicare Part B already uses an effective, market-based mechanism to pay for medicines, and research shows Part B medicines are a small and stable share of Medicare Part B spending. Mandating nationwide, sweeping changes to this program without thoughtful consideration and process puts Medicare patients at risk.

We’ll be exploring more on this topic in the coming weeks, so be sure to subscribe for updates here.