Part B Demonstration Lacks Patient Monitoring Strategy, Says New Study

April 27, 2016

by Amanda Conschafter, blog editor

The Medicare Part B payment demonstration planned by the Centers for Medicare and Medicaid Services lacks a vital component: a clear strategy for monitoring the experiment’s effect on patient care. So argues a new policy brief from Discern Health.

A project of CMS’ Innovation Center, the pricing demonstration will explore whether value-based payment models can cut costs while maintaining care. But, as the policy brief notes, “Any policy initiative has the potential for both intended and unintended effects.” And unlike previous initiatives, CMS’ proposed rule on the Part B demonstration provides few details about how the agency will gauge patient impact.

CMMI’s Part B Pricing Demonstration

Under Medicare Part B, CMS pays for the average list price of an infused or injected drug plus a six percent payment. The six percent covers the physician’s expense of receiving, storing, tracking and preparing the medication for the patient.  The Part B demonstration would test new payment designs on roughly half of health care providers who receive Part B reimbursements.

In Phase 1, which could take effect as early as fall 2016, Medicare Part B would reduce reimbursement to cover the average list price plus 2.5 percent of the drug’s cost and a $16.85 flat payment. Starting in 2017, Phase 2 would introduce additional variables, testing payment concepts such as indication-based pricing, reference pricing, outcome-based pricing, and reduced or eliminated patient cost-sharing.

[Read: Medicare Part B Proposal Raises Patient Access Concerns]

Monitoring Patient and Provider Responses

As with any value-based payment model, the Part B demonstration could encourage physicians to avoid appropriate care when it entails high-cost or innovative medicines. Thus, CMMI needs a detailed strategy for assessing the demonstration’s impact – monitoring the short-term effects on beneficiaries and evaluating the long-term trends in prescribing patterns and patient outcomes.

CMMI has developed a series of questions to guide its evaluation of the program. Yet the plan does not, Discern Health argues, demonstrate the availability or commitment of resources needed to evaluate a program of this scope.

Meanwhile, CMS’ proposed rule offers few details about its plan to monitor near-term effects on patients. This lack of a near-term monitoring strategy, the policy brief notes, diverges from the approach taken with previous initiatives such as the Oncology Care Model. With that model, CMMI “provided details about their intent to audit providers through claims analyses, medical record reviews, coding audits, site visits, surveys, and complaint reviews, among other activities, to detect unintended consequences.”

To protect patients from unintended consequences, the brief concludes, CMMI must be better prepared to monitor the Part B demonstration’s impact on Medicare beneficiaries.

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