Medicare aims to trim Part B drug spending, but not clinician pay

Clinical takeaway: Bill covered drugs as usual, since Medicare's share rises to match the lower patient coinsurance. Watch for CMS to post the drug list and selected areas to see which of your patients qualify. 

Original Medicare patients typically owe 20% coinsurance on Part B drugs once the deductible is met, with no out-of-pocket maximum on Part B. CMS cites surveys of beneficiaries who skip or ration medication because of cost, and research suggesting high coinsurance limits use of some cancer treatments. 

Since 2023, the Inflation Reduction Act's rebate program has required manufacturers to pay Medicare when a Part B drug's price rises faster than inflation. Medicare lowers patients' coinsurance on those drugs to match. The rebate formula ignores what other countries pay. CMS contends that far higher US prices contribute to potentially excessive Part B spending. The final rule creates the mandatory Global Benchmark for Efficient Drug Pricing (GLOBE) Model, which tests whether rebates benchmarked to international prices lower costs for patients and Medicare while preserving quality of care. 

About 25% of Original Medicare Part B patients will be in the model, assigned by whether their address falls in a randomly selected ZIP code tabulation area. Reduced coinsurance applies April 1, 2027 through March 31, 2032. 

For Part B drugs the model would cover, an estimated 94% of them would carry coinsurance of 2% to 12%, against the standard 20%. But patients with supplemental Medicare coverage may not directly benefit. Medicare pays more per claim, but manufacturers owe rebates when a drug's Medicare price exceeds the international benchmark. CMS projects net Part B savings of $440 million over seven years, assuming manufacturers and patients change behavior. 

Many Part B drugs are injected or infused in physician offices, hospital outpatient departments, and ambulatory surgery centers, and some pharmacies furnish them too. GLOBE covers drugs in seven classes, including antineoplastics and immunological agents, with more than $100 million in Original Medicare Part B spending over 12 months. It excludes biosimilars, orphan-only drugs, plasma-derived products, cell and gene therapies, and drugs with Medicare-negotiated prices. 

GLOBE runs under the CMS Innovation Center's authority. CMS will compare patients in the selected areas against a group three times as large. Over five performance years, it will track coinsurance, drug use, site of care, and access, mainly through Medicare claims. 

The rule takes effect November 30, 2026, and lower coinsurance begins April 1, 2027. The rule gives no date for CMS to post the drug list and selected areas on the model's website, and until they appear, practices can't tell which patients qualify. Any expansion, nationwide included, is a later decision that CMS says depends on statutory criteria. 

"Medicare Part B patients and American taxpayers have paid significantly more for prescription medications than people in comparable countries," said CMS Administrator Mehmet Oz. "At CMS, we're focused on more than promises to make healthcare more affordable — we're taking action to pilot a new approach to lower costs and strengthen the quality of care while preserving medical innovation." 

Source: Centers for Medicare & Medicaid Services (2026 Sep 30) CMS Finalizes New Mandatory Drug Payment Model to Deliver Lower Drug Prices for Beneficiaries in Original Medicare Part B