ACHP Supports Medicare Proposals to Reform Part B Rx Payments

For Immediate Release
May 6, 2016
CONTACT:  Rachel Schwartz
202-785-2247 (office)
202-577-5435 (cell)

The Alliance of Community Health Plans today submitted a comment letter supporting proposals by the Centers for Medicare and Medicaid (CMS) to reform Part B payments for prescription drugs.
“We applaud CMS for taking steps to address unsustainable prescription drug costs,” said Ceci Connolly, president and CEO of the Alliance of Community Health Plans. “These proposals are a reasonable Medicare response to conserve taxpayer money, while ensuring that patients get the appropriate medications.”

Research suggests that the current payment model provides financial incentives for physicians to prescribe more expensive therapies, even if equally effective – or better – treatments exist at a lower price. “Let’s line up incentives on behalf of patients and doctors focusing on the right drug at the right time, instead of their reimbursement levels,” Connolly said.

ACHP reiterated that the greatest responsibility for drug costs lies in unjustified pricing and price increases by the pharmaceutical industry. For example, the rheumatoid arthritis drug Enbrel now costs more than $4,000 for a 30-day supply, an 80 percent increase since 2013. For the typical consumer with a 20 percent copayment, this one drug could cost $240,000 over a lifetime, or more than the price of a home.

ACHP also commended CMS for a set of proposals that would strengthen the tools health plans use to manage utilization and spending on Medicare Part D drugs. These steps reflect recommendations that ACHP had submitted to CMS.

ACHP’s comment letter to CMS highlighted potential unintended consequences of the proposal, particularly to the very popular Medicare Advantage (MA) program. These include: incentives for physicians to prescribe more expensive drugs to their MA patients; higher drug prices for providers and plans with less purchasing clout; and pressure from providers receiving Part B payments under the new formula to raise currently lower fees negotiated by MA plans.

ACHP also recommended that CMS carefully consider those medical conditions for which a lower cost and equally effective alternative may not be available and modify the proposal accordingly. The CMS pilot must include effective monitoring and safeguards to ensure that reducing drug costs in one area does not simply trigger higher costs in another.

Finally, in supporting the test of value-based purchasing approaches in phase II, ACHP underscored the need to identify tools with a sound evidence basis that will improve the effectiveness, safety and quality of physician prescribing patterns for Part B drugs.


About ACHP
The Alliance of Community Health Plans (ACHP) is a national leadership organization bringing together innovative health plans and provider groups that are among America’s best at delivering affordable, high-quality coverage and care. ACHP’s member health plans provide coverage and care for more than 18 million Americans. These 22 organizations focus on improving the health of the communities they serve and are on the leading edge of innovations in affordability and quality of care, including primary care redesign, payment reforms, accountable health care delivery and use of information technology. To learn more about ACHP, go to