Battle lines drawn over new drug payment model

Lawmakers, physicians and patient advocates voiced a wide range of reactions to the Obama administration's proposed drug reimbursement model in a House subcommittee hearing on Tuesday, with some arguing the demonstration project should be scrapped entirely and others advocating for slight tweaks to address provider concerns.

In March, the federal government announced a new program aimed at reducing drug prices that would slash the add-on fee that Medicare pays providers while also testing other value-based payment models. Shortly after, members of the Senate voiced similar disagreements regarding the efficacy of the new policy.

In Tuesday's hearing, Health Subcommittee Chairman Joseph Pitts (R-Penn.) argued the proposed changes to the Part B program "could result in grave consequences for our seniors" by testing "vague value-based purchasing agreements." Energy and Commerce Chairman Fred Upton (R-Mich.) said the policy would disrupt existing Medicare models while "setting a dangerous precedent" for future healthcare policy changes.

On the other side of the aisle, Rep. Gene Green (D-Texas) acknowledged that the proposal has raised legitimate concerns from the healthcare community, but urged lawmakers to look at the proposal with "calm and reason," rather than outright rejection. Rep. Lois Capps (D-Calif.) added that despite widespread reforms to healthcare payments, pharmaceutical companies continue to "charge Medicare anything they want for their products," which underscores the need for new payment methodologies.

"We would never accept that from any other entity in our healthcare system and we should no longer accept it from pharma," she said.

Patients and providers were equally divided, particularly regarding the impact the program could have on oncology drugs, which are among the specialty drugs expected to raise 23 percent his year. Debra Patt M.D., vice president of Texas Oncology and medical director of the U.S. Oncology Network testified that the structure of the new payment model would be "devastating to the advancements made in our continued fight against cancer," and predicted oncology prices would actually increase, while limiting the ability for oncologists to provide cutting-edge treatments. Meanwhile, patient advocate Heather Block pointed to flaws in the current system, testifying that she pays a 20 percent co-pay for "exceedingly expensive" cancer medication.

Acknowledging the concerns voiced by drug manufacturers and cancer doctors, Patrick Conway, chief medical officer and principal deputy administrator at the Centers for Medicare & Medicaid Services has expressed a willingness to alter parts of the proposed demonstration project.

For more:
- watch the hearing
- here's Joseph Pitts' statement
- read Fred Upton's opening statement
- see Debra Patt's testimony
- read Heather Block's testimony

Related Articles:
Senators push CMS to rethink Medicare Part B payment proposal
Patrick Conway: CMS open to Medicare Part B proposal changes
Critics push back against new Medicare Part B payment proposals
Feds to test new Medicare Part B payment models
Survey: Specialty drug costs could rise 23% next year

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