On Tuesday, March 8, 2016, the Centers for Medicare & Medicaid Services (“CMS” or “the Agency”) published a proposed rule (“Proposed Rule”) to test new models ostensibly to improve how Medicare Part B pays for prescription drugs and supports physicians and other clinicians in delivering higher quality care. CMS published its single-spaced, threecolumn version of the Proposed Rule in the Federal Register on Friday, March 11, 2016.

Comments on the Proposed Rule are due to CMS on or before Monday, May 9, 2016.

The Proposed Rule sets out the implementation of a new Medicare payment model under the authority of section 1115A of the Social Security Act (“the Act”). Section 1115A authorizes the Center for Medicare & Medicaid Innovation to test innovative payment and service delivery models to reduce program expenditures while preserving or enhancing the quality of care furnished to Medicare, Medicaid, and Children’s Health Insurance Program beneficiaries. CMS proposes to exercise this authority to test whether the alternative payment designs outlined in the Proposed Rule will lead to a reduction in Medicare Part B drug expenditures. According to a CMS press release, the proposal is “designed to test different physician and patient incentives to do two things: drive the prescribing of the most effective drugs, and test new payment approaches to reward positive patient outcomes.”