CMS Details Changes to Reimbursements for Medicare Part B Drugs
CMS on Friday released details on changes to the system under which Medicare pays for medications administered to beneficiaries under Part B, CQ HealthBeat reports. Under the current system, Medicare reimburses doctors for such drugs based on the average wholesale price reported by pharmaceutical companies. Critics said that under the system, doctors pay "far lower market prices for the drugs" and then "pocke[t] the difference" between those prices and the AWP, CQ HealthBeat reports.
In an effort to address the issue, lawmakers included in the new Medicare law two changes to the system. Under one change, reimbursement would be based on average sales prices, which are "more reflective of actual market conditions," according to CQ HealthBeat. The other change is the creation of an optional competitive acquisition program for physicians, which is set to begin Jan. 1, 2006. According to Friday's announcement, the new option would allow doctors to order drugs from a vendor in the CAP program, which then would bill Medicare for the drugs and collect copays and deductibles from beneficiaries. Doctors would continue to be paid for administering the drugs. Vendors would bid for contracts under the system.
In the proposal for the system, to be published in the March 4 Federal Register, CMS will hear comments on which categories of drugs should be established for bidding purposes. CMS proposes selecting up to the five lowest bidders for a drug category in each bidding area. The proposal also invites comments on how bidding regions should be defined -- nationally, regionally or statewide. CMS Administrator Mark McClellan said the competitive bidding system will save taxpayers money while easing paperwork and billing problems for doctors (CQ HealthBeat, 2/25).
Daniel Altman in his "Economic View" column in the New York Times on Sunday proposed controlling rising Medicare costs in part by making changes to how CMS covers end-of-life care. The fundamental question, according to Altman, is "how can you identify end-of-life care, especially the kind that's likely to be of little value?"
David Meltzer, an associate professor of medicine at the University of Chicago, recommended that doctors prepare families and patients for less costly and intensive care at the end of life, even though the inclination might be to do everything possible to save a patient, according to Altman. Meltzer said that health care providers could accomplish this goal by "explain[ing] to people that the goal of medical care is not always to make people live longer." Gail Wilensky, a senior fellow at Project Hope, said better coordination of care within hospitals and with other providers could reduce extra efforts, adding that more use of evidence-based medicine also could discourage physicians from pursuing treatments that have little chance of success, Altman says.
He writes that other solutions include the introduction of more "gatekeepers" of care -- an option that would be unpopular with the public, according to experts -- or encouraging severely ill patients to choose hospice care instead of intensive medical care. Altman concludes by citing Meltzer's contention that more research into changing how providers address end-of-life care and how Medicare covers such care must be conducted (Altman, New York Times, 2/27).