News & Updates

October 23, 2019

Alliance Applauds Wenstrup Amendment to House Drug Pricing Package

Site neutral policies in the Wenstrup Amendment to H.R. 3, the Lower Drug Costs Now Act of 2019, would reduce out-of-pocket prescription drug costs for seniors

WASHINGTON—The Alliance for Site Neutral Payment Reform (Alliance) today expressed support for the amendment offered by Congressman Brad Wenstrup (R-OH) to H.R. 3, the Lower Drug Costs Now Act of 2019. The Wenstrup Amendment contains two provisions to increase transparency and lower out-of-pocket prescription drug costs for seniors.

Section 602 of the Wenstrup Amendment would remove the exception for “grandfathered” off-campus hospital outpatient departments (HOPD), and payment for the professional service of administering a Medicare Part B drug would be made at the physician office rate rather than the HOPD rate beginning January 1, 2021. This provision would have an immediate impact on out-of-pocket costs for seniors, as Medicare beneficiary cost-sharing is directly related to the Medicare payment rate for the drug and the administration of the drug,

Section 601 of the Wenstrup Amendment would update the transparency tool created by the 21st Century Cures Act of 2015 to include information for drug administration services furnished in a physician office. This would help patients better understand the variations in cost by site of care and the impact on their out-of-pocket costs.

The Alliance commends Congressman Wenstrup for his leadership in advancing solutions to lower out-of-pocket costs, enable patients to make more informed healthcare decisions, provide stability to the Medicare program, and end payment disparities that have led to consolidation across the healthcare marketplace.

Currently, costs for physician administration of covered Medicare vaccines and other drugs vary considerably according to the site of service. Hospital outpatient departments (HOPDs) that are exempt from site neutral policies under the Bipartisan Budget Act of 2015 and the 21st Century Cures Act of 2015 are reimbursed at significantly higher rates than independent physician practices for providing the exact same services. For the administration of chemotherapy drugs, for example, the payment to a hospital outpatient facility is more than double the rate paid to a community cancer clinic ($288 vs $143). As a result, patients are paying higher out-of-pocket costs and employers, Medicare, and taxpayers are saddled with increasing costs to the health care system. Higher reimbursement in the HOPD setting has also encouraged hospitals to acquire community-based practices.

The Senate Finance Committee included provisions similar to the Wenstrup Amendment in S. 2543, the Prescription Drug Pricing Reduction Act, which passed the Committee earlier this year.


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