WASHINGTON, DC — AARP supports The Centers for Medicare & Medicaid Services’ (CMS) demonstration project that modifies how Medicare pays for certain prescription drugs administered by physicians and other clinicians. The goal of the five-year project is to determine whether alternative payment approaches will lead to better value and higher quality care for patients.
“Last year Medicare Part B spent $22 billion on prescription drugs, double the amount spent in 2007,” saidNancy LeaMond, Chief Advocacy & Engagement Officer at AARP. “This spending escalation is simply unsustainable. We cannot continue to ask taxpayers and Medicare beneficiaries to pay for exorbitantly priced prescription drugs without any consideration of whether their money is being well-spent.”
Currently, Medicare Part B pays providers based on a drug’s average sales price plus an additional 6%. The proposal will change this add-on payment to 2.5% plus a flat fee of $16.80. CMS also plans to implement value-based purchasing—or paying for drugs based on how well they work—for a limited number of prescription drugs. CMS hopes that these changes will improve how Medicare Part B pays for prescription drugs, as well as support physicians and other clinicians in delivering higher quality care.
“This project is a thoughtful, measured approach to modernizing the way that Medicare pays for what are often incredibly expensive drugs,” said LeaMond. “Many of the changes that CMS is considering in this demonstration project are already being used in the private sector.”
CMS’s proposal includes multiple opportunities for public input, adds a new exceptions process that will allow providers and Medicare beneficiaries to obtain medically-necessary drugs, and will keep beneficiary cost-sharing responsibilities the same with the option of reducing or waiving them entirely. The demonstration will last for five years and does not reflect a permanent change to the Medicare program. Also, the proposed model will not prevent doctors from prescribing the drugs that they believe their patients need.
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Greg Phillips, 202-434-2560, firstname.lastname@example.org, @AARPMedia