The Centers for Medicare & Medicaid Services (CMS) should look for ways to ensure that financial incentives for Medicare accountable care organizations (ACOs) do not promote inappropriate shifts in prescribing from the Part B benefit to Part D, urged clinician and biotechnology groups in comments filed with the agency on June 6, 2011.
The Part B benefit covers drugs administered in a physician’s office, such as infused products. It excludes most oral and other medications that patients obtain at retail or mail-order pharmacies for use at home; these medications instead are covered under Part D. So in theory, the ACO program will encompass Part B expenditures, but not Part D. ACOs could save on the cost of drugs by shifting some prescriptions to Part D.
The comments respond to the proposed rule to establish ACOs that the CMS published on March 31, 2011. ACOs are part of a “shared savings” initiative, mandated by the Affordable Care Act, aimed at driving providers through financial incentives to better manage and coordinate healthcare delivery to improve quality and reduce costs. ACOs are slated to begin operating January 1, 2012. Under the proposed regulation, ACOs would be made up of physician practices, hospitals, and other healthcare providers. Primary care physicians are expected to serve as coordinators of individual patient care. The proposal posal does not specifically discuss potential shifts in prescribing. However, the Biotechnology Industry Organization (BIO) and others have urged the CMS to develop a process to ensure that patient care is not secondary to the pursuit of savings.
The implications of prescribing shifts
The BIO points out that the Congressional Research Service (CRS) identified prescribing shifts as a possible issue in an April 25 report on ACOs and the Medicare shared savings program. Such shifts might occur because the savings calculations used to evaluate ACOs are based on Parts A and B expenditures only, suggests the CRS, an analytic unit employed by Congress. Thus, “there may be instances where there is the appearance of cost savings as a result of providers unduly relying on Part D prescription medicines over other forms of care,” the CRS cautioned. The BIO added, “this issue may present problems from both the perspective of quality patient care as well as for Medicare program expenditures.” A shift to Part D drugs could actually increase patient outof- pocket costs, “which in turn may impact prescription drug adherence and ultimately clinical outcomes,” the comments stated.
The prospect of increasing patient costs under Part D is supported by a CMS-commissioned report released in August 2010. The report looked at the potential impact of consolidating Medicare reimbursement for drug categories with overlapping Parts B and D coverage. It found, on average, that patients would face higher costsharing if categories are consolidated under Part D, but that the Medicare program would save money, because Part D has less generous coverage rules. The study looked at oral anticancer and antiemetic drugs, insulin, vaccinations, inhalants, and rheumatoid arthritis medications.
In separate comments, the American Society of Clinical Oncology (ASCO) also targeted potential prescribing shifts in cancer therapies. “The CMS should address perverse incentives that will arise due to the proposed rule’s exclusion of Part D drugs from the costs by which ACO savings are measured,” ASCO warned. “Safeguards are needed to ensure that cancer patients receive the most appropriate therapy, regardless of whether that therapy is typically covered under Part B or under Part D.” (In addition to chemotherapy administered in a physician’s office, some oral anticancer drugs are also covered under Part B when they are direct substitutions for physician-administered treatments.)
Even the medical device and diagnostics industry registered concern with possible prescribing shifts to Part D drugs. The Advanced Medical Technology Association pointed out that providers might have an artificial incentive to substitute a pain medication, for example, when a surgical procedure covered under Part A or B would be considered standard of care.
Carving out the cost of new technologies
A number of stakeholders flagged the prospect that cost issues might also deter the adoption of cuttingedge drugs or other medical technologies by ACOs. The BIO and the Medical Device Manufacturers Association are among the groups urging CMS to consider ways to carve out new technologies from the benchmark for ACO costs and from annual expenditure performance reviews.
As proposed, the ACO program would be risk-based: an organization would receive a bonus payment if cost and quality benchmarks are met but would also face penalties if they are not. As a result, providers may be reluctant to adopt expensive new technologies, based on the comments.