5 ways the Senate’s drug pricing bill would change provider pay

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The Senate’s major proposal to cut drug prices is roiling Washington’s pharma lobbying world, but in the U.S.’ deeply entwined healthcare system, hospitals and doctors would see some financial changes too, as the package would save more than $100 billion over a decade.

Here’s are five ways the legislation from Senate Finance Chair Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) bleeds into the provider world.

  1. Pay caps for Medicare Part B providers. The bill is wading into territory where the Obama administration failed and the Trump administration hasn’t yet made progress. Starting in 2021, Medicare Part B’s 6% add-on fee for hospital outpatient departments, ambulatory surgical centers and physician offices would be capped at $1,000 per drug per day. Starting in 2029, this cap could start increasing at the rate of inflation.
  2. A push for biosimilars. One provision would push for more prescriptions of biosimilars through an increased add-on fee within Part B. The five-year increase would raise the 6% administrative fee for hospital facilities and physician offices to 8% of the biosimilar drug’s average sales price.
  3. “Site-neutral” for Part B administrative fees. Starting in 2021, the “grandfathered” off-campus hospital outpatient departments that since 2015 get higher payments for administering Part B drugs would lose their special status. Off-campus hospital facilities that are paid under the outpatient payment system at time of enactment would keep their current pay structure.
  4. Hospital facilities may compete with physician offices on price. Patients have to pay 20% of their treatment under Medicare Part B, but currently HHS only has to post their estimated costs in hospital outpatient departments and ambulatory surgical centers. This bill would add estimates for physician offices to the list so patients can see if they may potentially save money at a different facility.
  5. Physicians could get incentives to use real-time benefit tools in prescribing. Part D plan sponsors would have to adopt real-time benefit tools to give their enrollees real-time cost information about their prescription drugs. Under this provision, physicians could get an optional pay boost under the Merit-based Incentive Payment System (MIPS) to use this tool so their patients can view alternative drugs, the negotiated price, their own expenses and pharmacy options.

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