The Affordable Care Act has overwhelmed large swaths of the economy, and the Administration is poised to upend yet another, by overriding Congress’ directives on how Medicare pays for the medicines that physicians prescribe under that program. Patients, healthcare providers and drug manufacturers all stand to suffer from the Administration’s disregard of a statutory mandate that controls over $20 billion in payments a year.
In the Medicare statute, Congress laid out a formula for Part-B drugs (those you get at a doctor’s office): Providers receive 106% of the average sales price—that is, the going rate plus a little to cover overhead costs. Enter the Centers for Medicare and Medicaid Innovation (CMMI), a bureaucracy within a bureaucracy, created to test “innovative payment and service delivery models.” CMMI recently proposed to “test” an approach to paying for Medicare Part-B drugs that will change reimbursements for three-quarters of the country.
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