Obama Administration Abandons Medicare Drug-Reimbursement Policy

A controversial proposal has been dropped by the Obama administration to overhaul how Medicare reimburses doctors for drugs, after pharmaceutical groups and physicians rallied against it.
Several doctors who dispense drugs in their offices or outpatient environments, like oncologists, said they stood to lose under the proposal. In Medicare Part B, which covers care in offices and outpatient settings of doctors, doctors are paid 6 percent above average wholesale prices of drugs. The administration proposed decreasing that percentage in few cases and adding a flat fee to its payments to doctors, with the target of decreasing the financial incentive to prescribe more-costly medicines.

The American Medical Association and drug-industry trade group Pharmaceutical Research and Manufacturers of America, which escalated the opposition to the policy after its March release, applauded the administration’s reversal.
After listening to public comment, Dr. Andrew Gurman, president of the American Medical Association, claimed on the day of Friday in a statement, “We’re grateful that CMS came to the right decision.”
The proposal also had critics in Congress, involving House Minority Leader Rep. Nancy Pelosi and Rep. Tom Price, a Georgia Republican and a physician who has been chosen as secretary of the Department of Health and Human Services by president-elect Donald Trump.
Rep. Pelosi stated on the day of Thursday in a statement, “Congress must come together in a bipartisan way to deal the soaring charges of prescription drugs in a way that supports the search for cures while making sure that sufferers can afford these treatments,”
The decision to abandon the plan ends one of the Obama administration’s more ambitious attempts to tackle 2 chronically thorny problems that policy makers and economists say contribute to increasing U.S. health-care charges: drug costs and how Medicare pays doctors.
Aaron Albright, a spokesman for CMS, asserted in a statement, “The proposal was made to test whether alternative drug payment structures would make better the quality of patient care and the value of Medicare drug spending. But the administration ran out of time to address the concerns of critics and finalize the rule.”
Andy Slavitt, acting CMS administrator said that For Mr. Trump, who has said that he proposes to deal the increasing drug costs, the outgoing administration’s experience should be an “important lesson”.