A demonstration project in which the Centers for Medicare& Medicaid Services hopes to investigate the impact of reimbursement based on Average Sales Prices of drugs is running into strong opposition, as a large number of cancer groups submitted public comments urging the agency to abandon the endeavor.

The agency’s stated goal for tweaking the ASP-based reimbursement formula is to learn whether it gives physicians the incentive to prescribe the most expensive treatments available.

Opponents—including oncology professional groups and pharmaceutical companies—say that experimentation with ASP-based reimbursement, which is currently set at ASP plus 4.3 percent, will make it economically unfeasible for oncology practices to treat Medicare patients. (The Cancer Letter, March 11).

The demonstration project would be implemented in two phases:

• The first phase would involve changing the 6 percent add-on to the Average Sales Price—which is used to make drug payments under Part B—to 2.5 percent plus a flat fee, in a budget-neutral manner.

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