Characteristics of 340B Hospitals Receiving Medicare Part B Repayments

This cross-sectional study compared the characteristics of 340B hospitals that did not receive a lump sum payment with hospitals in the program that did receive payment.

The Medicare Physician Fee Schedule and Unethical Behavior

This Viewpoint discusses the Medicare Physician Fee Schedule and its flaws, including how they might be remedied by severing CMS dependence on Relative Value Update Committee estimates of time and intensity.

Added Therapeutic Benefit of Top-Selling Brand-name Drugs in Medicare

Importance

The Inflation Reduction Act of 2022 authorizes Medicare to negotiate prices of top-selling drugs based on several factors, including therapeutic benefit compared with existing treatment options.

Objective

To determine the added therapeutic benefit of the 50 top-selling brand-name drugs in Medicare in 2020, as assessed by health technology assessment (HTA) organizations in Canada, France, and Germany.

Design, Setting, and Participants

In this cross-sectional study, publicly available therapeutic benefit ratings, US Food and Drug Administration documents, and the Medicare Part B and Part D prescription drug spending dashboards were used to determine the 50 top-selling single-source drugs used in Medicare in 2020 and to assess their added therapeutic benefit ratings through 2021.

Main Outcomes and Measures

Ratings from HTA bodies in Canada, France, and Germany were categorized as high (moderate or greater) or low (minor or no) added benefit. Each drug was rated based on its most favorable rating across countries, indications, subpopulations, and dosage forms. We compared the use and prerebate and postrebate (ie, net) Medicare spending between drugs with high vs low added benefit.

Results

Forty-nine drugs (98%) received an HTA rating by at least 1 country; 22 of 36 drugs (61%) received a low added benefit rating in Canada, 34 of 47 in France (72%), and 17 of 29 in Germany (59%). Across countries, 27 drugs (55%) had a low added therapeutic rating, accounting for $19.3 billion in annual estimated net spending, or 35% of Medicare net spending on the 50 top-selling single-source drugs and 11% of total Medicare net prescription drug spending in 2020. Compared with those with high added benefit, drugs with a low added therapeutic rating were used by more Medicare beneficiaries (median 387 149 vs 44 869) and had lower net spending per beneficiary (median $992 vs $32 287).

Conclusions and Relevance

Many top-selling Medicare drugs received low added benefit ratings by the national HTA organizations of Canada, France, and Germany. When negotiating prices for these drugs, Medicare should ensure they are not priced higher than reasonable therapeutic alternatives.

Estimated Medicare Part B Savings From Inflationary Rebates

This study uses annual Medicare Part B spending data to examine the potential savings from the drug pricing reforms in the Inflation Reduction Act of 2022.

Prescription Drug Spending in Fee-for-Service Medicare, 2008-2019

IMPORTANCE

Prescription drug spending is a topic of increased interest to the public and policymakers. However, prior assessments have been limited by focusing on retail spending (Part D-covered drugs), omitting clinician-administered (Part B-covered) drug spending, or focusing on all fee-for-service Medicare beneficiaries, regardless of their enrollment into prescription drug coverage.

OBJECTIVE

To estimate the proportion of health care spending contributed by prescription drugs and to assess spending for retail and clinician-administered prescriptions.

DESIGN, SETTING, AND PARTICIPANTS

Descriptive, serial, cross-sectional analysis of a 20% random sample of fee-for-service Medicare beneficiaries in the United States from 2008 to 2019 who were continuously enrolled in Parts A (hospital), B (medical), and D (prescription drug) benefits, and not in Medicare Advantage.

EXPOSURE

Calendar year.

MAIN OUTCOMES AND MEASURES

Net spending on retail (Part D-covered) and clinician-administered (Part B-covered) prescription drugs; prescription drug spending (spending on Part B-covered and Part D-covered drugs) as a percentage of total per-capita health care spending. Measures were adjusted for inflation and for postsale rebates (for Part D-covered drugs).

RESULTS

There were 3 201 284 beneficiaries enrolled in Parts A, B, and D in 2008 and 4 502 718 in 2019. In 2019, beneficiaries had a mean (SD) age of 71.7 (12.0) years, documented sex was female for 57.7%, and 69.5% had no low-income subsidies. Total per-capita spending was $16 345 in 2008 and $20 117 in 2019. Comparing 2008 with 2019, per-capita Part A spending was $7106 (95% CI, $7084-$7128) vs $7120 (95% CI, $7098-$7141), Part B drug spending was $720 (95% CI, $713-$728) vs $1641 (95% CI, $1629-$1653), Part B nondrug spending was $5113 (95% CI, $5105-$5122) vs $6702 (95% CI, $6692-$6712), and Part D net spending was $3122 (95% CI, $3117-$3127) vs $3477 (95% CI, $3466-$3489). The proportion of total annual spending attributed to prescription drugs increased from 24.0% in 2008 to 27.2% in 2019, net of estimated rebates and discounts.

CONCLUSIONS AND RELEVANCE

In 2019, spending on prescription drugs represented approximately 27% of total spending among fee-for-service Medicare beneficiaries enrolled in Part D, even after accounting for postsale rebates.

Association of Generic Competition With Price Decreases in Physician-Administered Drugs and Estimated Price Decreases for Biosimilar Competition

IMPORTANCE

Price decreases of biologic and biosimilar products in Medicare Part B have been minimal, even with biosimilar competition. Medicare reimburses clinicians for biologics and biosimilars differently than for brand-name and generic drugs, which has generated greater price reductions.

OBJECTIVE

To characterize the nature of price competition among brand-name and generic drugs under Medicare Part B and to estimate the cost savings to the program of subjecting biologic and biosimilar therapies to a similar price competition.

DESIGN, SETTING, AND PARTICIPANTS

This cohort study analyzed all brand-name drugs and their approved generic versions as well as biologics and biosimilars that were reimbursed under Medicare Part B from quarter 1 of 2005 to quarter 2 of 2021. Two separate data sets were created: brand-name and generic drugs as well as biologics and biosimilars data sets. Brand-name products with generic versions that were introduced before 2005 were excluded, and so were vaccines.

EXPOSURES

Number of generic and biosimilar competitors over time.

MAIN OUTCOMES AND MEASURES

Price change as a percentage of the brand-name drug or biologic price in the quarter before generic or biosimilar competition. Price change was modeled using a linear, fixed-effects time series regression, with the number of generic or biosimilar competitors as the main covariate. Time was expressed as the number of quarters since the first generic or biosimilar competitor entered the market. Savings were estimated by projecting the regression model of brand-name and generic drug competition to observed biologic and biosimilar competition and by applying the estimated price reduction to actual Medicare spending for those products from 2015 to 2019.

RESULTS

Of the 988 Healthcare Common Procedure Coding System codes identified, 50 (5.0%) met the inclusion criteria for the brand-name and generic drug data set and 28 (2.8%) met the criteria for the biologic and biosimilar data set. The first generic competitor was associated with reduced drug prices by 17.0%, the second competitor with a 39.5% decrease, the third competitor with a 52.5% decrease, and the fourth and more competitors with a 70.2% decrease (price decline was measured from brand-name drug price before the first generic competitor rather than from price established with fewer competitors). If biologics and biosimilars were subject to the same Medicare reimbursement framework as brand-name and generic drugs, Medicare spending on these products was estimated to have been 26.6% lower ($1.6 billion) from 2015 to 2019.

CONCLUSIONS AND RELEVANCE

This study found minimal uptake of biosimilars and limited price reductions for biologics and biosimilars under the current Medicare Part B reimbursement policy. Adopting the bundled biosimilar reimbursement structure for biologic and biosimilar therapies may be associated with substantial savings and encourage greater biosimilar market entry.

Associations of Intensive Lifestyle Intervention in Type 2 Diabetes With Health Care Use, Spending, and Disability: An Ancillary Study of the Look AHEAD Study

IMPORTANCE

Intensive lifestyle interventions focused on diet and exercise can reduce weight and improve diabetes management. However, the long-term effects on health care use and spending are unclear, especially for public payers.

OBJECTIVE

To estimate the association of effective intensive lifestyle intervention for weight loss with long-term health care use and Medicare spending.

DESIGN, SETTING, AND PARTICIPANTS

This ancillary study used data from the Look AHEAD randomized clinical trial, which randomized participants with type 2 diabetes to an intensive lifestyle intervention or control group (ie, diabetes support and education), provided ongoing intervention from 2001 to 2012, and demonstrated improved diabetes management and reduced health care costs during the intervention. This study compared Medicare data between study arms from 2012 to 2015 to determine whether the intervention was associated with persistent reductions in health care spending.

EXPOSURE

Starting in 2001, Look AHEAD's intervention group participated in sessions with lifestyle counselors, dieticians, exercise specialists, and behavioral therapists with the goal of reducing weight 7% in the first year. Sessions occurred weekly in the first 6 months of the intervention and decreased over the intervention period. The controls participated in periodic group education sessions that occurred 3 times per year in the first year and decreased to 1 time per year later in the trial.

MAIN OUTCOMES AND MEASURES

Outcomes included total Medicare spending, Part D prescription drug costs, Part A and Part B Medicare spending, hospital admissions, emergency department visits, and disability-related Medicare eligibility.

RESULTS

This study matched Medicare administrative records for 2796 Look AHEAD study participants (54% of 5145 participants initially randomized and 86% of 3246 participants consenting to linkages). Linked intervention and control participants were of a similar age (mean [SD] age, 59.6 [5.4] years vs 59.6 [5.5] years at randomization) and sex (818 [58.1%] women vs 822 [59.3%] women). There was no statistically significant difference in total Medicare spending between groups (difference, -$133 [95% CI, -$1946 to $1681]; P = .89). In the intervention group, compared with the control group, there was statistically significantly higher Part B spending (difference, $513 [95% CI, $70 to $955]; P = .02) but lower prescription drug costs (difference, -$803 [95% CI, -$1522 to -$83]; P = .03).

CONCLUSIONS AND RELEVANCE

This ancillary study of a randomized clinical trial found that reductions in health care use and spending associated with an intensive lifestyle intervention for type 2 diabetes diminished as participants aged. Intensive lifestyle interventions may need to be sustained to reduce long-term health care spending.

TRIAL REGISTRATION

ClinicalTrials.gov Identifier: NCT03952728.

Biosimilar Uptake in Medicare Part B Varied Across Hospital Outpatient Departments and Physician Practices: The Case of Filgrastim

OBJECTIVES

To examine the uptake of filgrastim-sndz (Zarxio), the first biosimilar to launch in the United States, in the Medicare Part B fee-for-service program from its launch in September 2015 to December 2017 and compare characteristics of patients and facilities that used filgrastim-sndz or originator filgrastim (Neupogen).

METHODS

The 20% sample of Medicare Part B fee-for-service administrative claims data was used to extract information on claims for any filgrastim product between January 1, 2015 and December 31, 2017.

RESULTS

The utilization of filgrastim-sndz in Medicare Part B increased sharply between January and August 2016, surpassing filgrastim by November 2017, contributing to a 30% decrease in overall spending on this drug since 2015. Uptake was faster and larger in physician practices compared with hospital outpatient departments. About 77% of patients receiving filgrastim-sndz were new users. Utilization patterns indicated that product selection occurred at the facility level, rather than being at the discretion of the prescribing physician or driven by patient characteristics.

CONCLUSION

Uptake of biosimilar filgrastim in the Medicare Part B program occurred despite multiple challenges to the adoption of biosimilars in the US market, suggesting that substantial potential savings could be generated by improving biosimilar uptake. Our findings indicated that physician practices and hospital outpatient departments have distinctive biosimilar uptake patterns. Thus policy makers aiming to contain Medicare Part B spending might consider focusing on incentivizing biosimilar uptake among hospital outpatient departments.

Medicare Program; Medicare Shared Savings Program; Accountable Care Organizations--Pathways to Success and Extreme and Uncontrollable Circumstances Policies for Performance Year 2017. Final rules

Under the Medicare Shared Savings Program (Shared Savings Program), providers of services and suppliers that participate in an Accountable Care Organization (ACO) continue to receive traditional Medicare fee-for-service (FFS) payments under Parts A and B, but the ACO may be eligible to receive a shared savings payment if it meets specified quality and savings requirements. The policies included in this final rule provide a new direction for the Shared Savings Program by establishing pathways to success through redesigning the participation options available under the program to encourage ACOs to transition to two-sided models (in which they may share in savings and are accountable for repaying shared losses). These policies are designed to increase savings for the Trust Funds and mitigate losses, reduce gaming opportunities, and promote regulatory flexibility and free-market principles. This final rule also provides new tools to support coordination of care across settings and strengthen beneficiary engagement; and ensure rigorous benchmarking. In this final rule, we also respond to public comments we received on the extreme and uncontrollable circumstances policies for the Shared Savings Program that were used to assess the quality and financial performance of ACOs that were subject to extreme and uncontrollable events, such as Hurricanes Harvey, Irma, and Maria, and the California wildfires, in performance year 2017, including the applicable quality data reporting period for performance year 2017.

Income-Related Monthly Adjustment Amounts for Medicare Part B and Prescription Drug Coverage Premiums. Final rule

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) changed the modified adjusted gross income (MAGI) ranges associated with Medicare Part B and Medicare prescription drug coverage premiums for years beginning in 2018. The Bipartisan Budget Act of 2018 (BBA 2018) revised the MAGI ranges again for years beginning with 2019. We consider a beneficiary's MAGI and tax filing status to determine: The percentage of the unsubsidized Medicare Part B premium that the beneficiary must pay; and the percentage of the cost of basic Medicare prescription drug coverage the beneficiary must pay. This final rule makes our regulations consistent with the MAGI ranges specified by MACRA and BBA 2018.

Medicare Benefit Redesign: Enhancing Affordability for Beneficiaries While Promoting Choice and Competition

ISSUE

Out-of-pocket expenses are capped for enrollees in Medicare Advantage (MA) plans but not for beneficiaries in traditional Medicare, which also requires a high deductible for hospital care. The need for supplemental Medigap coverage adds to traditional Medicare’s complexity and administrative costs. Shortfalls in financial protection also make it difficult to offer traditional Medicare as a choice for people under age 65, as some have proposed.

GOALS

Describe alternative benefit designs that would limit out-of-pocket costs for traditional Medicare’s core services, assess their cost, and illustrate financing mechanisms.

METHODS

Analysis of a $3,500 ceiling on annual out-of-pocket expenses for Parts A and B benefits and options for replacing Part A hospital cost-sharing with a $350 or $100 copayment per admission.

KEY FINDINGS

Estimates of the costs of the reforms are $36–$44 per beneficiary per month, assuming no behavioral or supplemental coverage changes. This could be financed by a $9–$11 increase in premiums combined with a 0.3-to-0.4-percentage-point increase in the Medicare payroll tax (split between employer and employees). Medicaid costs would decrease, while employers, retirees, and Medigap enrollees would see reduced premiums.

CONCLUSION

The reforms would improve affordability and put traditional Medicare on a more equal footing with MA plans. They would also make it easier to open traditional Medicare to people under age 65.

Understanding Trends in Medicare Spending, 2007-2014

OBJECTIVES

To analyze the sources of per-beneficiary Medicare spending growth between 2007 and 2014, including the role of demographic characteristics, attributes of Medicare coverage, and chronic conditions.

DATA SOURCES

Individual-level Medicare spending and enrollment data.

STUDY DESIGN

Using an Oaxaca-Blinder decomposition model, we analyzed whether changes in price-standardized, per-beneficiary Medicare Part A and B spending reflected changes in the composition of the Medicare population or changes in relative spending levels per person.

DATA EXTRACTION METHODS

We identified a 5 percent sample of fee-for-service Medicare beneficiaries age 65 and above from years 2007 to 2014.

RESULTS

Mean payment-adjusted Medicare per-beneficiary spending decreased by $180 between the 2007-2010 and 2011-2014 time periods. This decline was almost entirely attributable to lower spending levels for beneficiaries. Notably, declines in marginal spending levels for beneficiaries with chronic conditions were associated with a $175 reduction in per-beneficiary spending. The decline was partially offset by the increasing prevalence of certain chronic diseases. Still, we are unable to attribute a large share of the decline in spending levels to observable beneficiary characteristics or chronic conditions.

CONCLUSIONS

Declines in spending levels for Medicare beneficiaries with chronic conditions suggest that changing patterns of care use may be moderating spending growth.

A Policy Option to Enhance Access and Affordability for Medicare’s Low-Income Beneficiaries

ISSUE

An estimated 40 percent of low-income Medicare beneficiaries spend 20 percent or more of their incomes on premiums and health care costs. Low-income beneficiaries with multiple chronic conditions or high need are at particular risk of financial hardship. High cost burdens reflect Medicare premiums and cost-sharing, gaps in benefits, and limited assistance. Existing policies to help people with low incomes are fragmented — meaning that beneficiaries apply separately, sometimes to different offices — and require Medicare beneficiaries to navigate complex applications.

GOALS

With the goal of enhancing access and affordability for people vulnerable due to low incomes and poor health, this issue brief proposes a policy that would reduce Medicare’s cost-sharing and premiums for beneficiaries with incomes below 150 percent of the federal poverty level.

METHODS

Profile current cost burdens by income groups and assess the potential impact of a policy to expand cost-sharing and premium assistance using the 2012 Medicare Current Beneficiary Survey projected to 2016.

RESULTS AND CONCLUSION

The policy described could help 8.1 million low-income beneficiaries, significantly lowering their risk of high cost burdens. It also could simplify the administration of assistance provided to these enrollees.

Consequences of the 340B Drug Pricing Program

BACKGROUND

The 340B Drug Pricing Program entitles qualifying hospitals to discounts on outpatient drugs, increasing the profitability of drug administration. By tying the program eligibility of hospitals to their Disproportionate Share Hospital (DSH) adjustment percentage, which reflects the proportion of hospitalized patients who are low-income, the program is intended to expand resources for underserved populations but provides no direct incentives for hospitals to use financial gains to enhance care for low-income patients.

METHODS

We used Medicare claims and a regression-discontinuity design, taking advantage of the threshold for program eligibility among general acute care hospitals (DSH percentage, >11.75%), to isolate the effects of the program on hospital-physician consolidation (i.e., acquisition of physician practices or employment of physicians by hospitals) and on the outpatient administration of parenteral drugs by hospital-owned facilities in three specialties in which parenteral drugs are frequently used. For low-income patients, we also assessed the effects of the program on the provision of care by hospitals and on mortality.

RESULTS

Hospital eligibility for the 340B Program was associated with 2.3 more hematologist-oncologists practicing in facilities owned by the hospital, or 230% more hematologist-oncologists than expected in the absence of the program (P=0.02), and with 0.9 (or 900%) more ophthalmologists per hospital (P=0.08) and 0.1 (or 33%) more rheumatologists per hospital (P=0.84). Program eligibility was associated with significantly higher numbers of parenteral drug claims billed by hospitals for Medicare patients in hematology-oncology (90% higher, P=0.001) and ophthalmology (177% higher, P=0.03) but not rheumatology (77% higher, P=0.12). Program eligibility was associated with lower proportions of low-income patients in hematology-oncology and ophthalmology and with no significant differences in hospital provision of safety-net or inpatient care for low-income groups or in mortality among low-income residents of the hospitals' local service areas.

CONCLUSIONS

The 340B Program has been associated with hospital-physician consolidation in hematology-oncology and with more hospital-based administration of parenteral drugs in hematology-oncology and ophthalmology. Financial gains for hospitals have not been associated with clear evidence of expanded care or lower mortality among low-income patients. (Funded by the Agency for Healthcare Research and Quality and others.).

Medicare, Medicaid, and Children's Health Insurance Programs: Announcement of the Extension of Temporary Moratoria on Enrollment of Part B Non-Emergency Ground Ambulance Suppliers and Home Health Agencies in Designated Geographic Locations. Extension of temporary moratoria

This document announces the extension of statewide temporary moratoria on the enrollment of new Medicare Part B non-emergency ground ambulance providers and suppliers and Medicare home health agencies, subunits, and branch locations in Florida, Illinois, Michigan, Texas, Pennsylvania, and New Jersey, as applicable, to prevent and combat fraud, waste, and abuse. This extension also applies to the enrollment of new non-emergency ground ambulance suppliers and home health agencies, subunits, and branch locations in Medicaid and the Children's Health Insurance Program in those states. For purposes of these moratoria, providers that were participating as network providers in one or more Medicaid managed care organizations prior to January 1, 2018 will not be considered "newly enrolling" when they are required to enroll with the State Medicaid agency pursuant to a new statutory requirement, and thus will not be subject to the moratoria.

Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2018; Medicare Shared Savings Program Requirements; and Medicare Diabetes Prevention Program. Final rule

This major final rule addresses changes to the Medicare physician fee schedule (PFS) and other Medicare Part B payment policies such as changes to the Medicare Shared Savings Program, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. In addition, this final rule includes policies necessary to begin offering the expanded Medicare Diabetes Prevention Program model.

Meaningful Use of Electronic Health Records and Medicare Expenditures: Evidence from a Panel Data Analysis of U.S. Health Care Markets, 2010-2013

OBJECTIVE

To determine if recent growth in hospital and physician electronic health record (EHR) adoption and use is correlated with decreases in expenditures for elderly Medicare beneficiaries.

DATA SOURCES

American Hospital Association (AHA) General Survey and Information Technology Supplement, Health Information Management Systems Society (HIMSS) Analytics survey, SK&A Information Services, and the Centers for Medicare & Medicaid Services (CMS) Chronic Conditions Data Warehouse Geographic Variation Database for 2010 through 2013.

STUDY DESIGN

Fixed effects model comparing associations between hospital referral region (HRR) level measures of hospital and physician EHR penetration and annual Medicare expenditures for beneficiaries with one of four chronic conditions. Calculated hospital penetration rates as the percentage of Medicare discharges from hospitals that satisfied criteria analogous to Meaningful Use (MU) Stage 1 requirements and physician rates as the percentage of physicians using ambulatory care EHRs.

PRINCIPAL FINDINGS

An increase in the hospital penetration rate was associated with a small but statistically significant decrease in total Medicare and Medicare Part A acute care expenditures per beneficiary. An increase in physician EHR penetration was also associated with a significant decrease in total Medicare and Medicare Part A acute care expenditures per beneficiary as well as a decrease in Medicare Part B expenditures per beneficiary. For the study population, we estimate approximately $3.8 billion in savings related to hospital and physician EHR adoption during 2010-2013. We also found that an increase in physician EHR penetration was associated with an increase in lab test expenses.

CONCLUSIONS

Health care markets that had steeper increases in EHR penetration during 2010-2013 also had steeper decreases in total Medicare and acute care expenditures per beneficiary. Markets with greater increases in physician EHR had greater declines in Medicare Part B expenditures per beneficiary.

Detecting Potential Overbilling in Medicare Reimbursement via Hours Worked

We propose a novel and easy-to-implement approach to detect potential overbilling based on the hours worked implied by the service codes which physicians submit to Medicare. Using the Medicare Part B Fee- for-Service (FFS) Physician Utilization and Payment Data in 2012 and 2013 released by the Centers for Medicare and Medicaid Services, we construct estimates for physicians' hours spent on Medicare beneficiaries. We find that about 2,300 physicians, representing about 3 percent of those with 20 or more hours of Medicare Part B FFS services, have billed Medicare over 100 hours per week. We consider these implausibly long hours.

Medicare Program; Advancing Care Coordination Through Episode Payment Models (EPMs); Cardiac Rehabilitation Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model (CJR). Final rule

This final rule implements three new Medicare Parts A and B episode payment models, a Cardiac Rehabilitation (CR) Incentive Payment model and modifications to the existing Comprehensive Care for Joint Replacement model under section 1115A of the Social Security Act. Acute care hospitals in certain selected geographic areas will participate in retrospective episode payment models targeting care for Medicare fee-forservice beneficiaries receiving services during acute myocardial infarction, coronary artery bypass graft, and surgical hip/femur fracture treatment episodes. All related care within 90 days of hospital discharge will be included in the episode of care. We believe these models will further our goals of improving the efficiency and quality of care for Medicare beneficiaries receiving care for these common clinical conditions and procedures.

Damage caps and defensive medicine, revisited

Does tort reform reduce defensive medicine and thus healthcare spending? Several (though not all) prior studies, using a difference-in-differences (DiD) approach, find lower Medicare spending for hospital care after states adopt caps on non-economic or total damages ("damage caps"), during the "second" reform wave of the mid-1980s. We re-examine this issue in several ways. We study the nine states that adopted caps during the "third reform wave," from 2002 to 2005. We find that damage caps have no significant impact on Medicare Part A spending, but predict roughly 4% higher Medicare Part B spending. We then revisit the 1980s caps, and find no evidence of a post-adoption drop (or rise) in spending for these caps.

Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2017; Medicare Advantage Bid Pricing Data Release; Medicare Advantage and Part D Medical Loss Ratio Data Release; Medicare Advantage Provider Network Requirements; Expansion of Medicare Diabetes Prevention Program Model; Medicare Shared Savings Program Requirements. Final rule

This major final rule addresses changes to the physician fee schedule and other Medicare Part B payment policies, such as changes to the Value Modifier, to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute. This final rule also includes changes related to the Medicare Shared Savings Program, requirements for Medicare Advantage Provider Networks, and provides for the release of certain pricing data from Medicare Advantage bids and of data from medical loss ratio reports submitted by Medicare health and drug plans. In addition, this final rule expands the Medicare Diabetes Prevention Program model.

CMS proposal on Part B drugs deserves support

Medicare's first step in reining in the skyrocketing cost of specialty drugs deserves support--something it has not received from hospitals, doctors, politicians or, of course, the pharmaceutical industry, which benefits the most from the status quo.

Medicare Program; Comprehensive Care for Joint Replacement Payment Model for Acute Care Hospitals Furnishing Lower Extremity Joint Replacement Services. Final rule

This final rule implements a new Medicare Part A and B payment model under section 1115A of the Social Security Act, called the Comprehensive Care for Joint Replacement (CJR) model, in which acute care hospitals in certain selected geographic areas will receive retrospective bundled payments for episodes of care for lower extremity joint replacement (LEJR) or reattachment of a lower extremity. All related care within 90 days of hospital discharge from the joint replacement procedure will be included in the episode of care. We believe this model will further our goals in improving the efficiency and quality of care for Medicare beneficiaries with these common medical procedures.

Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2016. Final rule with comment period

This major final rule with comment period addresses changes to the physician fee schedule, and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute.

Patient financial responsibility for observation care

BACKGROUND

As observation care grows, Medicare beneficiaries are increasingly likely to revisit observation care instead of being readmitted. This trend has potential financial implications for Medicare beneficiaries because observation care-although typically hospital based-is classified as an outpatient service. Beneficiaries who are readmitted pay the inpatient deductible only once per benefit period. In contrast, beneficiaries who have multiple care episodes under observations status are subject to coinsurance at every stay and could accrue higher cumulative costs.

OBJECTIVES

We were interested in answering the question: Do Medicare beneficiaries who revisit observation care pay more than they would have had they been readmitted?

DESIGN

We used a 20% sample of the Medicare Outpatient Standard Analytic File (2010-2012) to determine the total cumulative financial liability for Medicare beneficiaries who revisit observation care multiple times within a 60-day period.

PARTICIPANTS

Participants were fee-for-service Medicare beneficiaries who had Part A and Part B coverage for a full calendar year (or until death) during the study period.

MEASUREMENTS

Our primary measure was beneficiary financial responsibility for facilities fees.

RESULTS

On average, beneficiaries with multiple observation stays in a 60-day period had a cumulative financial liability of $947.40 (803.62), which is significantly lower than the $1100 inpatient deductible (P < 0.01). However, 26.6% of these beneficiaries had a cumulative financial liability that exceeded the inpatient deductible.

CONCLUSIONS

More than a quarter of Medicare beneficiaries with multiple observation stays in a 60-day time period have a higher financial liability than they would have had under Part A benefits.

Physician Payment after the SGR--The New Meritocracy

With the Merit-Based Incentive Payment System, Medicare shifts from payment based on macroeconomic indicators to relying on physician- or group-level indicators of cost and quality--and could create a large fee differential between high- and low-performing physicians.

Leap of Faith--Medicare's New Physician Payment System

Medicare's new payment system reflects the movement toward value-based payment, which is built on the view that we can contain costs only by eliminating fee-for-service payment. But there are important problems with this belief and the reforms it inspires.

Medicare Part B Intensity and Volume Offset

Under Medicare Part B, adjustments to the fee schedule are made under the assumption that physicians and hospitals make up for fee reductions through increased service provision called 'volume offsetting'. While historically, researchers have found evidence of volume offsetting, more recent studies have called into question its magnitude and existence. This study is the first to propose and empirically evaluate an alternative hypothesis of offsetting, namely the alteration of billed or provided services as a means of 'intensity offsetting'. Evaluating both forms of offsetting, it finds strong evidence of intensity offsetting and little to no evidence of volume offsetting. Simulating a 10% reduction in the Medicare fee schedule, this study estimates that across different procedures between 22% and 59% of a fee reduction will be offset through alterations in service intensity.

Patient cost sharing and receipt of erythropoiesis-stimulating agents through medicare part D

PURPOSE

Medicare Part D prescription benefits cover injected medications, normally covered under Part B, when administered outside of physician offices. Erythropoiesis-stimulating agents (ESAs) used for chronic anemia management in patients with myelodysplastic syndromes (MDS) are commonly injected in a physician office but can be administered safely at home. In this study, we explored out-of-pocket (OOP) costs and receipt of Part D-covered ESAs in Medicare beneficiaries with MDS.

MATERIALS AND METHODS

Patients with MDS enrolled in Medicare Parts A, B, and D were identified using diagnosis codes from 100% claims from 2006 to 2008. OOP costs for the mean erythropoietin alfa claim were compared for Parts B and D. Multivariable models examined the effect of low-income subsidy (LIS) and other Part D cost sharing on receipt of any ESA and any Part D-covered ESA.

RESULTS

A total of 13,117 (62.9%) of 20,848 patients received ESAs, but only 1,436 (6.9%) had any Part D claim. OOP payment was $348 under Part D versus $161 under Part B. Among patients with ESA use, those with LIS were 4× more likely to receive Part D ESAs (P < .01).

CONCLUSION

Few patients with MDS received ESAs through Part D. OOP payments required under Part D were substantially higher than under Part B. Cost sharing, as reflected by LIS receipt, likely affected decisions to prescribe ESAs outside of the physician office. Improved coordination between Part B and D benefits regarding issues of home injection of medications may create incentives that improve patient access and convenience and reduce costs associated with administration.

Total cost of care lower among Medicare fee-for-service beneficiaries receiving care from patient-centered medical homes

OBJECTIVE

To compare health care utilization and payments between NCQA-recognized patient-centered medical home (PCMH) practices and practices without such recognition.

DATA SOURCES

Medicare Part A and B claims files from July 1, 2007 to June 30, 2010, 2009 Census, 2007 Health Resources and Services Administration and CMS Utilization file, Medicare's Enrollment Data Base, and the 2005 American Medical Association Physician Workforce file.

STUDY DESIGN

This study used a longitudinal, nonexperimental design. Three annual observations (July 1, 2008-June 30, 2010) were available for each practice. We compared selected outcomes between practices with and those without NCQA PCMH recognition.

DATA COLLECTION METHODS

Individual Medicare fee-for-service (FFS) beneficiaries and their claims and utilization data were assigned to PCMH or comparison practices based on where they received the plurality of evaluation and management services between July 1, 2007 and June 30, 2008.

PRINCIPAL FINDINGS

Relative to the comparison group, total Medicare payments, acute care payments, and the number of emergency room visits declined after practices received NCQA PCMH recognition. The decline was larger for practices with sicker than average patients, primary care practices, and solo practices.

CONCLUSIONS

This study provides additional evidence about the potential of the PCMH model for reducing health care utilization and the cost of care.

Cost-sharing, physician utilization, and adverse selection among Medicare beneficiaries with chronic health conditions

Pooled data from the 2007, 2009, and 2011/2012 California Health Interview Surveys were used to compare the number of self-reported annual physician visits among 36,808 Medicare beneficiaries ≥65 in insurance groups with differential cost-sharing. Adjusted for adverse selection and a set of health covariates, Medicare fee-for-service (FFS) only beneficiaries had similar physician utilization compared with HMO enrollees but fewer visits compared with those with supplemental (1.04, p = .001) and Medicaid (1.55, p = .003) coverage. FFS only beneficiaries in very good or excellent health had fewer visits compared with those of similar health status with supplemental (1.30, p = .001) or Medicaid coverage (2.15, p = .002). For subpopulations with several chronic conditions, FFS only beneficiaries also had fewer visits compared with beneficiaries with supplemental or Medicaid coverage. Observed differences in utilization may reflect efficient and necessary physician utilization among those with chronic health needs.