Obama official willing to change controversial Medicare proposal

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The Obama administration is willing to work to address congressional concerns with a proposal aimed at fighting high drug prices, a top health official said Wednesday. 

The administration’s proposal to change how Medicare pays for certain drugs has drawn objections from both sides of the aisle. Republicans want it to be completely scrapped, while Democrats have expressed serious reservations and called for changes.

{mosads}“We will interact with Congress, take feedback and make adjustments as needed,” Dr. Patrick Conway, the No. 2 official at the Centers for Medicare and Medicaid Services (CMS), said at an Alliance for Health reform event. 

He specifically mentioned openness to changes on two fronts that have been raised by lawmakers in both parties: making the proposal apply only to a smaller geographic area and making sure the proposal does not have a harmful effect on rural or smaller providers. 

“Should the geographic scope be adjusted?” he said was one question to look at. 

Conway noted that “certainly [there are] concerns about smaller practices or rural practices, so we’ll have to look at that and consider: Do we need to make adjustments?”

He also said the timeline for implementing the changes could be slowed. 

At issue is a five-year pilot program that would change the way Medicare Part B pays for drugs. 

Currently, Medicare pays doctors the average price of a drug plus 6 percent. The administration argues the system gives doctors an incentive to prescribe higher cost drugs so that they get paid more. The pilot program would reduce the 6 percent add-on to 2.5 percent plus a flat fee of about $16. 

Some fear the program could harm patients by limiting their access to treatments if doctors’ costs to acquire drugs become higher than the reimbursement amount from Medicare, particularly in rural areas. 

Every Democrat on the Senate Finance Committee signed a letter last week expressing that worry, as well as others, and called for changes. 

Republicans, meanwhile, have called for the program to be scrapped altogether. 

Conway defended the direction overall. “We do think value-based work in the drug space is important,” he said. 

The administration has been sending out letters and newspaper editorials in support of its proposal in order to push back on criticism. 

“There is nothing in this proposed rule that limits access to any medication that we are aware of,” Conway said, adding that people should point to specifics if he is wrong about that in any area.

Speaking of the controversy, he said: “This is a complex area, so I’m not surprised by the amount of interest.


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