Oncology Value Watchdog: What the Medicare Part B Reimbursement Model Means for Patients

Posted by Christina Corridon on Apr 25, 2016 11:41:32 AM


On March 8, 2016, the Centers for Medicare and Medicaid Services (CMS) proposed to test a new Medicare Part B reimbursement model in a “lottery” of sorts, with the goal of delivering more value-driven care. The current incentives for prescribing a Part B drug allow the provider to make a margin of 6% of the average selling price (ASP) of the therapy. For an oncology drug that is infused weekly and costs $10,000 per month, that means $600 of margin per month for the provider. And the more expensive the drug, the higher the margin amount. (Not surprisingly, cancer drugs made up 42.1% of all Medicare Part B spend in 2014, according to CMS.) Under the new model being piloted by CMS, practices that “win” the lottery will now be reimbursed at ASP plus 2.5% and a flat rate payment of $16.80 per treatment, according to the Department of Health and Human Services. So that same $10,000 drug will now only yield $317.20 to the provider—about half of the $600 that they make today. After sequestration, that amount is reduced even further to $152.12.


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Overcoming Barriers to Effective Sales Comp Planning for Oncology Launches

Posted by Christina Corridon on Mar 28, 2016 8:00:00 AM

ZS sales compensation expert Mike Martin recently wrote about the challenge of structuring sales compensation plans for oncology product launches in the face of imperfect data, previewing an article called “Reaching the Highest Peak: Four practices for designing a fair and motivating sales comp plan for oncology launch.” While it’s difficult to design an effective sales compensation plan amid data uncertainty, it can be done—and as Mike mentions here, there are some viable approaches.


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