Medicare Looking For New Drug Reimbursement Model To Lower Medication Prices

New DrugIn an effort to drive costs down while improving patient care quality, Medicare officials have recently proposed doctors receive new drug reimbursements. The Centers for Medicare and Medicaid Services (CMS) have just announced its plans to test several new methods for paying out these reimbursements over the next five years by connecting them with patient outcomes.

The hope is to steer doctors towards using more effective drugs regardless of the price.   As you might expect, of course, pharmaceutical industry representatives criticize the new strategy. Pharmaceutical Research and Manufacturers of America, for example, contends: “The current Medicare Part B drug payment methodology is an effective, market-based pricing mechanism that works to control costs. Proposing sweeping changes to Medicare Part B drug reimbursement without thoughtful consideration and stakeholder input is not the right approach and puts Medicare patients who rely on these medicines at risk.”

CMS chief medical officer Patrick Conway, however, reports that doctors tell him—all the time—they are constantly under pressure to prescribe the more expensive drug in order to receive the bigger payout. “These models would test how to improve Medicare beneficiaries’ care by aligning incentives to reward value and the most successful patient outcomes. The choice of medications for beneficiaries should be driven by the best available evidence, the unique needs of the patient, and what best promotes high quality care.”

He also notes that finding the most effective drug treatments at the best price is not their only goal. CMS is also considering the testing of standard payment rates for groups of similar, therapeutic drugs as well as entering into voluntary agreements with several drug companies who will link patient outcomes with overall price for those patients who have Medicare.

“These proposals would allow us to test different ways to help Medicare beneficiaries get the right medications and right care while supporting physicians in the process,” explains Andy Slavitt, who is the acting administrator for CMS. “This is consistent with our focus on testing value-based care models like we have been doing with physicians and hospitals in affordable care organizations. Models like this one can help doctors and other clinicians do what they do best: choose the medicine and treatment that keeps their patients healthy.”

Of course, the agency must continue to investigate and test this new strategy to ensure benefits on all sides.

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