Senators Criticize Medicare Part B Drug Proposal

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By Michael D. Williamson

June 28 — Senate Republicans and Democrats June 28 criticized a Medicare proposal intended to save money on drugs administered in doctors' offices and hospital outpatient departments.

Finance Committee Chairman Orrin Hatch (R-Utah) and ranking member Ron Wyden (D-Ore.) underscored the need to protect patients and small and rural providers as the committee held a hearing to examine a March proposed rule (81 Fed. Reg. 13,230; CMS-1670-P) aimed at reducing costs for Part B drugs.

“Protecting access is a big issue in rural areas where seniors today are often facing fewer choices and lower quality of care,” Wyden said. “And it’s extremely important that the project not result in patients being told that they have to go get treatment at the hospital, where treatment is typically more costly and less convenient.”

Patrick Conway, the CMS acting principal deputy administrator, defended the agency's rationale for the proposed model.

The Centers for Medicare & Medicaid Services proposed the model to help improve patient care and the value of Medicare drug spending, Conway said. The agency is analyzing comments and determining if any changes should be made, Conway told the committee.

The hearing represents the latest congressional backlash against the proposal. In April, all of the Republican members of the Finance Committee urged the CMS to scrap the model entirely, a move echoed by dozens of House Republicans in May (85 HCDR, 5/3/16). Some Democrats in Congress have called for changes to the proposed rule, but haven't gone as far as calling for its withdrawal (96 HCDR, 5/18/16).

Under the model, the CMS would test six approaches for paying for Part B drugs, such as cancer medications. In 2015, Medicare Part B spent $20 billion on outpatient drugs administered by physicians and hospital outpatient departments. In 2007, Medicare paid $11 billion for Part B drugs, and the average annual increase since then has been 8.6 percent, Conway said.

This significant growth has largely been driven by spending on drugs in the hospital outpatient setting, which more than doubled between 2007 and 2015, from $3 billion to $8 billion respectively, he told the committee.


However, Conway didn't present any new data at the hearing to show the proposed model would bring down drug costs, Ted Okon, the executive director of the Community Oncology Alliance, a group representing community oncology practices, told Bloomberg BNA June 28.

It is odd that the CMS came to Capitol Hill without offering any new data to defend its proposal, Okon said, adding that, to date, the agency hasn't presented any information about how the model would affect costs.

Even if the agency changes the rule, it will still disadvantage seniors, Okon said.

He said the agency should scrap the model and meet with drugmakers and providers to set up a reasonable approach that would truly look to solve quality and value issues.

Comments, which were due in May, showed that the Community Oncology Alliance and other oncology organizations want the CMS to pull the rule (91 HCDR, 5/11/16).

Before the comment deadline, Finance Committee Republicans and some of their House colleagues also asked that the agency withdraw the rule (85 HCDR, 5/3/16).

Scope Questioned

The proposed experiment would require providers in the vast majority of the country to participate in a least one dramatic payment change, Finance Committee Republicans told the CMS in their April letter.

However, some have asked why the CMS proposed “such a large, expansive demonstration,” Sen. Tom Carper (D-Del.) said at the hearing.

The model is a proposal, and the CMS sought comments about its scope and is analyzing that feedback, Conway said. Part of the reason why the CMS proposed such an expansive pilot project is because the agency will need enough data to evaluate the model's results once it is live, he told committee members.

To contact the reporter on this story: Michael D. Williamson in Washington at

To contact the editor responsible for this story: Brian Broderick at

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