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CMS Announces End to Medicare Part B Drug Payment Model

On December 15, 2016, the Centers for Medicare and Medicaid Services (CMS) announced the cancellation of Medicare Part B Drug Payment Model. CMS initially proposed the demonstration on March 8, 2016 to test new models in how physician-administered drugs are paid under the Medicare program.

In May 2016, ASH submitted comments on the proposed rule expressing concern that the demonstration could create barriers to access to important and life-saving drugs. Under the proposal, CMS would have adjusted the payment rate for individual drugs in the hopes to incentivize selection based on performance rather than price. However, ASH stressed that for hematology, there is often no choice in chemotherapeutic agents, and consequently, a change in the payment rate for individual drugs could make providing certain drugs more difficult for physician practices and hospitals. 

From the beginning, the proposed model was controversial, and received pushback from medical specialty societies, cancer groups, pharmaceutical companies and hospital organizations, among others. CMS indicated that the cancellation was in large part a result of the 1,300 public comments received, most of which were negative. ASH will continue to support innovation in delivery and payment models to help reduce the burden of the overall cost of medical care and particularly, the high cost of drugs, without compromising access to care.