The Department of Health and Human Services (HHS) has proposed a major, national payment model that would, if implemented, significantly impact how Medicare pays for drugs provided through the Part B program. Under the authority of the Center for Medicare and Medicaid Innovation (CMMI), HHS is proposing a new payment formula in about half of the states as early as August 1. Changing the incentives for prescribing certain drugs, the new formula would strongly affect reimbursement and revenues for a wide range of providers.

HHS also is proposing a second phase of the model that would introduce "value-based drug pricing." This approach could further impact prescribing incentives, as well as hospital and physician revenues.