Healthcare Economist on President Trump’s plan to lower Medicare drug prices

A recent report from Assistant Secretary for Planning and Evaluation (ASPE) found that for about 30 physician administered drugs, prices are 8 times as high as those charged in other developed countries. To address the high prices, President Trump unveiled a three-part plan to reduce drug prices.  Under the “international pricing index” proposal, U.S. drug…

Part B drug reimbursement

In the past Medicare has reimbursed physicians that administer Part B drugs–typically injectable medications administered in a physician’s office–at 6% of the drug’s cost.  The 6% aims to cover the cost of purchasing and storing the drug as well as administering it.  Because physician reimbursement is proportional to the cost of the drug, physicians have…

The 340B Program: An Overview

What is the 340B program?  A May 2015 MedPAC report has a nice summary: The 340B Drug Pricing Program allows certain hospitals and other health care providers (“covered entities”) to obtain discounted prices on “covered outpatient drugs” (prescription drugs and biologics other than vaccines) from drug manufacturers. Manufacturers must offer 340B discounts to covered entities…

Estimating the Effects of Consolidating Drugs under Part D or Part B

Currently, most Medicare beneficiaries are able to receive coverage for prescription drugs under Medicare Part D. Some drugs, however, are still covered by Medicare Part B, which covers physician services. These drugs are generally those furnished incident to a physician’s service and are administered using durable medical equipment. To simplify coverage policy, Medicare is considering…

Does Medicare use CPT codes for payment?

For Part B services, Medicare pays physicians based on the services they provide.  The American Medical Association (AMA) developed Current Procedural Terminology (CPT) codes to create a taxonomy of procedures that physicians perform.  Does the Centers for Medicare and Medicaid Services (CMS) use these codes for payment? The answer is yes and no.  Officially, CMS…