Physician-administered Drugs: Comparison of Payer Payment Methodologies
Abstract
In 2014, Medicare spent over $24 billion on drugs covered under Part B, which are drugs that are typically administered by a physician in a physicians office or hospital outpatientdepartment.1 Medicare pays for most Part B drugs based on the average sales price (ASP) of the drug plus a fixed percentage.2 Some stakeholders have raised questions regarding whether the fixed percentage add-on to ASP may create incentives for providers to use more expensive drugs. However, other stakeholders have suggested that any incentive to use more expensive drugs to maximize subsequent reimbursement may be offset by providers expenses associated with acquiring such drugs. In March 2016, the Centers for Medicare and Medicaid Services (CMS)released a proposed rule that outlined the agencys plan to test various models to improve how Medicare pays for Part B drugs and to support higher-quality care.3 Some members of Congress and other stakeholders have raised questions about some of the proposed models and expressed interest in approaches used by other payers for physician-administered drugs.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 01, 2016
- Accession Number
- AD1173661
Entities
People
- James Cosgrove
Organizations
- United States Government Accountability Office