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MedPAC Recommends New Part B Pricing System

By MedPage Today  
   April 07, 2017

Limiting payment rate increases for drug payments based on ASP. Currently, physicians are paid for administering certain drugs at a rate of ASP plus 6%, but there is no limit on how much those payments can increase over time; staff members noted at a commission meeting in March that between January 2010 and January 2017, nine of the top 20 highest-expenditure drugs had annual ASP growth of 5% or more. Under the proposal, manufacturers would have to pay a rebate if their products' ASP exceeded a particular inflation benchmark, such as the consumer price index.

Instituting consolidated billing codes for biosimilar drugs. Currently, brand-name drugs and their generic counterparts are paid under a single billing code; the proposed policy would require reference biologics and their biosimilars also to be paid under a single code. The Health and Human Services Secretary also might consider use of a consolidated billing code for groups of products with similar health effects, commission staff member Nancy Ray said at the March meeting.

To make it more attractive for physicians to transfer to the DVP, the ASP add-on percentage would be cut. If implemented, the recommendation would decrease spending by an estimated $250-$750 million in the first year and $1 billion to $5 billion over 5 years, according to commission staff.

One concern with the DVP is how sensitive providers might be to changes in the drug formulary, manufacturer, or price that might come as a result, said commission member Alice Coombs, MD, a critical care specialist at Milton Hospital in Weymouth, Mass. However, she added, "the golden nugget [of this] is the inflation rebate."

"I've got some parts I'm more optimistic about than others," said commission member Jack Hoadley, PhD, of Georgetown University here. "I'm skeptical about some aspects of the DVP, [although] it's grown on me a bit over the discussions -- it's definitely something worth trying."

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