This document is scheduled to be published in the
Federal Register on 10/04/2017 and available online at
https://federalregister.gov/d/2017-21420, and on FDsys.gov

CMS-1670-WN
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 511
[CMS-1670-WN]
RIN 0938-AS85
Medicare Program; Part B Drug Payment Model; Withdrawal
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Withdrawal of proposed rule.
SUMMARY: This document withdraws a proposed rule that was published in the
Federal Register on March 11, 2016. The proposed rule discussed our proposal to
implement a new Medicare payment model under section 1115A of the Social Security
Act (the Act).
DATES: As of [Insert date of publication in the Federal Register], the proposed rule
published March 11, 2016, at 81 FR 13230, is withdrawn.
FOR FURTHER INFORMATION CONTACT: Rasheeda Johnson, (410) 786-3434.
SUPPLEMENTARY INFORMATION: On March 11, 2016, we published a proposed
rule in the Federal Register entitled “Medicare Program; Part B Drug Payment Model”
(81 FR 13230). The rule proposed the Part B Drug Payment Model as a two-phase model
that would test whether alternative drug payment designs will lead to a reduction in
Medicare expenditures, while preserving or enhancing the quality of care provided to
Medicare beneficiaries. In the first phase, CMS would test a change to the 6 percent addon to Average Sales Price (ASP) that is used to make drug payments under Part B such

 CMS-1670-WN
that the add-on would be 2.5 percent plus a flat fee (in a budget neutral manner). In the
second phase, we would implement a collection of value-based purchasing tools similar
to those employed by commercial health plans, pharmacy benefit managers, hospitals,
and other entities that manage health benefits and drug utilization. We proposed to
operate the model for 5 years; phase I would begin in the fall of 2016 (no earlier than 60
days after the rule was finalized), and phase II would begin no sooner than January 1,
2017. The proposed goal was to have both phases of the model in full operation during
the last 3 years of the proposed 5-year duration to fully evaluate changes and collect
sufficient data.
We received 1,350 timely public comments in response to the March 11, 2016,
proposed rule. Some commenters signaled their support for the proposed rule, however,
a number of commenters expressed concerns about the proposed model. As we worked
to address these concerns, the complexity of the issues related to the proposed model
design and the desire to increase stakeholder input led us to the decision to withdraw the
March 11, 2016 proposed rule. Moving forward, we want to ensure agency flexibility in
re-examining these important issues and exploring new options and alternatives with
stakeholders as we develop potential payment models that support innovative approaches
to improve quality, accessibility, and affordability, reduce Medicare program
expenditures, and empower patients and doctors to make decisions about their health
care.
Accordingly, the proposed rule published March 11, 2016, at 81 FR 13230, is
withdrawn.

 CMS-1670-WN
Dated: July 17, 2017.
__________________________________
Seema Verma,
Administrator,
Centers for Medicare & Medicaid Services.

Dated: August 25, 2017.

__________________________________
Thomas E. Price,
Secretary,
Department of Health and Human Services.

BILLING CODE 4120-01-P
[FR Doc. 2017-21420 Filed: 10/3/2017 8:45 am; Publication Date: 10/4/2017]