MedicarePart B

What Does Medicare Part B Cover?

Medicare Part B is commonly referred to as the Medicare medical benefit and covers a wide range of health care services. Medicare Part B covers physician office visits, outpatient care, ambulance services and medical equipment like a wheelchair or walker.

When it comes to medicines, Part B covers medications administered by a physician, like vaccinations or chemotherapy that are injected or infused. These medicines represent some very significant medical advances, including breakthroughs in cancer, rheumatoid arthritis and autoimmune conditions. Patients may be given these medicines across a number of different care settings. Approximately 600 Part B drugs are administered in different locations like hospital outpatient departments, physician offices, patient’s homes and dialysis centers.

Learn more about Part B at the Catalyst Blog and view the entire Medicare Monday series.

Medicines Are Not a Key Driver of Medicare Part B Costs

Medicare pays a market-based rate for Part B medicines. Average Sales Price (ASP) is a market-based price that reflects the weighted average of all manufacturer sales prices and includes all rebates and discounts that are privately negotiated between manufacturers and purchasers (with the exception of Medicaid and certain federal discounts and rebates). This methodology mirrors reimbursement for physician-administered drugs in the commercial market.  

Spending on Part B medicines represents a small and stable share of overall Part B spending. Recent research found the volume-weighted average sales price for Part B drugs has remained steady year over year, suggesting that prescription medicines and biologicals are not a key driver of program costs. This is in part because Medicare Part B is influenced by competitive market forces such as generic entrants, alternative therapies and other market shifts. 


Proposed Changes to Part B Put Patients at Risk

There have been a number of proposals to alter the Part B program that would put patients at risk. In 2016, the Centers for Medicare & Medicaid Services (CMS) proposed a demonstration through the Center for Medicare and Medicaid Innovation to change how Part B medicines are reimbursed. This harmful proposal was opposed by a broad range of stakeholders from across the health care sector, and in December, CMS decided not to finalize it.

The Medicare Payment Advisory Commission is currently considering potentially threatening changes to Part B drug payments. The proposed changes fail to recognize that Part B medicines are often used to treat patients with serious and complex conditions, and these vulnerable patients have few or no other treatment options – they are reliant on Part B therapies. Changes to Part B could lead to serious, unintended health consequences for Medicare beneficiaries.