Community oncologists are suing the Trump administration to stop implementation of its new outpatient drug pay demonstration, which would cut Medicare reimbursement for certain high-spend drugs.
The Community Oncology Alliance argues that CMS’ plan to tie drug payment to foreign prices in Medicare Part B would cause financial hardship for providers, reduce patient access, and reduce pay rates from other payers. The model depends on providers negotiating drugmakers’ prices down to meet reduced reimbursement levels.
“Defendants’ wrongful acts compromise access to cancer care for seniors who will not be able to be treated by their oncologists, with a significant number of seniors having to forgo treatment altogether, or being unable to find or afford treatment when their local community oncology practice is forced to absorb losses causing the practice to shut down or join a more expensive hospital,” the complaint states.
The lawsuit reiterates criticism of the administration’s decision to issue a final rule without a public comment period and the demonstration’s mandatory nature. The case was filed in the U.S. District Court for the District of Columbia.
“It’s just mind-boggling that they would create a deficit of care where there isn’t one,” COA Executive Director Ted Okon said.
The administration estimated the rule could save the federal government and beneficiaries more than $80 billion over seven years, but some of the savings will come from reduced beneficiary access. If drugmakers don’t lower their prices, then some providers may choose to not administer certain drugs at a loss, thus reducing access.
The administration is already facing an onslaught of litigation from the healthcare industry. Two prominent groups representing drugmakers, the Biotechnology Innovation Organization and Pharmaceutical Research and Manufacturers of America, have sued as well. PhRMA on Thursday filed a motion for a preliminary injunction to stop the rule from going into effect. The model is supposed to start Jan. 1, 2021 and phase in over four years.
The American Hospital Association is not planning to pursue its own litigation at this time, a spokesperson said, but submitted a declaration underscoring potential harm to hospitals in the case brought by PhRMA.