Medicare providers and drug companies aren’t just going to roll over and see their payments cut.
After the Centers for Medicare and Medicaid Services floated a new formula for paying hospitals and doctors for drugs administered to patients in outpatient care, major groups representing the pharmaceutical industry and medical providers made their objections loud and clear.
Currently, Medicare pays providers the average sales price of a drug plus 6 percent. CMS has proposed changing the formula to the average sales price plus 2.5 percent and a flat fee of $16.50.
About 28 percent of the $457 billion Medicare spent last year was on drugs administered by hospitals or other providers, including transfusions for serious conditions, such as cancer.
“It’s insulting. It’s really infuriating,” Dr. Robin Zon, chair of the finance committee at Michiana Hematology-Oncology P.C. in South Bend, Indiana, said to the Wall Street Journal. “This is an experiment, and it’s an experiment that will affect lives. I am so afraid this will do more harm than good.”
Pharmaceutical Research and Manufacturers of America denounced the proposal immediately, saying that it was a threat to patients and was crafted without valuable input from stakeholders.
Interestingly, even Republicans in Congress, who have for years urged for ways to save money on Medicare, also decried the proposal.
“Yesterday’s announcement marks another troubling example of unelected bureaucrats making decisions behind closed doors that impact the American people and their health care,” said Republicans Sen. Orrin Hatch, Rep. Kevin Brady, and Rep. Fred Upton in a statement.
Dr. Patrick Conway, the CMS’ chief medical officer, defended the proposal, saying that it would in no way hamstring doctors.
“Nothing in this proposed payment model will prevent doctors from prescribing exactly the treatment they think their patient needs,” he told reporters Tuesday.
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