CMS official hints at changes to Medicare drug proposal

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The Obama administration is considering changes to a divisive proposal aimed at reducing drug payments under Medicare Part B, according to testimony from a senior health official within the administration.

Facing pushback from lawmakers during a Senate Finance Committee hearing on Tuesday, Patrick Conway, M.D., acting principle deputy administrator for the Centers for Medicare & Medicaid Services (CMS) testified that the agency was reviewing more than 1,300 stakeholder comments to “determine whether adjustments are needed” to the proposed drug payment changes announced in March. The demonstration project would restructure Medicare Part B reimbursement to incentivize physicians to select lower-cost, higher-performing drugs. Conway has previously stated that CMS is open to adjusting parts of the proposal.

Although he declined to say what specific adjustments would be made in the final rule, Conway noted that pilot project intends to remove the “disincentive” that often exists for physicians to prescribe lower cost drugs while also ensuring access to medication remains a top priority. Despite direct questions from lawmakers, Conway offered no indication CMS would scrap the demonstration project altogether.

Committee chairman Sen. Orrin Hatch (R-Utah) repeatedly blasted the Obama administration’s proposal, calling it “ill-conceived and likely to harm beneficiaries.” He added that the pilot goes beyond the statutory authority of CMS, and pointed to widespread criticism the policy drew from industry stakeholders. Sen. Chuck Grassley (R-Iowa) wondered whether the proposal “constitutes human-subject research,” and pressed Conway on how the rule would impact small rural practices and beneficiaries with rare diseases. On the other side of the aisle, Sen. Ron Wyden (D-OR) said it was important to evaluate the proposal, but noted that “too many seniors are getting pounded by prescription drug bills.”

Lawmakers, providers, and Obama administration officials have drawn distinct battle lines following the announcement of the rule. An analysis revealed the project would have the biggest impact on specialists that use costlier drugs with no cheaper alternatives.

- watch the Senate Finance Committee hearing
- here’s Patrick Conway’s testimony