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Under the Inflation Reduction Act (IRA), provider reimbursement for Part B drugs will change from being tied to “average sales price” (ASP) to “maximum fair prices” for drugs selected for the Medicare Drug Price Negotiation Program (MDPNP). The National Infusion Center Association (NICA) commissioned Milliman to quantify the potential impact of the IRA and its changes on Medicare Part B reimbursement, and to evaluate the potential implications for providers and patients. NICA is a nonprofit trade association formed to support community-based infusion centers caring for patients in need of provider‑administered medications. This analysis excludes oncology drugs and focuses on non-oncology therapies, which are most relevant to NICA’s core membership.
We analyzed the financial impact of changes in Part B reimbursement resulting from MDPNP enacted by the IRA, as well as the impact of an alternative scenario in which the Protecting Patient Access to Cancer and Complex Therapies Act (PACTA) is enacted. We modeled a 10-year window, beginning in 2028, which is the initial year Part B drugs are eligible for the MDPNP. This report also discusses how the resulting reimbursement changes could influence provider behavior and, in turn, patient access to care.
We estimate the changes will decrease Part B provider reimbursement for non-oncology drugs by $9.2 billion, or 16.1% of net cost recoveries (NCR), over 10 years. Providers would experience a reduction in reimbursement of $200 million, or 0.3% of NCR, over 10 years, driven by changes in the portion of costs subject to sequestration. PACTA would essentially be a technical fix to restore provider reimbursement back to ASP-based pre-IRA levels, funded by a manufacturer rebate model that maintains MDPNP program savings.
Key discussion points include the following.
- Background: Key aspects of the historical, current, and proposed payment structures for selected Part B drugs prior to sequestration
- Analysis: Results by geography and provider type
- Behavior impacts: Provider consolidation and potential implications for patients
This report was commissioned by the National Infusion Center Association.