Medicare Part D payments for neurologist-prescribed drugs.
Ontology highlight
ABSTRACT:
SUBMITTER: De Lott LB
PROVIDER: S-EPMC4836880 | biostudies-other | 2016 Apr
REPOSITORIES: biostudies-other
Publications
Medicare Part D payments for neurologist-prescribed drugs.
De Lott Lindsey B LB De Lott Lindsey B LB Burke James F JF Kerber Kevin A KA Skolarus Lesli E LE Callaghan Brian C BC
Neurology 20160323 16
<h4>Objective</h4>To describe neurologists' Medicare Part D prescribing patterns and the potential effect of generic substitutions and price negotiation, which is currently prohibited.<h4>Methods</h4>The 2013 Medicare Part D Prescriber Public Use and Summary files were used. Payments for medications were aggregated by provider and drug (brand or generic). Payment, proportion of generic claims or day's supply, and median payment per monthly supply of medication were calculated by physician specia ...[more]
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Project description:ImportanceRising pharmaceutical costs in the United States are an increasing source of financial burden for payers and patients. Although topical steroids are among the most commonly prescribed medications in dermatology, there are limited data on steroid-related spending and utilization.ObjectiveTo characterize Medicare and patient out-of-pocket costs for topical steroids, and to model potential savings that could result from substitution of the cheapest topical steroid from the corresponding potency class.Design, setting, and participantsThis study was a retrospective cost analysis of the Medicare Part D Prescriber Public Use File, which details annual drug utilization and spending on both generic and branded drugs from 2011 to 2015 by Medicare Part D participants who filled prescriptions for topical steroids.Main outcomes and measuresTotal and potential Medicare and out-of-pocket patient spending. Costs were adjusted for inflation and reported in 2015 dollars.ResultsMedicare Part D expenditures on topical steroids between 2011 and 2015 were $2.3 billion. Patients' out-of-pocket spending for topical steroids over the same period was $333.7 million. The total annual spending increased from $237.6 million to $775.9 million, an increase of 226.5%. Patients' annual out-of-pocket spending increased from $41.4 million to $101.8 million, an increase of 145.9%. The total number of prescriptions were 7.7 million in 2011 and 10.6 million in 2015, an increase of 37.0%. Generic medication costs accounted for 97.8% of the total spending during this time period. The potential health care savings and out-of-pocket patient savings from substitution of the cheapest topical steroid within the corresponding potency class were $944.8 million and $66.6 million, respectively.Conclusions and relevanceMost topical steroids prescribed were generic drugs. There has been a sharp increase in Medicare and out-of-pocket spending on topical steroids that is driven by higher costs for generics. Use of clinical decision support tools to enable substitution of the most affordable generic topical steroid from the corresponding potency class may reduce drug expenditures.
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Project description:Policy Points Only a small minority of new drugs in "nonprotected" classes are widely covered by Part D plans nationwide in the year after US Food and Drug Administration (FDA) approval. Part D plans frequently apply utilization management restrictions such as prior authorizations to newly approved drugs in both protected and nonprotected classes. Drug price influences both formulary inclusion (in nonprotected classes) and coverage restrictions (in both protected and nonprotected classes), while other drug characteristics such as therapeutic benefits are not consistently associated with formulary design. Plans do not seem to favor the minority of drugs that are determined to offer added therapeutic benefit over existing alternatives.ContextMedicare Part D is an outpatient prescription drug benefit for older Americans covering more than 46 million beneficiaries. Except for mandatory coverage for essentially all drugs in six protected classes, plans have substantial flexibility in how they design their formularies: which drugs are covered, which drugs are subject to restrictions, and what factors determine formulary placement. Our objective in this paper was to document the extent to which Part D plans limit coverage of newly approved drugs.MethodsWe examined the formulary design of 4,582 Part D plans from 2014 through 2018 and measured (1) the decision to cover newly approved drugs in nonprotected classes, (2) use of utilization management tools in protected and nonprotected classes, and (3) the association between plan design and drug-level characteristics such as 30-day cost, therapeutic benefit, and the US Food and Drug Administration (FDA) expedited regulatory pathway.FindingsThe FDA approved 109 new drugs predominantly used in outpatient settings between 2013 and 2017. Of these, 75 fell outside of the six protected drug classes. One-fifth of drugs in nonprotected classes (15 out of 75) were covered by more than half of plans during the first year after approval. Coverage was often conditional on utilization management strategies in both protected and nonprotected classes: only seven drugs (6%) were covered without prior authorization requirements in more than half of plans. Higher 30-day drug costs were associated with more widespread coverage in nonprotected classes: drugs that cost less than $150 for a 30-day course were covered by fewer than 20% of plans while those that cost more than $30,000 per 30 days were covered by more than 50% of plans. Plans were also more likely to implement utilization management tools on high-cost drugs in both protected and nonprotected classes. A higher proportion of plans implemented utilization management strategies on covered drugs with first-in-class status than drugs that were not first in class. Other drug characteristics, including availability of added therapeutic benefit and inclusion in FDA expedited regulatory approval, were not consistently associated with plan coverage or formulary restrictions.ConclusionsNewly approved drugs are frequently subject to formulary exclusions and restrictions in Medicare Part D. Ensuring that formulary design in Part D is linked closely to the therapeutic value of newly approved drugs would improve patients' welfare.
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Project description:ImportancePrescription drug spending in the US requires policy intervention to control costs and improve the value obtained from pharmaceutical spending. One such intervention is to apply cost-effectiveness evidence to decisions regarding drug coverage and pricing, but this intervention depends on the existence of such evidence to guide decisions.ObjectiveTo characterize the availability and quality of cost-effectiveness studies for prescription drugs with the greatest Medicare Part D spending.Design, setting, and participantsIn this national cross-sectional analysis, publicly available 2016 Medicare drug spending records were merged with 2016 US Food & Drug Administration Orange Book data and the Tufts Medical Center Cost-Effectiveness Analysis (CEA) Registry. All studies published through 2015 that evaluated the cost-effectiveness of the 250 drugs for which Medicare Part D spending was the greatest in US-based adult patient populations were included. Data were analyzed from September 2018 to June 2020.Main outcomes and measuresThe presence and quality of published cost-effectiveness analyses for the 250 drugs for which Medicare Part D spending was greatest in 2016 were assessed based on the inclusion of key cost-effectiveness analysis elements and global ratings by independent reviewers for the Tufts CEA Registry.ResultsMedicare Part D spending on the 250 drugs in the sample totaled $122.8 billion in 2016 (84.1% of total spending). Of these 250 drugs, 91 (36.4%) had a generic equivalent and 159 (63.6%) retained some patent exclusivity. There were 280 unique cost-effectiveness analyses for these drugs, representing data on 135 (54.0%) of the 250 drugs included and 67.0% of Part D spending on the top 250 drugs. The 115 drugs (46.0%) without cost-effectiveness studies accounted for 33.0% of Part D spending on the top 250 drugs. Of the 280 available studies, 128 (45.7%) were industry sponsored. A large proportion of the studies (250 [89.3%]) did not meet the minimum quality requirements.Conclusions and relevanceIn this cross-sectional study, a substantial proportion of 2016 Medicare Part D spending was for drugs with absent or low-quality cost-effectiveness analyses. The lack of quality analyses may present a challenge in efforts to develop policies addressing drug spending in terms of value.
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Project description:Prior to 2010, Medicare payments for consultations (commonly billed by specialists) were substantially higher than for office visits of similar complexity (commonly billed by primary care physicians). In January 2010, Medicare eliminated consultation payments from the Part B Physician Fee Schedule and increased fees for office visits. This change was intended to be budget neutral and to decrease payments to specialists while increasing payments to primary care physicians. We assessed the impact of this policy on spending, volume, and complexity for outpatient office encounters in 2010.We examined outpatient claims from 2007 through 2010 for 2 247 810 Medicare beneficiaries with Medicare Supplemental (Medigap) coverage through large employers in the Thomson Reuters MarketScan Database. We used segmented regression analysis to study changes in spending, volume, and complexity of office encounters adjusted for age, sex, health status, secular trends, seasonality, and hospital referral region."New" office visits largely replaced consultations in 2010. An average of $10.20 more was spent per beneficiary per quarter on physician encounters after the policy (6.5% increase). The total volume of physician encounters did not change significantly. The increase in spending was largely explained by higher office-visit fees from the policy and a shift toward higher-complexity visits to both specialists and primary care physicians.The elimination of consultations led to a net increase in spending on visits to both primary care physicians and specialists. Higher prices, partially owing to the subjectivity of codes in the physician fee schedule, explained the spending increase, rather than higher volumes.
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Project description:ObjectiveLittle is known about how neurology payments vary by service type (i.e., evaluation and management [E/M] vs tests/treatments) and compare to other specialties, yet this information is necessary to help neurology define its position on proposed payment reform.MethodsMedicare Provider Utilization and Payment Data from 2012 were used. These data included all direct payments to providers who care for fee-for-service Medicare recipients. Total payment was determined by medical specialty and for various services (e.g., E/M, EEG, electromyography/nerve conduction studies, polysomnography) within neurology. Payment and proportion of services were then calculated across neurologists' payment categories.ResultsNeurologists comprised 1.5% (12,317) of individual providers who received Medicare payments and were paid $1.15 billion by Medicare in 2012. Sixty percent ($686 million) of the Medicare payment to neurologists was for E/M, which was a lower proportion than primary providers (approximately 85%) and higher than surgical subspecialties (range 9%-51%). The median neurologist received nearly 75% of their payments from E/M. Two-thirds of neurologists received 60% or more of their payment from E/M services and over 20% received all of their payment from E/M services. Neurologists in the highest payment category performed more services, of which a lower proportion were E/M, and performed at a facility, compared to neurologists in lower payment categories.ConclusionE/M is the dominant source of payment to the majority of neurologists and should be prioritized by neurology in payment restructuring efforts.
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