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California's Workers' Compensation System (CAWCS) Department of Industrial Relations questioned the adequacy of the current Medi-Cal fee-schedule pricing and requested analysis of alternatives that maximize price availability and maintain budget neutrality. To compare CAWCS pharmacy-dispensed (PD) drug prices under alternative fee schedules, and identify combinations of alternative benchmarks that have prices available for the largest percentage of PD drugs and that best reach budget neutrality. Claims transaction-level data (2011-2013) from CAWCS were used to estimate total annual PD pharmaceutical payments. Medi-Cal pricing data was from the Workman's Compensation Insurance System (WCIS). Average Wholesale Prices (AWP), Wholesale Acquisition Costs (WAC), Direct Prices (DP), Federal Upper Limit (FUL) prices, and National Average Drug Acquisition Costs (NADAC) were from Medi-Span. We matched National Drug Codes (NDCs), pricing dates, and drug quantity for comparisons. We report pharmacy-dispensed (PD) claims frequency, reimbursement matching rate, and paid costs by CAWCS as the reference price against all alternative price benchmarks. Of 12,529,977 CAWCS claims for pharmaceutical products 11.6% (1,462,814) were for PD drugs. Prescription drug cost for CAWCS was over $152M; $63.9M, $47.9M, and $40.6M in 2011-2013. Ninety seven percent of these CAWCS PD claims had a Medi-Cal price. Alternative mechanisms provided a price for fewer claims; NADAC 94.23%, AWP 90.94%, FUL 73.11%, WAC 66.98%, and DP 14.33%. Among CAWCS drugs with no Medi-Cal price in PD claims, AWP, WAC, NADAC, DP, and FUL provided prices for 96.7%, 63.14%, 24.82%, 20.83%, and 15.08% of claims. Overall CAWCS paid 100.52% of Medi-Cal, 60% of AWP, 97% of WAC, 309.53% of FUL, 103.83% of DP, and 136.27% of NADAC. CAWCS current Medi-Cal fee-schedule price list for PD drugs is more complete than all alternative fee-schedules. However, all reimbursement approaches would require combinations of pricing benchmarks. We suggest keeping primary reimbursement at 100% of Medi-Cal and for drugs without a primary Medi-Cal price calculating the maximum fee as 60% of AWP and then 97% of WAC. Alternatively, we suggest using NADAC as a primary fee-schedule followed by either 60% AWP and 97% WAC or AWP-40% for drugs with no NADAC price. Fee-schedules may not offer the best price and a formulary approach may provide more flexibility.

Since 1992 Medicare has reimbursed physicians on a fee-for-service basis that weights physician services according to the effort and expense of providing those services and converts the weights to dollars using a conversion factor. In 1997 Congress replaced an existing spending constraint with the Sustainable Growth Rate (SGR) to reduce reimbursements if overall physician spending exceeded the growth in the economy. Congress, however, has routinely overridden the SGR because of concerns that reduced payments to physicians would limit patients' access to care. Under continued pressure to override scheduled fee reductions or eliminate the SGR altogether, Congress is now considering legislation that would reimburse physicians to improve quality and lower costs-two things that the current system does not do. This article reviews several promising models, including patient-centered medical homes, accountable care organizations, and various payment bundling pilots, that could offer lessons for a larger reform of physician payment. Pilot projects that focus exclusively on alternative ways to reimburse physicians apart from payments to hospitals, such as payments for episodes of care, are also needed. Most promising, Congress is now showing bipartisan, bicameral interest in revising how Medicare reimburses physicians. [PUBLICATION ABSTRACT]

To explore the best pricing benchmark for workers’ compensation drugs reimbursement at retail pharmacies. We used California workers’ compensation system (CAWCS) total cost of pharmacy dispensed medications (2017–2019) as a proxy to estimate drug prices using alternative pricing mechanism fee schedules. CAWCS paid 65.6% of the average wholesale price (AWP), 104.1% of Medi-Cal, 122.1% of the wholesale acquisition cost (WAC), 140.1% of the national average drug acquisition cost (NADAC), and 253.5% of the federal upper limit. In addition, we found the AWP-based formulas: CAWCS = AWP - 34.4%, Medi-Cal = AWP - 36.9%, WAC = AWP - 46.3%, NADAC = AWP - 53.2%, and federal upper limit = AWP - 74.1%. We found that AWP: 50% for generics and AWP - 18.2% for brands are the lowest paying formulas. The estimated median cost savings were $8.7 million (by adapting 97% of the WAC) and $9.5 million (by adapting the NADAC) across all states. NADAC was the best pricing benchmark for reimbursement of pharmacy dispensed drugs.

Background Pricing drugs in the California Workers’ Compensation System (CAWCS) has become more difficult as there are increasingly fewer drugs listed in the Medi-Cal primary fee schedule, which is used as the source for CAWCS drug prices. This presents a challenge of providing timely and accurate CAWCS reimbursement. The objectives of this study are (1) to explore any trends in physician-dispensed drug prices; (2) to compare the proportion of drugs with and without a price and to determine the financial implications of repricing CAWCS physician-dispensed drugs with five alternative pricing benchmarks; and (3) to offer recommendations for the pricing benchmark to maximize pricing coverage and to remain budget neutral. Methods We evaluated physician-dispensed drugs at the transaction level, reimbursed in the CAWCS. Frequency, reimbursement rate, and total and average paid costs were reported. We matched each claim line in the CAWCS to the corresponding unit price of an alternative price benchmark including average wholesale price, wholesale acquisition cost, direct prices, national average drug acquisition cost, and Federal Upper Limit. Results Average wholesale price provided prices for 99.9% of physician-dispensed drug claims, while Medi-Cal, the current primary physician-dispensed drug benchmark provided prices for a lower percentage (92.7%) of claims. The CAWCS prices were equivalent to 49% of the average wholesale price, 95.5% of Medi-Cal, 126.7% of the wholesale acquisition cost, 266% of the Federal Upper Limit, 64.4% of direct prices, and 197% of national average drug acquisition cost-estimated prices. Conclusions The CAWCS current Medi-Cal pricing for physician-dispensed drugs is better than all alternatives in terms of price availability, transparency, and budget neutrality, but pricing availability may decrease over time as Medi-Cal moves to managed care. National average drug acquisition cost is the next best alternative, but it requires combinations of pricing benchmarks to maximize its price availability.

Objective: To quantify the economic impact of premenstrual syndrome (PMS) on the employer. Methods: Data were collected from 374 women aged 18-45 with regular menses. Direct costs were quantified using administrative claims of these patients and the Medicare Fee Schedule. Indirect costs were quantified by both self-reported days of work missed and lost productivity at work. Regression analyses were used to develop a model to project PMS-related direct and indirect costs. Results: A total of 29.6% (n = 111) of the participants were diagnosed with PMS. A PMS diagnosis was associated with an average annual increase of $59 in direct costs (P < 0.026) and $4333 in indirect costs per patient (P < 0.0001) compared with patients without PMS. Conclusions: A PMS diagnosis correlated with a modest increase in direct medical costs and a large increase in indirect costs.

Physician spending is complex related to national health care spending, government regulations, health care reform, private insurers, physician practice, and patient utilization patterns. In determining payment rates for each service on the fee schedule, the Centers for Medicare and Medicaid Services (CMS) considers the amount of work required to provide a service, expenses related to maintaining a practice, and liability insurance costs. The value of 3 types of resources are adjusted on a yearly basis of the combined total multiplied by a standard dollar amount, called the fee schedules conversion factor, which was$33.98 in 2011, to arrive at the payment amount. This factor will stay almost the same ($ 34.03) unless a 27.4% cut in the sustainable growth rate (SGR) takes place or CMS enacts further reductions. With a 27.4% cut, the conversion factor will be $24.67 in 2012 after the first 2 months if Congress fails to act. Since the inception of Medicare programs in 1965, several methods have been used to determine the amounts paid to physicians for each covered service. The SGR was enacted in 1997 to determine physician payment updates under Medicare Part B with intent to reduce Medicare physician payment updates to offset the growth and utilization of physician services that exceed gross domestic product (GDP) growth. This is achieved by setting an overall target amount of spending for physicians’ services and adjusting payment rates annually to reflect differences between actual spending and the spending target. Since 2002, the SGR has annually recommended reductions in Medicare reimbursements. Payments were cut in 2002 by 4.8%. Since then, Congress has intervened on 13 separate occasions to prevent additional cuts from being imposed. The Medicare physician payment rule of 2012, which is still undergoing revisions -- but considered as the final rule-- is a 1,235 page document, released in November 2011. In this manuscript, we will describe important aspects of the 2012 physician fee schedule which include potentially disvalued services under the physician fee schedule, expansion of the multiple procedure payment reduction (MPPR) policy, establishment of the valuebased payment modifier, changes to direct practice expenses (PEs), electronic prescribing, the Physician Quality Reporting System (PQRS), and lab testing signatures, along with their implications. Additionally, the impact of multiple changes on interventional pain management will be described. In conclusion, interventional pain management is facing widespread challenges in the U.S. health care system. A historic reform, which has been passed by Congress and signed into law, whose survivability is not quite known yet, is affecting medicine drastically in the United States. Interventional pain management, like other evolving specialties, will probably most likely suffer under the new affordable health care law and regulatory burden. Key words: Health policy, physician payment policy, physician fee schedule, Medicare, sustained growth rate formula, interventional pain management, regulatory reform

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) repeals the Medicare sustainable growth rate (SGR) methodology for updates to the physician fee schedule (PFS) and replaces it with a new approach to payment called the Quality Payment Program that rewards the delivery of high-quality patient care through two avenues: Advanced Alternative Payment Models (Advanced APMs) and the Merit-based Incentive Payment System (MIPS) for eligible clinicians or groups under the PFS. This final rule with comment period establishes incentives for participation in certain alternative payment models (APMs) and includes the criteria for use by the Physician-Focused Payment Model Technical Advisory Committee (PTAC) in making comments and recommendations on physician-focused payment models (PFPMs). Alternative Payment Models are payment approaches, developed in partnership with the clinician community, that provide added incentives to deliver high-quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population. This final rule with comment period also establishes the MIPS, a new program for certain Medicare-enrolled practitioners. MIPS will consolidate components of three existing programs, the Physician Quality Reporting System (PQRS), the Physician Value-based Payment Modifier (VM), and the Medicare Electronic Health Record (EHR) Incentive Program for Eligible Professionals (EPs), and will continue the focus on quality, cost, and use of certified EHR technology (CEHRT) in a cohesive program that avoids redundancies. In this final rule with comment period we have rebranded key terminology based on feedback from stakeholders, with the goal of selecting terms that will be more easily identified and understood by our stakeholders.

An editorial about the use of usual and customary charges for out-of-network benefit determinations.An editorial about the use of usual and customary charges for out-of-network benefit determinations.

The passage of the Medicare Access and CHIP Reauthorization Act in Apri 2015 set the stage for the Part B reimbursement changes set to take place in 2019 based on the 2017 reporting period in relation to performance within core Medicare initiatives through the Merit-Based Incentive Payment System (MIPS) These changes will reflect the new \"fee-for-performance\" approach to reimbursements through individualized changes to an individual or practice group's conversion factor used in the RVU reimbursement calculation. The metrics being used as a basis for eligible provider competitive ranking for either positive or negative reimbursement changes are in proportion to performance on chosen Physician Quality Reporting System measures, value-based payment modifier calculations, compliance with Modified Stage 2 or Stage 3 Meaningful Use as part of the Electronic Health Record Incentive Program, and ongoing participation in clinical practice improvement activities. This article describes the core elements that make up MIPS and discusses the likely criteria that will be used as the core elements necessary for competitive reimbursement rankinq.