Medicare is proposing another initiative to change the way it pays for certain medications. In the wake of dramatic increases in drug spending and a ballooning population of retirees, the public health program is looking for new ways to keep costs down.
The new payment models will affect drugs administered at outpatient facilities, such as heavy-duty cancer treatments. Such drugs are paid for by Medicare Part B, not Part D, which relates to prescription drugs.
Currently, Medicare Part B pays providers the average sales price of the drug plus 6 percent. Now, it will instead pay providers the average sales price plus 2.5 percent, along with a flat fee of $16.80.
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