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Subject: Technical fix to the RX pricing provisions of the BBB
As a non-hospital provider of infusion therapy, I’d like to express my concerns with the Rx drug pricing provisions in the Build Back Better (BBB) legislation, and suggest a legislative fix backed by the provider community (https://bit.ly/3lTeT8i) that would preserve the bill’s goal of reducing drug prices while protecting patients’ access to their chronic infused medicines in non-hospital facilities.
Our facilities are major access points of care for patients with complex and chronic health conditions, providing convenience and an exceptional patient experience with better outcomes at a much lower cost than the hospital setting. Because our Medicare reimbursement is tied to the cost of the drug, the result of this bill is that the government-set “negotiated price” would force us to administer these very expensive drugs at well below our acquisition costs. A November 18 study by Avalere (https://bit.ly/3IBgI3b) concludes the BBB would lead to a 44% cut, on average, in the physician office/ambulatory infusion center setting to the add-on payment for Part B drugs initially targeted for negotiation. Infusion centers and physician practices are low-margin operations and cuts of that magnitude would be devastating. We may have no choice but to refer our infusion patients to the local hospital, which will cost patients and the federal government more money for lower quality and less convenient care.
Perhaps most concerning is how radical changes in reimbursement would upend the reliable buy-and-bill distribution system and put physician practices and infusion centers at risk because they would be acquiring product for prices far above reimbursement. Healthcare providers confront a downward spiral of ASP pricing and reimbursement that will almost certainly lag a much higher acquisition cost for both our Medicare and commercially insured patients. Hospitals have the ability to cover payment shortfalls in drug administration with revenue streams from any number of sources (surgery, diagnostic imaging and lab services, endowments, 340B overages etc.) – infusion centers do not; this is their only source of revenue. That is unfortunate, as Medicare saves more than 50 cents on the dollar for drug infusion administration when a beneficiary gets her infusion in one of our centers rather than a hospital.
We join the health care provider community in supporting a legislative fix whereby, instead of putting physicians and infusion centers in the middle of price negotiations between the government and drug manufacturers, the manufacturers would directly refund the government for any drug price that exceeds the negotiated “maximum fair price,” plus 6 percent. The proposal would also lower the coinsurance costs for Medicare beneficiaries. This solution should provide the same the amount of savings for the Medicare program but also preserve access in our setting of care.
Please do not hesitate to reach out if you want to discuss any aspect of these issues.