Archives     Advertise     Editorial Calendar     Subscribe     Contact Us    


HHS Advances Payment Model to Lower Drug Costs


 

In late October, the U.S. Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (CMS), announced and sought input on a new "International Pricing Index" (IPI) payment model to reduce what Americans pay for prescription drugs.

Under the IPI model, described in an Advance Notice of Proposed Rulemaking (ANPRM), Medicare's payments for select physician-administered drugs would shift to a level more closely aligned with prices in other countries. Overall savings for American taxpayers and patients are projected to total $17.2 billion over five years.

"In an era where the pharmaceutical industry is pricing drugs at levels approaching a million dollars -- and jeopardizing the future of our safety net programs -- the time has come to fix the perverse incentives in the Medicare program that are fueling price increases," said CMS Administrator Seema Verma.

The move from current payment levels to payment levels based on international prices would be phased in over a five-year period, would apply to 50 percent of the country, and would cover most drugs in Medicare Part B, which includes physician-administered medicines such as infusions. The model purports to "correct existing incentives to prescribe higher-priced drugs and, for the first time, address disparities in prices between the United States and other countries." Since patient cost sharing is calculated based on Medicare's payment amount, patients should see lower costs under the model.

For the first time in Medicare, the IPI model would create a system in which private vendors procure drugs, distribute them to physicians and hospitals, and take on the responsibility of billing Medicare. The plan is that vendors would aggregate purchasing, seek volume-based discounts, and compete for providers' business, thereby creating competition where none exists today. Under the model, instead of the current percentage-based add-on payment, physicians and hospitals would receive a set payment amount for storing and handling drugs that would not be tied to drug prices to remove any financial incentive to prescribe higher-cost drugs.

AMA President Barbara L. McAneny, MD, responded to the proposed rule with the following statement: "Physicians share their patients' concerns with the high cost of prescription drugs. We appreciate that the Trump Administration is working to address this important issue. The Administration's proposal for an International Pricing Index Model for Part B drugs raises a number of questions, and we need to have a greater understanding of the potential impact of the proposal on patients, physicians, and the health care system. We look forward to working constructively with the Administration as it seeks feedback."

TAGS:

WEB:

IPI Policy Brief

Fact Sheet

Comments

 
Share:

Related Articles:


Recent Articles

VUMC Joins International Effort to Speed Vaccine Development

Vanderbilt University Medical Center (VUMC) has joined an international effort to streamline and accelerate development of vaccines and other treatments against a growing worldwide surge of deadly and debilitating viral infections.

Read More

U.S. Senator Lamar Alexander on legislation he introduced this week to lower the cost of health care

There's one question I hear almost every day from Tennesseans, and it is, "What are you doing to lower the cost I pay for health care?"

Read More

So excited to spend the morning celebrating the Women to Watch Class of 2019

Read More

Alexander: Bipartisan Legislation Will Lower What Americans Pay Out of Their Own Pockets for Health Care

The Lower Health Care Costs Act of 2019 contains nearly three dozen proposals from at least 16 Republican, 14 Democrat senators

Read More

If You Build It, They Will Come

Middle Tennessee's healthcare options continue to expand through new construction and facility renovations and additions.

Read More

Lease, Build, Buy, Sell: Finding the Best Fit for Each Medical Practice

When it comes to medical real estate, there is no one 'right' answer for every practice. Instead, experts say it's important to understand all the options before making a decision that impacts individual physicians, the practice ... and ultimately, patients.

Read More

Dr. Jerry Tannenbaum: Redefining, Redesigning Nephrology

Innovative building models and telemedicine mean better care for patients nationwide.

Read More

Wayfinding in Healthcare

With expansions, renovations and additions to healthcare facilities over time, the ability to easily navigate a campus is often lost along the way. Taking time to consider wayfinding can vastly improve the way patients, visitors and staff engage with the environment.

Read More

Building Walls

Steve Ward & Associates prefab headwalls mean more savings, options for healthcare clients.

Read More

LipiFlow®: Advanced Procedure to Treat Meibomian Gland Dysfunction & Chronic Dry Eye

In-office procedure can promote eyelid health and provide relief from dry eye.

Read More

Email Print
 
 

 

 


Tags:
CMS, HHS, International Pricing Index, IPI, Medicare, Medicare Part B, Prescription Drugs, Seema Verma
Powered by Bondware
News Publishing Software

The browser you are using is outdated!

You may not be getting all you can out of your browsing experience
and may be open to security risks!

Consider upgrading to the latest version of your browser or choose on below: