CMS announced on December 15, 2016 that it will not pursue its plans to finalize a proposed rule that would have created a pilot program to test a new Medicare Part B prescription drug reimbursement model. CMS explained that while the rule garnered some support, numerous stakeholders “expressed strong concerns” about the proposed reimbursement model. Due to “the complexity of the issues and the limited time available,” CMS determined it would “not finalize the rule at this time.”

The proposed rule was published on March 11, 2016. Under the first phase of the 5-year pilot program that would have been implemented under the proposed rule, CMS proposed to change the current Medicare Part B reimbursement formula for drugs (the average sales price of a drug, plus a 6% add-on) by decreasing the add-on to 2.5% and adding a flat fee payment of $16.80 per drug per day. The flat fee would have increased annually based on the Consumer Price Index. A second phase of the pilot program proposed the adoption of various value-based purchasing mechanisms for medication. All providers and suppliers furnishing and billing for Part B drugs would have been required to participate in the model. Over 1,300 comments were submitted to the proposed rule, and as CMS indicated in its December 15, 2016 statement, many of them were negative.