Tying Medicare Part B Drug Prices to International Reference Pricing Will Devastate R&D.

According to Secretary Azar of Health and Human Services, implementing international reference pricing (IPI) in Medicare Part B will have minimal impacts. He has stated, "These savings, while substantial for American patients and taxpayers, cannot possibly pull out more than 1 percent of R&D." As companies traditionally spend 20% of free cash flow on R&D, we have measured the IPI impact according to industry standard metrics. The potential negative impacts of the international reference pricing plan, as it is currently structured, are numerous. Companies are likely to avoid developing Medicare Bart B physician-administered drugs in the future if it comes to fruition. Further, if distributing in any of the included countries in the benchmarking exercise that traditionally have prices far below that of the United States has the impact of creating lower US prices where the industry currently derives more than 80% of their global profit, companies will simply not seek market access in those benchmarked countries and patients in those countries will not receive the medicines they need. The idea that companies will be able to unilaterally raise prices in Europe defies logic and practice. Many countries in the EU have been threatening IP rights under the TRIPS clauses of the WTO for several years because of their belief that pharmaceutical pricing is unacceptably high right now, without the IPI. Harnessing real-world evidence would allow for increased competition by faster time to market. One wonders why an approach encompassing the improved time to market was not considered, as the reference pricing proposal as it stands now, ultimately, will reduce R&D budgets, impair the overall investment climate, and deprive patients the new medicines.

Medicare Part B Intensity and Volume Offset.

Under Medicare Part B, adjustments to the fee schedule are made under the assumption that physicians and hospitals make up for fee reductions through increased service provision called 'volume offsetting'. While historically, researchers have found evidence of volume offsetting, more recent studies have called into question its magnitude and existence. This study is the first to propose and empirically evaluate an alternative hypothesis of offsetting, namely the alteration of billed or provided services as a means of 'intensity offsetting'. Evaluating both forms of offsetting, it finds strong evidence of intensity offsetting and little to no evidence of volume offsetting. Simulating a 10% reduction in the Medicare fee schedule, this study estimates that across different procedures between 22% and 59% of a fee reduction will be offset through alterations in service intensity.

Merging Medicare Parts A and B: potential effects on beneficiaries, surgeons, and other stakeholders.

Describes the reasons Medicare Parts A and B are currently paid under different mechanisms Explains why the time is ripe to merge Parts A and B Examines the potential effects on delivery of patient care, the federal government, and providers

The national market for Medicare clinical laboratory testing: implications for payment reform.

Current Medicare payment policy for outpatient laboratory services is outdated. Future reforms, such as competitive bidding, should consider the characteristics of the laboratory market. To inform payment policy, we analyzed the structure of the national market for Medicare Part B clinical laboratory testing, using a 5-percent sample of 2006 Medicare claims data. The independent laboratory market is dominated by two firms--Quest Diagnostics and Laboratory Corporation of America. The hospital outreach market is not as concentrated as the independent laboratory market. Two subgroups of Medicare beneficiaries, those with end-stage renal disease and those residing in nursing homes, are each served in separate laboratory markets. Despite the concentrated independent laboratory market structure, national competitive bidding for non-patient laboratory tests could result in cost savings for Medicare.

Evidence-based imaging guidelines and Medicare payment policy.

OBJECTIVE: This study examines the relationship between evidence-based appropriateness criteria for neurologic imaging procedures and Medicare payment determinations. The primary research question is whether Medicare is more likely to pay for imaging procedures as the level of appropriateness increases. DATA SOURCES: The American College of Radiology Appropriateness Criteria (ACRAC) for neurological imaging, ICD-9-CM codes, CPT codes, and payment determinations by the Medicare Part B carrier for Florida and Connecticut. STUDY DESIGN: Cross-sectional study of appropriateness criteria and Medicare Part B payment policy for neurological imaging. In addition to descriptive and bivariate statistics, multivariate logistic regression on payment determination (yes or no) was performed. DATA COLLECTION METHODS: The American College of Radiology Appropriateness Criteria (ACRAC) documents specific to neurological imaging, ICD-9-CM codes, and CPT codes were used to create 2,510 medical condition/imaging procedure combinations, with associated appropriateness scores (coded as low/middle/high). PRINCIPAL FINDINGS: As the level of appropriateness increased, more medical condition/imaging procedure combinations were payable (low = 61 percent, middle = 70 percent, and high = 74 percent). Logistic regression indicated that the odds of a medical condition/imaging procedure combination with a middle level of appropriateness being payable was 48 percent higher than for an otherwise similar combination with a low appropriateness score (95 percent CI on odds ratio=1.19-1.84). The odds ratio for being payable between high and low levels of appropriateness was 2.25 (95 percent CI: 1.66-3.04). CONCLUSIONS: Medicare could improve its payment determinations by taking advantage of existing clinical guidelines, appropriateness criteria, and other authoritative resources for evidence-based practice. Such an approach would give providers a financial incentive that is aligned with best-practice medicine. In particular, Medicare should review and update its payment policies to reflect current information on the appropriateness of alternative imaging procedures for the same medical condition.

Use of Medicare summary notice inserts to generate interest in the Medicare stop smoking program.

PURPOSE: Evaluations of outreach strategies that effectively and efficiently reach the senior population often go unreported. The Medicare Stop Smoking Program (MSSP) was a seven-state demonstration project funded by the Centers for Medicare and Medicaid Services. The 1-year recruitment plan for MSSP included a multifaceted paid media campaign; however, enrollment was slower than anticipated. The purpose of this substudy was to test the effects of including envelope-sized advertisement inserts with Medicare Summary Notices (MSNs) as a supplemental recruitment strategy. METHODS: Information obtained from enrollees on where they had learned about the program as well as overall enrollment rates were analyzed and compared with the time periods during which the inserts were included in MSN mailings. RESULTS: Average call volume to the enrollment center increased by 65.7% in Alabama, the pilot state, and by more than 200% in the subsequent demonstration states. Despite the introduction of the MSN inserts late in the recruitment period, 32.2 % of the 7354 total enrollees stated that they learned about the project through the inserts. CONCLUSIONS: This recruitment method is highly recommended as a cost-effective way to reach the senior population.

Navigating Medicare drug coverage: Part B vs. Part D.

One of the gray areas of Medicare Part D coverage is determining when a prescription falls under Part D and when it falls under Part B. Most Part B drug spending is for drugs billed by a physician and provided incident to the physician's services for a Medicare patient. Medicare Part D medications are dispensed via a prescription and are usually self-administered. Here are examples of situational rules that determine whether a patient is covered under Part B or Part D. Many situations exist where a particular drug for a specific patient is covered under both Part B and Part D, albeit with different delivery and cost-sharing aspects. Understanding which applies when is important to gaining access to medically necessary prescriptions for patients. Giving this information to the prescription plan when writing a prescription order will assure that the medication is provided efficiently, rather than having to deal with denials and an appeal process.

The need for an organized approach for Government Medical Insurance Programs in the Commonwealth of Virginia.

The Commonwealth of Virginia has a disorganized approach to enrolling their retired faculty in Medicare Supplement Insurance Programs. An organized approach to establishing Medicare Supplemental Insurance for retired University faculty should include the following administrative changes to correct this potential health-care crisis for retired state faculty members. First, the ombudsman for human resources for the state universities must receive educational programs that prepare the retired faculty members over the age of 65 to select the corporate insurance policy from Anthem Blue Cross/Blue Shield Insurance Company. Included in this educational program should be a review of the Advantage 65 Member Handbook. Second, they must point out to the faculty member that they are receiving a CORPORATE insurance policy rather than an individual insurance policy from Anthem Blue Cross/Blue Shield Insurance Company. They must provide the telephone numbers of the Anthem Blue Cross/Blue Shield offices in Roanoke, Virginia. Concomitantly, they must send the name and address of the faculty member to the Commonwealth of Virginia Department of Human Resource Management. They should inform the faculty member that the Commonwealth of Virginia Department of Human Resource Management will be sending them newsletters that outline any changes in the corporate insurance policy that they coordinate with the Anthem Blue Cross/Blue Shield Insurance Company. The Commonwealth of Virginia Department of Human Resource Management must take on some new responsibilities in their efforts to coordinate health-care coverage of the retired faculty over the age of 65. First, they must have a computer registry of all corporate health-care policies of the individual faculty members to ensure that newsletters are being sent to them. Ideally, this agency should have a computerized system that allows it to send out its newsletter update by email to those retired faculty members who have computers. They should urge the faculty members to initiate an automatic check payment withdrawal from their bank so that the premiums from their corporate insurance policy can be paid promptly to Anthem Blue Cross/Blue Shield Insurance Company. Whereas the universities and the Commonwealth of Virginia Department of Human Resource Management are making these responsible changes, Anthem Blue Cross/Blue Shield Insurance Company must undertake innovative changes in their corporate health-care policy to assist the retired faculty member. For instance, they must list on the insurance card that the faculty member has a corporate policy. Like the United Health Insurance Company, it would be advisable to offer a 2-5% reduction in the cost of the corporate insurance policy if the faculty member begins an automatic premium payment agreement through their bank. This insurance discount would be an added incentive for the faculty member to do automatic payments through their bank.