Cutting Medicare's In-Office Drug Spending: If At First You Don't Succeed...


No one said it would be a cinch reducing a mammoth taxpayer subsidized drug benefit.

The Medicare Part B benefit pays for drugs administered in doctors’ offices and outpatient facilities. It weighed in at $26 billion in 2015 and is growing at 9 percent a year.

Last year, the Medicare agency got clobbered with objections from thousands of interest groups and beneficiaries when it proposed a multifaceted demonstration from its innovation center to test alternative drug payment structures.

It eventually withdrew the demo from consideration. The withdrawal was one of the few things Republicans and Democrats agreed on last year.

Congress’ Medicare advisers—the Medicare Payment Advisory Commission (MedPAC)—has taken up the issue throughout the years.

Now MedPAC is at it again, molding a package of recommendations. The centerpiece is an option to get lower-priced drugs from private vendors, called the Drug Value Program.

However, an earlier vendor program, called the Competitive Acquisition Program, or CAP, fizzled in 2008 for lack of interest and/or skittishness from vendors and doctors. Just one vendor participated.

The new program would be informed by lessons learned from CAP—structured to increase vendors' negotiating power and give providers shared savings, MedPAC said.

The commissioners’ game plan is to hash out the recommendations in March, vote in April, and present them to Congress in June.

It’s uncertain how the new Congress will receive the final recommendations.

MedPAC’s recommendations on revamping the prescription-based outpatient Part D drug benefit approved last spring have so far been snubbed.

But one thing is for certain: Interest groups like drugmakers, beneficiary advocates, and cancer centers, will fight like lions against any Part B revamping they don’t regard as in their best interest.

Read more on MedPAC’s latest ideas here.

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