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MedPAC Recommends New Part B Pricing System

By MedPage Today  
   April 07, 2017

The move would transition physicians away from current 'ASP plus 6%' formula. From MedPage Today.

This article first appeared April 6, 2017 on MedPage Today.

By Joyce Frieden

WASHINGTON -- The Medicare Payment Advisory Commission (MedPAC) voted unanimously Thursday to recommend a competitive pricing program and make other changes to reimbursement for drugs under Part B of the Medicare program.

"Medicare, as a large third-party payer, always needs to take steps to make sure it's paying the right amount," said commission member Paul Ginsburg, PhD, of the Brookings Institution, a left-leaning think tank here. "I'm particularly excited [about the pricing program] -- it's not often we have the opportunity to foster competition in areas important to Medicare."

Under the Drug Value Program (DVP) -- which would be voluntary for physicians -- a small number of vendors would negotiate prices being paid for the drugs, but those vendors would not be the ones shipping the product. Providers would then buy the drugs at the vendor-negotiated rate, and Medicare would pay providers that rate plus an administration fee based on either the physician fee schedule or the outpatient prospective payment system. Providers also would have a chance to share in any cost savings generated by the DVP program.

The recommendation also includes several other changes to the reimbursement model for drugs paid for under Part B, which are those administered in the physician's office:

Improving average sales price (ASP) data reporting. Currently, only drugmakers who have rebate arrangements with Medicaid are required to report ASP data. Under the proposal, all manufacturers of drugs covered under Part B would have to report the data, and penalties for not reporting would be increased.

Modifying the payment rate for drugs that are paid for based on wholesale acquisition cost (WAC). Currently, some drugs are paid for at WAC plus 6%; the proposal would reduce the rate to WAC plus 3%.


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