CMS Announces Big Increase in Part B Premiums Due to Aduhelm Expected Costs, Rescinds MCIT Final Rule

Last week, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that included changes to the physician fee schedule (PFS) and changes to payments for Medicare Part B. The agency also announced an increase in Part B beneficiary premiums due in part to the authorization of the controversial Alzheimer’s drug Aduhelm, which is estimated to cost $56,000 per person per year. Additionally, CMS rescinded the Medicare Coverage of Innovative Technology (MCIT) final rule in what it described as an attempt to improve the coverage process for access to innovative medical devices.

The Medicare Part B standard monthly premium will rise from $148.50 per month to $170.10 per month in 2022. The 2022 Medicare Parts A and B premiums, deductibles and coinsurance amounts are projected to reflect a 5.9% cost-of-living adjustment for beneficiaries’ 2022 Social Security benefits, according to a CMS press release on the premium adjustments. Medicare Part B covers physician services, outpatient hospital services, home health services, durable medical equipment and other services not covered by Medicare Part A.

Roughly half of the monthly premium increase reflects contingency planning by the agency to make sure the Part B program can pay for the expensive new Alzheimer’s drug Aduhelm, made by the company Biogen. The drug has come under fire following approval for use in the treatment of Alzheimers by the Food and Drug Administration (FDA), due to doubts from experts about its effectiveness, the Hill reports.

A CMS Fact Sheet on the changes also points to rising prices and utilization of products and services throughout the healthcare system as driving year-over-year costs. Part B monthly premiums are based on beneficiaries’ income and whether or not the beneficiary is married and lives with a spouse. The Part A inpatient hospital deductible amount will also increase from $1,484 for the year to $1,556.

CMS also issued a final rule to the PFS that include a net reduction in the PFS conversion factor of $1.30 and changes to policies for split evaluation and management (E/M) visits, critical care services and services furnished by teaching physicians. A summary of the technical changes to billing policies can be found at JDSupra.

Last Friday, CMS rescinded the Medicare Coverage of Innovative Technology and Definition of “Reasonable and Necessary” (MCIT/R&N), citing concerns that the provisions in the final rule were unsuitable to protect Medicare patients. From CMS Administrator Chiquita Brooks-LaSure via CMS Press Release:

Although we continue to be in favor of enhancing access to new technologies, we are mindful that they may have unknown or unexpected risks and must first ensure such technologies improve health outcomes for Medicare beneficiaries. The Medicare program needs to implement policies that balance access and appropriate safeguards.

According to Medical Design and Outsourcing, the rule would have allowed government payments for medical devices designated as “breakthroughs” by the FDA. The pathway was created under the Trump administration and put on hold by the Biden administration for consideration. In September, CMS announced it would not move forward with the rule and last week’s announcement puts the final nail in the MCIT coffin. From CMS Chief Medical Officer and Director for the Center for Clinical Standards and Quality, Dr. Lee Fleisher:

CMS is committed to coverage that provides an appropriate balance of support for innovation with necessary protections for Medicare patients. Under the rule we are repealing, CMS may have covered devices without adequate evidence to demonstrate that the device would be reasonable and necessary to diagnose or treat the Medicare population for particular medical conditions.