Senate Republicans urge Obama to withdraw Medicare Part B experiment

One month after the Obama administration unveiled an experiment to revamp the Medicare Part B program, more than a dozen Republican Senators are urging that it be withdrawn. At the same time, House Republicans and Democrats are circulating letters among themselves that express varying degrees of concern with the program.

In a letter sent on Friday to the US Centers for Medicare and Medicaid Services, the Senators charged that the program would “severely disrupt care for vulnerable beneficiaries with cancer” and other serious medical conditions. They also complained that CMS failed to undertake a fully transparent process to assemble its program.

At issue is an attempt by the administration to encourage greater use of lower-cost, but equally effective treatments. The Part B program covers injectable and infused medications for the elderly. The government also maintains its plan will be budget-neutral, or will not cost additional money.

Under the Part B program, doctors, and hospitals buy a medicine, and the government reimburses the average sales price plus 6 percent. But the experiment, which would run five years starting this fall, would pay physicians the average price, plus another 2.5 percent and a flat fee of $16.80, not including reductions required by sequestration, or automatic spending cuts. The program would also pursue ways to pay for medicines based on different definitions of value.

As we noted previously, the move reflects growing concern over the rising cost of medications, a hot-button topic that is straining payer budgets and angering Americans. The administration hopes to lower its drug spending by reducing reimbursement fees for physicians.

The missive from the senators is not surprising. Even before the administration unveiled its program last month, there was heated opposition. Since then, more than 300 groups representing physicians, drug makers, and patients also released a letter that encouraged the administration to withdraw its proposal. And many of these groups have been lobbying Congress.

“The proposal, which was rushed through review without physician or patient input, lays out an experiment (that is) not based on quality metrics,” said the Community Oncology Alliance, a trade group that represents smaller cancer clinics, at the time the program was unveiled last month.

The administration “intends to drive the selection of cancer drugs toward a CMS definition of value, rather than the most appropriate treatment determined by oncologists in close collaboration with their patients.”

Some physicians are upset because they believe the administration will unfairly penalize them for administering more expensive medicines. They also argue that changing reimbursement formulas does nothing to lower drug prices.

In recent days, members of Congress have been circulating letters to their colleagues. A letter proposed by House Republicans, which was reported by The Huffington Post, also urges the administration to withdraw the program. But a letter that House Democrats have circulated instead, suggests that the administration find a way to address the same concerns, but does not specifically mention nixing the program.

Just the same, the letter from the House Democrats could work toward slowing the administration program. However, a spokesman for House Democratic Leader Nancy Pelosi told us that the “members are outlining their concerns, but this letter is in furtherance of getting an effective rule in place under the current timeline. This is no way an effort to slow down or undermine the administration’s efforts.”