Protect Medicare Part B for America’s seniors

Changes to our nation’s healthcare system continue to dominate the headlines as lawmakers in Congress remain at odds about the prospect of repealing and replacing the Affordable Care Act.  However, as reporters fixate on day-to-day developments on Capitol Hill, other critically important healthcare programs fly under the radar, including Medicare Part B.

Part B is a central branch of Medicare, which covers a range of services including routine physician visits, clinical lab services and physical therapy. Surprisingly to many, the program also covers a small subset of complex medicines used to treat patients with severe conditions, including rheumatoid arthritis, lupus, spondyloarthritis, psoriatic arthritis and other debilitating diseases.

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Last year, the previous administration proposed a mandatory Medicare Part B Drug Payment Model, which would slash reimbursement for medicines administered in the physician office setting. This experiment on senior care would put patients at tremendous risk, potentially forcing them to abandon treatments based upon zip codes rather than trust their physician’s judgment.

Thankfully, due to strong opposition from patients, physicians and a bipartisan group of lawmakers, the proposed demonstration was not finalized by the Obama administration. It is now incumbent upon the new administration to formally withdrawal this proposed experiment on seniors’ healthcare. 

Recently, the American College of Rheumatology joined 268 concerned organizations in sending a letter to HHS Secretary Tom Price, MD, warning against changes to Medicare Part B, including the proposed Medicare Part B Drug Payment Model.

Additional threats to Part B also place the program and its beneficiaries at risk.  This April, the Medicare Payment Advisory Commission (MedPAC) approved reforms that would diminish patient access, drive healthcare consolidation and potentially increase costs for seniors. If MedPAC’s policies are adopted, it could make it more difficult for physicians – particularly those in small practices and rural settings – to administer medically necessary treatments in the communities they serve.  

Consider just two reforms currently on the table. First, MedPAC would disrupt Part B’s long-standing, truly successful payment formula. Currently, medicines are reimbursed at their average sales price (ASP) plus a six percent add-on payment. The equation helps practices cover the overhead costs associated with maintaining a consistent inventory of complex medicines. While the six percent figure has already dropped as a result of budget sequester, MedPAC would lower the rate even further.

Second, MedPAC wouldn’t allow reimbursement to move in tandem with drug prices. Currently, fluctuations in ASP are captured through quarterly updates to the payment rate. MedPAC’s proposal, however, would set a benchmark for how much ASP can rise over time. If ASP grew more quickly than the benchmark, manufacturers would be on the hook for any added expenses.

As a rheumatologist, I am deeply concerned that cuts to the Medicare Part B program will lead to the demise of physician office and community-based care, especially in rural America.  As a result, elderly Americans would have to seek care in a hospital, which may require traveling a longer distance to receive care and would result in higher out of pocket costs. Changes to payment structures could also necessitate altering treatment plans that are currently working well for patients, creating potentially unnecessary and damaging gaps in care.

Current Part B payment methodology seeks to balance cost controls with access to highly specialized medicines for some of the sickest and most vulnerable beneficiaries in the Medicare program. MedPAC’s recommendations, however, slash expenditures regardless of the patient impact.  

In the end, it is the responsibility of the administration and Congress to protect the Medicare Part B program and the millions of beneficiaries it serves. Together, we must find ways to preserve what’s working in American healthcare and protect the most vulnerable among us. 

Sharad Lakhanpal, MBBS, MD is president of the American College of Rheumatology (ACR).


The views expressed by this author are their own and are not the views of The Hill.