Medicare Payment Data Raises Questions About Drug Costs

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Even though the just-released Medicare data on payments to individual doctors.

Even though the just-released Medicare data on payments to individual doctors

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For example, the information indicates that oncologists and ophthalmologists received some of the highest reimbursement. And CMS notes that these specialty groups are heavy users of Part B-covered prescription drugs, which Medicare pays for as part of its fee to the doctor. The payment formula is set by law at 106% of the average sales price (ASP) for Part B drugs, the 6% intended to cover the cost of delivery, explained CMS principal deputy administrator Jonathan Blum in a press briefing. He acknowledged that the high payments to these providers reflect the high cost of many of the drugs they purchase and administer to patients. A logical question is whether this payment structure encourages doctors to prescribe more costly drugs.

For example, about 3300 ophthalmologists received a total of $3.3 billion for treating age-related macular degeneration, according to analysis by the New York Times. One explanation is that many of these heavy billers make extensive use of

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CMS hopes that disclosure of this payment information will help uncover fraud and waste, as might be the case with doctors ordering excessive numbers of tests or using

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Medicare costs, said Blum, and patient co-pays, which amount to 20% of the cost of Part B drugs.