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Hospital impact: Reimbursement models a roadblock to biosimilar adoption

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Today's biosimilar reimbursement model could affect broad adoption, according to a new analysis from Navigant. To drive adoption, payers may need to consider alternative payment models to ensure providers do not sacrifice profits when adopting biosimilars.

Today's biosimilar reimbursement model could affect broad adoption, according to a new analysis from Navigant. To drive adoption, payers may need to consider alternative payment models to ensure providers do not sacrifice profits when adopting biosimilars. According to Navigant's analysis, widespread adoption of biosimilar alternatives to a single innovator brand could lower annual profits by as much as $100 million across physician offices and 340B and outpatient hospital infusion suites nationwide. This is because while Medicare offers a differential reimbursement model that is higher for biosimilars, commercial payers do not, resulting in reduced profits for most providers. There are two ways that the use of biosimilars in lieu of the innovator biologic can be more financially beneficial for both payers and providers: a fixed reimbursement model and a differential reimbursement model. Under the former, payers "capitate" the cost of the drug by paying a fixed amount regardless of whether the innovator or biosimilar was administered, thus ending the financial incentive for providers to use the more costly innovator drug. A differential model offers better reimbursement rates to encourage biosimilar product choice by providers. For either reimbursement model to work, there must be a "middle ground" for payers and providers, whereas payers realize cost savings while still providing financial incentives for providers to adopt biosimilars.

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http://www.fiercehealthcare.com/hospitals/hospital-impact-reimbursement-models-a-roadblock-to-biosimilar-adoption

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