Medicare to test new payment model for some outpatient drugs

Staff Writer
Columbus CEO

WASHINGTON (AP) — Medicare is proposing new ways to pay for drugs administered in a doctor's office, including many chemotherapy medications.

Chief Medical Officer Patrick Conway said Tuesday that Medicare plans to begin testing its new approach later this year.

The government won't be telling doctors which drugs to prescribe.

Instead, the goal is to address financial incentives in the current payment system that can encourage the use of a more expensive drug, when a cheaper medication is just as effective.

Drugs administered in a doctor's office or outpatient hospital department cost Medicare about $20 billion in 2015, a fraction of what the program spends on prescription medications.

If the testing shows that new payment rules can maintain or improve quality and curb spending, permanent changes could follow across the country.