The PACT Coalition advocates for policies that preserve patient access to community-based care. Two contributing factors that are threatening access and need to be addressed legislatively are Medicare Part B reimbursement methodology and Sequestration.
Below you will find information on each of these issues and the legislative solutions that PACT supports.
Prompt Pay Discounts
Prompt pay discounts are negotiated agreements between manufacturers and health care distributors; distributors save the U.S. healthcare system $42 billion dollars annually through efficient prescription drug delivery systems and supply chain management.
The problem is that manufacturers are required to include these distributor prompt pay discounts in the calculation of Average Sales Price (ASP), which effectively reduces Medicare drug reimbursement for community providers who do not customarily receive these discounts. Congress acted to correct this flaw in the Medicaid program in the Deficit Reduction Act of 2005.
Beginning on April 1st 2013, Medicare provider reimbursement was cut 2% as mandated by the Budget Council Act of 2011. Medicare Part B Reimbursement, which accounts for physician-administered medications, is adversely affected; the 2% cut applies to both administrative costs and drug reimbursement. As a result, community-based providers reimbursed through Medicare Part B are effectively receiving a 35% reduction.
The reimbursement cut has resulted in community-based providers being reimbursed below cost for many drugs. According to a recent survey by the American Society of Clinical Oncology (ASCO), 80% of respondents said that the sequestration cuts have affected their practices. An alarming 50% reported that they have begun to send their Medicare patients elsewhere to receive chemotherapy. Another recent study estimates that sequestration cuts will actually increase Medicare spending by up to $600 million annually due to patients shifting form community clinics to more expensive hospital settings.
The Patient Impact
Policies that are exacerbating the shift in care delivery from the community setting to hospitals threaten access and increase costs for both patients and Medicare. A recent study found that chemotherapy costs per dose are 189% higher in the hospital outpatient setting compared to the oncologist’s office, costing patients $134 per dose received, leading to decreased access, reduced adherence, and increased total cost of care. Annually, Medicare beneficiaries face $650 more in out-of-pocket copayments for chemotherapy in the hospital setting than in community care settings; the difference costs Medicare approximately $6,500 more per year per patient.
How You Can Help
Please support H.R. 1920, which stabilizes reimbursement for Part B drugs and biologicals by excluding prompt pay discounts in the calculation of the average sales price (ASP) used to calculate payments to providers.
These legislative corrections will help preserve patient access to quality, affordable community-based care.
Find out what you can do to help!