Completed Work on Reimbursement Policy

Between 1995 and 2010, prostate drugs covered under Medicare Part B were subject to least costly alternative (LCA) policies, which based the payment amount for a group of clinically comparable drugs on that of the least costly one. In April 2010, CMS discontinued all LCA policies for Part B drugs in response to a court ruling, which found that the use of an LCA policy was not authorized under Medicare law. In examining the effects of this change, we found that after LCA policies were rescinded, utilization patterns for the related prostate cancer drugs shifted dramatically in favor of the costlier products, leading to a spending increase of $33 million in a single year. Least Costly Alternative Policies: Impact on Prostate Cancer Drugs Covered Under Part B (OEI-12-12-00210)