Medicare hopes to copy the private sector with new payment strategies, according to a Kaiser Health News report.
Over the next year, Medicare is implementing various strategies in select locations. The value-based pricing is designed to slow prescription drug and treatment spending growth. The four concepts Medicare is investigating include:
1. Cutting drug reimbursements for physicians and outpatient hospital centers by changing the current reimbursement formula and cutting the add-on portion to 2.5 percent of the average sales, according to the report. Some physician specialty groups oppose the proposal but patient advocacy groups cautiously support it.
2. Reference pricing to level payments for elective procedures like hip and knee replacement or colonoscopies. The bundled payments for joint replacement set one lump some per procedure, and the providers and patients are at-risk for additional care costs.
3. Another Medicare proposal has drugmakers offering rebates to link the final price of their product to patient outcome results. The results include improved health, fewer hospitalizations and other measures. Medicare would vary the payment based on the condition.
4. Medicare Part B patients are currently responsible for 20 percent of drug costs unless they have supplemental insurance policies covering those payments. Lower copayments could affect which drugs physicians prescribe and encourage patients to stay on their treatments, according to the report.