IPA believes patients will face severe access challenges to care in physician offices and stand-alone infusion centers if Inflation Reduction Act (IRA) Part B payment cuts to healthcare providers are not addressed soon. Fortunately, the Protecting Patient Access to Cancer and Complex Therapies Act would preserve the ability for providers to continue to deliver care in these settings while saving Medicare and beneficiaries resources.
Background
The IRA created the Medicare Drug Price Negotiation Program, which requires the Secretary of HHS to select certain drugs covered by Medicare Part B for negotiation. Negotiations involve setting a Maximum Fair Price (MFP) that Medicare will pay for selective drugs. The first Part B drugs will be selected by February 1, 2026, with MFPs to take effect on January 1, 2028.
A significant provider reimbursement aspect of Part B drug infusions is the 6% add-on payment to the average sales price (ASP) payment methodology, as the professional fee for drug administration only covers a small fraction of providers’ costs.
As detailed below, non-hospital-based providers save Medicare on average more than 64 cents on the dollar per infusion compared to hospital administration for the professional fee of the same drug.
Unfortunately, these providers are caught in the middle of negotiations between manufacturers and Medicare, which threatens their ability to continue to deliver care and presents severe potential patient access challenges.
Due to IRA cuts, The Congressional Budget Office (CBO) estimates provider reimbursement for Part B drugs subject to negotiation will be cut by 50 percent or more. This is due to reimbursement being tied to the lower MFP+6% add on payment vs. their current ASP+6% payment. For example, the add-on payment would be cut from $600 to $300 for a Part B drug whose reimbursement was reduced from $10,000 to $5,000. Cuts of this magnitude could threaten patient access. Many providers, already operating on razor thin margins, could be forced to send patients to the more expensive hospital setting (assuming they have the capacity to accept these patients), which is more costly to Medicare and less convenient to beneficiaries.
Protecting Patient Access to Part B Medications
The Protecting Patient Access to Cancer and Complex Therapies Act would maintain current reimbursements to providers while saving Medicare and its beneficiaries the same amount of money for drugs negotiated by the HHS Secretary. Drug manufacturers would pay a rebate to CMS in the amount by which ASP exceeds MFP and covers the lower beneficiary coinsurance rate. This bill protects providers and their patients from collateral damage in negotiations between CMS and manufacturers.
New analysis by Miliman shows that the bill would generate $3.3B in savings over 10 years from the sequester being applied to the higher ASP price rather than the MFP price under current law. In addition, by preserving access to the lower cost physician office and clinic setting rather than forcing patients to receive their infusions in the hospital, patients and Medicare will save substantial resources by getting their drug infusions in the most efficient site of care.
The bill has been endorsed by 58 patient and provider organizations including Infusion Providers Alliance (IPA), International Foundation for Autoimmune & Autoinflammatory Arthritis, American Academy of Allergy, Asthma, & Immunology (AAAAI), Association of Women in Rheumatology (AWIR), Cancer Support Network, Community Oncology Alliance (COA), Digestive Health Physicians Association (DHPA), and Large Urology Group Practice Association (LUGPA), among others.
About the Infusion Providers Alliance
The Infusion Providers Alliance (IPA) is committed to protecting the integrity of the provider-patient relationship by empowering providers and patients to choose the most appropriate treatment together. We advocate for policies that ensure timely and adequate patient access to high quality care in IPA members’ convenient, community-based, non-hospital settings. IPA members operate over 1,000 in-office or stand-alone ambulatory infusion centers across 43 states nationwide, delivering value to the health care system and improved outcomes to patients.
All inquiries should be emailed to ewarren@infusionprovidersalliance.org.