COA warns Medicare drug negotiations could squeeze community cancer care

The Community Oncology Alliance is urging CMS and Congress to change how Medicare’s drug price negotiations will apply to physician-administered Part B cancer drugs in 2028. COA says the current approach could cut reimbursements, strain independent oncology practices and push more care into higher-cost hospital settings.

Why it matters: - Community oncology practices say the Medicare Drug Price Negotiation Program could weaken the financial model that keeps cancer treatment available close to home. - COA warns that reimbursement cuts and added administration could force practices to reduce services, consolidate or close. - The group says patient access could shift toward more expensive hospital settings if the policy is implemented without changes.

What happened: - The Community Oncology Alliance filed comments with the Centers for Medicare & Medicaid Services on how to implement the Medicare Drug Price Negotiation Program’s Maximum Fair Price for physician-administered Part B drugs. - COA is asking CMS to fix what the group calls fundamental problems before negotiated Part B prices take effect in 2028. - Debra Patt, COA president, said physicians and patients should not be stuck between Medicare and drug manufacturers. - COA says it supports lower drug costs for Medicare beneficiaries but opposes the current implementation framework for Part B drugs.

The details: - Under Medicare’s buy-and-bill model, community oncology practices purchase cancer drugs and are generally reimbursed at Average Sales Price plus 6%. - COA says that add-on payment helps cover the clinical and operational infrastructure needed for complex cancer treatment. - Beginning in 2028, the add-on payment for negotiated drugs would be based on Maximum Fair Price, which COA says is expected to be well below Average Sales Price for many selected drugs. - COA says including Maximum Fair Price transactions in Average Sales Price calculations could pull down Average Sales Price itself and reduce reimbursement across Medicare, Medicare Advantage and commercial insurance. - An Avalere analysis found Medicare fee-for-service add-on payments for three oncology and hematology drugs could fall 39% to 64%. - The same analysis estimated $12 billion to $19 billion in lost oncology and hematology add-on payments across Medicare and commercial markets from 2028 through 2032. - Ted Okon, COA’s executive director, said the reimbursement changes could be large enough to push some practices away from providing certain therapies. - COA says CMS’s proposed effectuation process could force practices to manage different manufacturer systems to access negotiated prices or wait for retrospective refunds after buying drugs. - COA says that would create cash-flow risk, reconciliation problems and more administrative work for practices that manage millions of dollars in drug inventory. - COA’s preferred fix is to keep reimbursing providers at Average Sales Price plus 6% and have manufacturers send the difference between Average Sales Price and Maximum Fair Price directly to Medicare. - COA says that structure would preserve Medicare savings while keeping physicians and patients out of the middle. - COA is backing the bipartisan Protecting Patient Access to Cancer and Complex Therapies Act, H.R. 4299. - COA is also asking CMS to use existing authority to stop Maximum Fair Price transactions from reducing Average Sales Price. - COA wants practices to be able to access selected drugs at Maximum Fair Price, receive prompt reconciliation when refunds are retroactive and avoid new administrative burdens. - The group says a link to its full comments is available here: COA’s full comments.

Between the lines: - COA is not rejecting drug-price negotiation itself. - The dispute is over who handles the discount, when the savings are realized and whether practices have to front the money. - The group is arguing that a policy designed to cut drug costs could unintentionally weaken the local providers most responsible for delivering those treatments.

What's next: - CMS will continue shaping the 2028 effectuation guidance for Maximum Fair Price on Part B drugs. - Congress could act on H.R. 4299 if lawmakers decide the statutory framework needs a fix. - COA is urging action before negotiated Part B prices begin in 2028.

The bottom line: - COA says Medicare can save money on cancer drugs without putting community oncology practices and patients in the middle of the negotiation process.