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CMS Releases Proposal to Cut Medicare Part B Drug Costs

Late this week, CMS released a proposal to reduce the cost of Medicare Part B Drugs. The proposal would create an International Drug Pricing Index under which CMS would pay for some medications based on the price paid in other countries. The program would be phased in over 5 years to apply to fifty percent of the country and most Part B drugs.

According to CMS, the proposal is expected to save the federal government 30% in annual Medicare spending for included drugs. The proposal is an advanced notice of proposed rulemaking. The rulemaking is expected to begin in Spring 2019 and the final proposal is not expected until Spring 2020.
Additionally, the proposal includes to change the 4.3% add-on payment for the hospital or physician to a flat payment not based on the cost of the drug. This would allow private vendors to procure drugs, distribute them to physicians and hospitals, and take on the responsibility of billing Medicare.
The proposal indicates that the 340B program will be impacted. NRHA is reviewing the proposal to determine the potential impact on rural hospitals utilizing the 340B program to provide necessary care in their communities.

CMS has been receptive to NRHA’s comments on the importance of the 340B program when presented with examples of the important care rural hospitals are able to provide as a result of the program. Since this proposal is not yet complete and CMS is soliciting input, NOW is the time to share your story with NRHA to ensure that CMS understands the important care that the 340B Program makes possible in rural America.
President Trump unveiled the concept in a speech at HHS yesterday. This proposal follows the release of a report comparing the prices paid for drugs in the United States and other nations. According to the report, the United States pays 1.8 times more for top Medicare Part B drugs. Of the countries studied, the United States often paid the most for each of these drugs.
NRHA is continuing to review and will post a more detailed review of the proposal. Comments are due December 31.

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