The Obama administration says it might overhaul how it pays doctors and hospitals for drugs they administer under Medicare Part B, arguing the reforms are needed to put patients before dollars and cents.
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 has 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, said Dr. Patrick Conway, chief medical officer at the Centers for Medicare and Medicaid Services.
“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 said.
The administration said it wants to test a new payment structure in select parts of the country, while leaving other areas alone to serve as a control group.
Under the proposal, providers would receive 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 is budget-neutral and fits into its broader efforts to put the quality of care over how many services doctors provide.
It was crafted with input from an array of medical experts and associations, although it may be revised after a public comment period.
Dr. Conway said they want start the testing by late 2016.
In 2015, Medicare Part B spent $20 billion on outpatient drugs administered by physicians and hospital outpatient departments, the administration reported Tuesday.
Prescription drug spending in the U.S. was about $457 billion in 2015, or 16.7 percent of overall health spending.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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