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

The 2019 Legislative Agenda

A new governor and many new legislators make 2019 a learning year as the state's top healthcare organizations seek to address a number of old issues and tweak some new solutions unveiled last year.

Read More

Updated Cholesterol Guidelines Take a Personalized Approach

The American Heart Association and American College of Cardiology released updated cholesterol clinical guidelines in November 2018, taking a more nuanced approach to care over a patient's lifetime.

Read More

Sharing Data, Saving Lives

In an increasingly connected medical ecosystem where patient safety, health status improvement, and provider reimbursement are impacted at every point along the continuum, the need to efficiently, securely share data appears to have reached a tipping point.

Read More

New Rules in Heart Disease

A number of guideline changes and updates warrant more education around statin use and blood pressure monitoring, but local cardiologists say the higher standards are a game changer.

Read More

Dr. Ashish Shah: A Heart for Transplant Patients

Dr. Ashish Shah is the driving force behind the growth and innovation at one of the nation's busiest heart transplant programs.

Read More

Heart Monitor

Cardiovascular news of note.

Read More

ECMO Program Thriving at TriStar Centennial

A TriStar Centennial, a team approach is key to hospital's successful ECMO program.

Read More

Alexander Looks for Innovation, Asks Council Fellows for Input

Sen. Lamar Alexander asks stakeholders and future leaders to weigh in on ways to improve health outcomes, lower costs.

Read More

CMS Utilizes Dartboard Approach to Modernizing the Medicare Drug Benefit

Controlling pharmaceutical prices remains a hot topic, judging from the 6,415 comments received in response to the CMS proposed rule: "Modernizing Part D and Medicare Advantage to Lower Drug Prices and Reduce Out-of-Pocket Expenses."

Read More

A Conversation with LHC Director Molly Vice

Every company should have a succession plan. LHC plays a key role in planning for the next generation of leaders for an entire industry.

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: