Obama administration abandons controversial Medicare drug payment experiment

Obama administration abandons controversial Medicare drug payment experiment

Bowing to increasing pressure from physicians and pharmaceutical groups, the Obama administration has decided to abandon a controversial proposal designed to overhaul how Medicare reimburses physicians for drugs.

The withdrawn proposal was an attempt to improve health care and discourage spending on expensive medicines. In Medicare Part B, doctors are currently paid 6 per cent on drugs' average wholesale prices. The proposal aimed at lowering that percentage, and adding a flat fee.

It aimed at decreasing the financial incentive for doctors to prescribe more-expensive drugs/medicines, but doctors argued that they would lose under the proposal. The American Medical Association (AMA) and the Pharmaceutical Research & Manufacturers of America mounted severe opposition to the proposal.

Praising the Obama administration's decision to abandon the proposal, AMA President Dr. Andrew Gurman said, "We are grateful that CMS [Centers for Medicare and Medicaid Services, came to the right decision."

Andy Slavitt, acting administrator at CMS, said that the upcoming Trump administration should learn a lesson from the collapse of the proposed measure as Mr. Trump has also vowed to address the issue of rising drug costs.

As doctors and the pharmaceutical industry are "dead set against" such proposals, it will likely take a lot of work and stamina for the new administration to get through.


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