MedPAC discusses Part B reforms, MACRA: 6 takeaways

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The Medicare Payment Advisory Commission held a public meeting March 3, where commissioners discussed recommendations to reduce growth in Part B drug spending and ways to help physicians transition from Medicare’s Merit-based Incentive Payment System to Advanced Alternative Payment Models.

Here are six takeaways from MedPAC’s discussion.

1. Commissioners addressed the chairman’s many proposals for reforming Medicare Part B, which covers prescription drugs administered in a physician’s officer or hospital outpatient department. The proposals call for modifying the reimbursement for Part B drugs that are paid for based on wholesale acquisition cost — a manufacturer’s undiscounted price to wholesalers or direct purchasers. Under the proposals, the payment rate for WAC-priced drugs would be reduced to WAC plus 3 percent, down from the current rate of WAC plus 6 percent.

2. Under the proposals, all Part B drug manufacturers would be required to submit annual average sales price data. Currently, only Medicare Part B drug manufacturers with Medicaid drug rebate agreements are required to submit annual average sales price data. The proposals would also increase the penalties for not reporting.

3. For drugs that are paid for based on average sales price, physicians and hospital outpatient departments are typically paid the ASP of a drug, plus a 6 percent add-on. The proposals would require manufacturers to pay Medicare a rebate with the ASP for their product if it exceeds an inflation benchmark such as the consumer price index.

4. The Medicare Access and CHIP Reauthorization Act established two pathways for clinician participation: the Merit-based Incentive Payment System, or MIPS, and the Advanced Alternative Payment Models, or Advanced APMs. To help move clinicians from MIPs to Advanced APMs, the commissioners discussed limiting the potential upside in MIPS.

5. The commissioners also discussed proposals that would make Advanced APMs more attractive to clinicians, including creating an additional upside for two-sided ACOs.

6. MedPAC will vote on the proposals next month for possible inclusion in the commission’s June report to Congress.

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