I’m Lovin’ It: Utilization Not Tied to Reimbursement Rates in Part B

October 12, 2018
Last month, Xcenda released the results of research that tested the hypothesis that prescribers of Part B drugs disproportionately prescribe therapies with higher reimbursement rates to financially benefit from larger add-on payments. The Medicare Part B reimbursement methodology for covered drugs, average sales price (ASP) plus 6%, has been criticized for incentivizing physicians to prescribe medications based on maximizing profit potential, since the 6% “add-on” payment increases as the Medicare payment amount for the drug increases. The physician community counters this argument by asserting that medicines are not often interchangeable, and their prescribing is guided by best available evidence on the safety and effectiveness of medicines and patient needs.

On behalf of the Part B Access for Seniors and Physicians Coalition, Xcenda analyzed claims data for Medicare Part B fee-for-service beneficiaries receiving physician-administered drugs for rheumatoid arthritis (RA), breast cancer (BC), and non-small cell lung cancer (NSCLC) in the office setting.

Xcenda found no meaningful correlation between drug payment and utilization. The payment rates of RA, BC, and NSCLC drugs only contributed 5%, 1%, and 1% of the variation in utilization, respectively. In other words, the lack of a strong, positive correlation between drug payment and utilization suggests that physician prescribing is not driven by payment per drug administration.

These findings are particularly important now, as the Trump Administration is considering actions that would materially affect the Part B architecture of drug payment, such as reintroducing a Competitive Acquisition Program and shifting some or all Part B drugs to the Part D program. Policy makers should evaluate the payment and utilization relationship as they consider reforms; such changes may not secure savings but place patients and providers in turmoil and lead to treatment delays and adverse health consequences. 
Read the report to learn more.

Health Policy Weekly is written by Xcenda, a consultancy and business unit of AmerisourceBergen Specialty Group. Visit Xcenda’s online archive to access more health policy news.

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