Responding to Medicare’s Proposal to Decrease the Average Sales Price

Kyle C. Harner, MD
Managing Partner
Carolina Arthritis Center
Greenville, NC

The average sales price (ASP) decrease proposed by our friends at Medicare could change the face of private practice infusion suites nationwide. I certainly do not want the infusion suite at Carolina Arthritis Center in Greenville, NC, to look like a ghost town. Most importantly, this would be bad for patient care; almost as importantly, this decrease would be very bad for the rheumatology business.

Reimbursements for In-Office Infusions

Let’s start with a brief history of reimbursement for in-office infusions. The Medicare Prescription Drug, Improvement, and Modernization Act of 20031—which started the concept of ASP plus 6%—was enacted because of concerns over inflated reimbursement under the Balanced Budget Act (BBA) of 1997.2 Under the BBA, reimbursement was 95% of the actual wholesale price or actual charge, whichever was lower. Starting in 2013, ASP plus 6% effectively became ASP plus 4% because of sequestration. If the proposed ASP plus 2% goes into effect, I assume that rheumatologists will be paid at somewhere close to ASP plus 0%. Even using common core math, this means that the payment for in-office infusions would just be the ASP. Margins are already extremely tight on several infused medications, and this decrease would put all infusions in the red for private practice rheumatology offices.

I am not saying that the treatments for inflammatory arthritis, lupus, and osteoporosis are cheap. A recent segment on National Public Radio that focused on a study by Express Scripts Holding Company highlighted the expense of such treatments, but gave very little information on comparable conditions other than diabetes.3 There was no mention of decreased disability and increased function with aggressive treatment of inflammatory arthritis, lupus, and osteoporosis. The segment also neglected to mention the fact that Express Scripts has contracts with many of the major insurance providers, and has a vested interest in dispensing more injectable—versus infusible—arthritis treatments.

Benefits of Infusion Medications

As private practice rheumatologists, we have hundreds of success stories involving using infused medications for inflammatory arthritis, lupus, and osteoporosis. Many of our patients have clinical issues that require them to be monitored closely in an infusion suite. Although patients with needle phobias do not give themselves injections to treat their rheumatologic conditions, others have tried and failed several self-injectable medications, leading to their use of infused medications. Compliance is also a significant issue; if the patient comes in for an infusion, I am 100% sure that they received the medication. Outpatient compliance rates, however, are nowhere near 100%. All of the above issues highlight the need for many of our patients to be treated aggressively in an infusion suite. Medicare’s plan to reduce reimbursement to a nonworkable level would put many patients at risk for poor outcomes.


Outside of our specialty, nobody is talking about how decreased reimbursement to the level proposed will likely close many infusion suites across the country. Some practices may go out of business completely, leading to further shortages of rheumatologists to treat patients in need. Some rheumatologists currently in private practice may choose to become an employee of a hospital or large group, further leading to the loss of independence in our specialty. In my 10 years of being in private practice rheumatology, I cannot think of a more important issue than this current threat; I urge you to do all that you can to fight for your patients and your practices.

Several petitions are circulating to fight the proposed ASP cut; please sign all of them, including the one from the National Organization of Rheumatology Managers. Fortunately, several powerful elected officials are trying to help put the brakes on this unilateral move by the Centers for Medicare & Medicaid Services. These include committee chairmen from the Energy and Commerce Committee (Rep Fred Upton [R, Michigan]), Ways and Means Committee (Rep Kevin Brady [R, Texas]), and US Senate Committee Finance (Orrin Hatch [R, Utah]). Please support these elected officials, and push this issue to the national level by fulfilling your duty and voting in this year’s important election.


  1. Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat 2066.
  2. Balanced Budget Act of 1997, Pub. L. No. 105-133, 111 Stat 251.
  3. Kodjak A. Cancer and arthritis drugs drive up spending on medicines. Published March 14, 2016. Accessed March 30, 2016.

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