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Future of Medicare Part B Payment Demo Under Republican Held Congress

There has been much controversy over the Medicare Part B payment demonstration proposed by the Center for Medicare and Medicaid Innovation (CMMI) in March 2016.  As we await the release of the final rule, the fate of this demonstration will be in the hands of a Republican-held Congress and President-Elect Trump.  To move forward, not only will CMMI need to finalize the implementing regulations, but the Part B payment demonstration will also need to survive review under the Congressional Review Act (CRA).

CMS proposed the Part B payment demonstration to align payment incentives with the promotion of high quality and cost-effective purchasing of Part B drugs.  The demonstration, as proposed, is to be implemented in two phases. The first phase would update the payment methodology for Part B drugs.  Currently, Medicare pays providers Average Sales Price (ASP) plus a 6% add-on fee for Part B drugs.  Phase one of the demonstration would update the pricing such that providers will be paid ASP plus 2.5% and a flat fee of $16.80.  The second phase would involve the use of one or more value-based purchasing tools with the goal of testing approaches that would shift the market from a volume-based payment system to one based on improving patient outcomes.

As mentioned in previous blogs, the Part B payment demonstration has been criticized by patient and physician groups and has been in hot water on Capitol Hill.  It was one of the demonstrations targeted by Representative Tom Price in his letter condemning CMMI’s authority.  It has also received criticism from members of the Senate Finance Committee and leading House Republicans, including, Rep. John Shimkus, one of the leading candidates for Chairman of the Energy & Commerce Committee.

The CRA requires federal agencies to submit a copy of final regulations to Congress for review.  Congress then has 60 session days to introduce a joint resolution of disapproval for all major rules.  The President has the opportunity to veto the joint resolution, and if vetoed, Congress has 30 session days to override the veto.

Even if the Part B payment demonstration rule is finalized before the end of 2016, it will be subject to a review period in 2017 by a Republican-controlled Congress and President Trump.  In fact, as a result of the CRA, many of the agency rules promulgated in the last six months can be revisited by Congress.  Should CMS actually move to finalize the demonstration, a Republican-controlled Congress could nullify this rule shortly after its release.  Accordingly, the likelihood of the Part B payment demonstration coming to fruition appears to be extremely low.

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume VI, Number 334


About this Author

Theresa Carnagie, Health Law Attorney, MIntz Levin Law Firm

Theresa counsels health care clients on a variety of transactional, regulatory, and fraud and abuse matters.

Theresa focuses much of her practice on counseling health plans, pharmacy benefit managers, pharmacies, device manufacturers, and distributors on regulatory and compliance matters. Her practice extends to counseling on drug pricing and reimbursement issues, Medicare Advantage and Medicare Part D compliance, and the regulatory requirements under the Affordable Care Act and state health insurance exchanges. Theresa has extensive experience...

Eli Greenspan ML Strategies Mintz
Manager of Government Relations

Prior to joining ML Strategies, Eli was a legislative correspondent for US Senator Martin Heinrich (D-NM), where his experience included health care, education, child welfare, social security, food assistance, and poverty issues specifically as they relate to the Affordable Care Act, Medicare, and Social Security. Previously, Eli served as a legislative intern with Senator Heinrich. He also served as a legislative intern with Senator Dick Durbin (D-IL), where he worked on issues related to education, health, and commerce. Eli has also served as an intern at a political fundraising and strategy firm in Chicago.

Outside of politics, Eli was the founder of MLB Daily Dish, a blog devoted to Major League Baseball. He also was the lead sports writer for ChicagoNow’s Down on the Farm, where he covered the Cubs and White Sox minor league teams.

Lauren Moldawer, healthcare, health, attorney, CMS, Mintz Levin, law firm

Lauren's practice focuses on advising health care providers, PBMs, and managed care organizations on a variety of regulatory issues.*

Prior to joining the firm, Lauren* worked at the Centers for Medicare & Medicaid Services (CMS) in the Medicare-Medicaid Coordination Office. In this role, she worked with states and health plans implementing the Financial Alignment Demonstration, which is a CMS initiative that seeks to better integrate Medicare and Medicaid services for dual-eligible individuals. Prior to her tenure with CMS, she was a...