This Week in Managed Care: March 12, 2016

Hello, I’m Justin Gallagher, associate publisher of The American Journal of Managed Care. Welcome to This Week in Managed Care, from the Managed Markets News Network.

New Payment for Part B

This week CMS announced a new value-based model for Medicare Part B, which covers prescription drugs administered in a doctor’s office or a hospital, such as cancer medications and eye care treatments.

Right now, providers are paid 6% above the sales price. The proposed model would pay 2.5% plus a fee $16.80 per drug per day. CMS wants to study whether this change alters prescribing habits.

The proposal offers other models, including:

• eliminating patient cost-sharing
• payments that are tied to indications, which means drugs would get higher reimbursement if they work better for certain conditions.
• risk-sharing agreements with drug manufacturers

Quick Criticism

Reaction from cancer providers was swift and harsh. Dr Allen Lichter, CEO of the American Society of Clinical Oncology, said in a statement: “ASCO believes that it is inappropriate for CMS to manipulate choice of treatment for cancer patients using heavy-handed reimbursement techniques.”

The Medicare Part B proposal was also a topic of conversation at this week’s conference of America’s Health Insurance Plans.

Medicare Drug Pricing Negotiation

Dr Tricia Neuman of the Kaiser Family Foundation spoke with AJMC about whether drug prices would come down if Medicare used its negotiating power, as presidential candidates have proposed. Watch the interview here.

Site-of-Care Cost Variation

A new study from AHIP, published by The American Journal of Managed Care, finds that whether care happens in a hospital has a major effect on the cost, and the migration of care into the hospital is driving up spending. The study found that price variation led to $1.9 billion in additional spending on seven common medical services in 2013.

Among the key findings:

• In 2013, the price of a routine office visit was 21 percent higher if it took place in a hospital outpatient department instead of a doctor’s office.
• A chest radiography was 258 percent higher in the hospital than if performed in doctor’s office.
• An increase in price variation, along with a shift in services moving into hospitals, raised total health spending 44 percent from 2008 to 2013.

Read the full study.

CV Results for Diabetes Drug

This week, Novo Nordisk announced topline results for a 5-year study of Victoza, the version of liraglutide approved for patients with type 2 diabetes. Results from a long-term cardiovascular outcomes trial of 9000 patients showed the drug reduced the risk of major adverse cardiovascular events.

As the FDA has required these extended safety trials in recent years, results help distinguish diabetes and obesity drugs from one another. Full trial results will be presented in June at the 76th Scientific Sessions of the American Diabetes Association.

Patient-Centered Diabetes Care

There’s still time to register for Patient-Centered Diabetes Care, which meets April 7-8 in Teaneck, New Jersey. For more information and to register, click here.

For everyone at the Managed Markets News Network, I’m Justin Gallagher. Thanks for joining us.