Medicare program; changes to Medicare payment for drugs and physician fee schedule payments for calendar year 2004. Interim final rule with comment period.
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This interim final rule implements the provisions of the Medicare Prescription Drug, Improvement, and Modernization Act (MPDIMA) of 2003, Pub. L. 108-173, which are applicable in 2004 to Medicare payment for covered drugs and physician fee schedule services. These provisions revise the current payment methodology for Part B covered drugs and biologicals that are not paid on a cost or prospective payment basis; make changes to Medicare payment for furnishing or administering drugs and biologicals; revise the geographic practice cost indices and change the physician fee schedule conversion factor. The 2004 physician fee schedule conversion factor will be $37.3374. The 2004 national anesthesia conversion factor (prior to making adjustment for the geographic practice cost indices) will be $17.4969. The information contained in this final rule related to payment under the physician fee schedule supercedes the information contained in the November 7, 2003, final rule to the extent that the two are inconsistent. All other provisions of the November 7, 2003, final rule are unchanged unless otherwise noted. This rule also extends the "opt-out" provisions of 1802(b)(5)(3) of the Social Security Act to dentists, podiatrists, and optometrists. (+info)
Clinical and economic consequences of a reimbursement restriction of nebulised respiratory therapy in adults: direct comparison of randomised and observational evaluations.
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OBJECTIVE: To compare the results of a randomised and an observational evaluation of the same policy that restricted reimbursement for nebulised respiratory medications in adult patients in a community setting. DESIGNS: Cluster randomised controlled trial and observational time series with historical controls. SETTING: Pharmacare, the government funded drug benefits plan for elderly people and patients receiving social assistance in British Columbia, Canada. PARTICIPANTS: In the randomised controlled trial 104 clusters of medical practices, pair matched by geography and approximately by practice size, were randomised to the intervention group (449 patients affected by the policy on 1 March 1999), and the control group (offered a six month exemption, affecting 386 patients). The observational analysis included all Pharmacare beneficiaries (excluding the 386 exempt patients) who had used any nebulised drugs six months before the policy (4624 patients). INTERVENTION: Pharmacare restricted reimbursement for nebulised bronchodilators, steroids, and cromoglycate to patients whose doctors applied for an individual patient's exemption, giving an appropriate clinical reason. MAIN OUTCOME MEASURES: Number of contacts with doctors and services, emergency admissions to hospital, and utilisation of and expenditure for respiratory drugs in databases of British Columbia's Ministry of Health. RESULTS: Contacts with doctors or emergency admissions to hospital did not increase in association with the restriction, regardless of the analytical approach. In the observational analysis, we found a reduction of C24 dollars per patient month in all nebulised drug use (95% confidence interval 19 to 29) and an increase of C3 dollars per patient month in all expenditure for inhalers (1.4 to 4.5). The randomised evaluation found savings of C8 dollars per patient month for nebulisers (P = 0.24) and no increase in spending on inhalers (P = 0.79). Correcting for 60% non-compliance by exempt doctors in a sensitivity analysis yielded similar results as the observational evaluation. CONCLUSIONS: Observational as well as randomised analyses found moderate net savings and no increase in unintended healthcare outcomes after restricting reimbursement for nebulised respiratory drugs. Randomised policy trials are feasible and, if carefully implemented, likely to be concordant with observational evaluations. (+info)
How much should Medicare pay for drugs?
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Discussions of the Medicare drug benefit have focused more on what beneficiaries will pay than what pharmaceutical manufacturers will receive. A key choice is the degree to which Medicare must become involved in setting manufacturers' prices. If prices must be set, Medicare could do so using average wholesale price, comparison with prices in other markets, cost, or rate-of-return regulation. Because all four methods have substantial drawbacks, Medicare should not initially attempt to set prices, but to prevent abuses in pricing, Congress should allow cost to be considered in coverage decisions. (+info)
Unique issues raised by drug benefit design.
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In this Perspective on the preceding paper by Joseph Newhouse, I point out a number of features of the pharmaceutical industry that differentiate it from other health care sectors. These differences help explain why it has proved to be so very difficult to construct policies that simultaneously contain health care costs, provide patients with high-quality care, and generate continued incentives for innovation. I then summarize Newhouse's preferred Medicare prescription drug benefit program and the issues it raises. (+info)
Medicare drug coverage and moral hazard.
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This paper explores the effect of more extensive drug coverage in Medicare on the use of and spending for prescription drugs and considers whether any additional use is likely to represent satisfaction of previously unmet needs or whether it represents yet more overuse. Reasonable estimates of the effect on spending strongly suggest that the spending increase will be small and that some of it will go to beneficiaries who do not face high financial barriers at present. Thus, from the viewpoint of improvements in health, national spending on drugs, or pharmaceutical firm revenues, effects are small. The effects of such programs on Medicare's fiscal future are much more important. (+info)
Benefits and risks of increasing restrictions on access to costly drugs in Medicaid.
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States are reacting to increased Medicaid drug costs by implementing cost-control policies, such as preferred drug lists (PDLs) and prior authorization. PDLs have risks as well as benefits. Targeting essential drug classes with heterogeneous patient responses and side effects could reduce appropriate care, adversely affect health status, and cause shifts to more costly types of care. Assessing inappropriate use of high-cost drugs before implementing regulations and instituting simple mechanisms to exempt high-risk patients could maximize savings and minimize harm. The current exponential growth in such policies and the limited evidence base justifies investment in research to identify which policies can achieve savings without unintended consequences. (+info)
The changing face of pharmacy benefit design.
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Employers, health plans, and pharmacy benefit managers-seeking to reduce rapid growth in pharmacy spending-have embraced multi-tier pharmacy benefit packages that use differential copayments to steer beneficiaries toward low-cost drugs. The consensus of fifteen pharmacy benefit design experts whom we interviewed is that such plans will become more prevalent and that the techniques these plans use to promote low-cost drugs will intensify. The effect on health outcomes depends on whether the high-cost drugs whose use is being discouraged have close, low-cost substitutes. (+info)
Physicians' views of formularies: implications for Medicare drug benefit design.
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As Congress considers introducing a drug benefit for Medicare, it will more than likely adopt a program that uses a formulary. We examined data from the Community Tracking Study Physicians Survey, a large, nationally representative study of physicians, to learn about physicians' views of formularies. Our results suggest that several aspects of formularies are associated with physicians' positive views about them. Policymakers should consider imposing limits on the number of competing Medicare formularies operating in a particular area, promoting the adoption and use of information technology, and incorporating financial incentives for physicians to adhere to formularies. (+info)