One of the highest priorities for the government in recent years has been to cut medical spending particularly in regards to Medicare and Medicaid. Among the areas targeted for cuts are prescription drugs which cost tens of billions of dollars a year. Of great concern is the way doctors have been compensated for prescriptions administered in office which have traditionally been paid for by giving the doctor back %106 of the cost of the drug. This gave doctors a comfortable %6 profit margin but came with the unfortunate side effect of higher cost drugs were being used when cheaper alternatives, that were also less profitable, were available. But proposed rule changes would help work around that problem by lowering the profit paid over cost to %2.5 while paying a flat fee of $16.50 for each treatment. In addition, patient cost sharing will be eliminated and effectiveness based payments added so that the primary focus is using drugs that best treat the disease. Currently the proposed changes are in a 60 day comment period before any new rules will be formally implemented.
See Jennie L. Phipps, Medicare prods docs to prescribe cheaper drugs, Bankrate, March 15, 2016.
