A controversial demonstration project that would have tested new methods to pay for the drugs administered in medical offices has been canceled by the Centers for Medicare & Medicaid Services.
The agency received considerable backlash from physicians, Congress, and others when the demonstration project was announced in March 2016.
The agency said it received “a great deal of support from some” for the proposed demonstration. However, “a number of stakeholders expressed strong concerns about the model. While CMS was working to address these concerns, the complexity of the issues and the limited time available led to the decision not to finalize the rule at this time.”
The demonstration project was designed to test new methods to “improve how Medicare Part B pays for prescription drugs and supports physicians and other clinicians in delivering high quality care,” according to a fact sheet published in March.
Under the project, medical practices would have been divided into two groups. A control group would continue to be paid for Part B drugs at the current rate of 106% of average sales price (ASP), while the other would have been paid at 102.5% of ASP plus a flat fee of $16.80 per drug payment. Starting in January 2017, each group would have been further subdivided with a portion of each being subjected to value-based purchasing tools.
One key criticism of the demonstration project centered on the proposed randomization of practices, which was based on primary care service areas (clusters of zip codes with similar Part B medical care patterns). That randomization scheme could have caused different payment levels – and patient out-of-pocket spending – for geographically close areas. Further, participation in the demonstration project would have been mandatory, with no mechanism to opt out.
“This is a model for how Washington should, but often doesn’t, work,” American Medical Association President Andrew W. Gurman, MD, said in a statement. “We are grateful that CMS came to the right decision after listening to stakeholders.”
An analysis of the proposed demonstration project by Avalere found that specialists would likely see a decrease in their drug payments under the proposal, while primary care doctors would likely see an increase, and that 7 of the 10 drugs most affected by this proposal were drugs used to treat cancer.