COA Warns That Price Negotiation for Medicare Part B Drugs Threatens Community Oncology

The Community Oncology Alliance (COA) has warned that the current approach to implementing Medicare drug price negotiation for physician-administered Part B drugs could threaten patient access to cancer treatment and the viability of independent community oncology practices, according to a news release from the organization.¹ The COA urged the Centers for Medicare & Medicaid Services (CMS) to address problems with how the Medicare Drug Price Negotiation Program’s Maximum Fair Price (MFP) will be implemented for Part B drugs beginning in 2028.²

What concerns did COA raise about Part B drug negotiation?

Under Medicare’s current buy-and-bill system, community oncology practices purchase physician-administered cancer drugs and are generally reimbursed based on average sales price (ASP) plus 6%. COA noted in its comment letter that this add-on payment is, in practice, closer to 4.3% once sequestration is factored in, and that it is critical to covering overhead costs such as medication storage, shipping, inventory management, and clinical and office staff salaries.²

Beginning in 2028, the add-on payment for negotiated drugs will instead be based on MFP, which is expected to fall substantially below ASP for many selected drugs. COA also expressed concern that including MFP transactions in ASP calculations could erode ASP itself, which could further reduce reimbursement across Medicare and potentially Medicare Advantage and commercial insurance.

An analysis by Avalere Health found that average ASP erosion across the 10 Part B drugs likely to be selected for negotiation could grow to 19% by the end of 2032.^3,4 This could lead to a minimum of $25 billion in lost add-on payments for providers across Medicare fee-for-service, Medicare Advantage, and the commercial market between 2028 and 2032. Physicians administering oncology and hematology products are projected to be hit particularly hard, with a projected 39% to 64% decrease in the Medicare fee-for-service add-on payment for those drugs; based on Avalere’s projections, add-on payments for just 3 oncology drugs could be reduced by $12 billion to $19 billion over 5 years.^2,3

“This is not a minor reimbursement change. We are talking about potentially enormous cuts to the Part B add-on payments that help practices provide some of the most expensive and complex treatments in medicine,” Ted Okon, MBA, executive director of COA, said in the press release.¹ “If we get this wrong, practices could be forced to stop providing certain therapies, consolidate, or close, threatening patient access and driving more cancer care into higher-cost hospital settings.”

What broader financial pressures do community oncology practices already face?

COA’s comment letter argues that MFP effectuation would compound financial strain that already exists under the Medicare Physician Fee Schedule (MPFS), independent of Part B negotiation. Between 2014 and 2023, the conversion factor used to update MPFS reimbursement rates decreased 5% while the compounded inflation rate over the same period increased 28%.^2,3 For chemotherapy administration specifically, physician payments were nearly identical in 2014 ($133) and 2023 ($132), while the equivalent hospital reimbursement rate rose 11% over the same span. For non-chemotherapy IV infusion, the physician reimbursement rate fell nearly 6% from 2014 to 2023 while the hospital outpatient rate rose approximately 20%.⁴ COA contends these trends illustrate a widening gap between what independent practices and hospital-affiliated sites are paid for comparable services.

What administrative and cash-flow challenges could the MFP effectuation process create for practices?

COA raised concern that CMS’s proposed MFP effectuation process could require practices to navigate different manufacturer processes to access negotiated prices or to receive retrospective refunds after purchasing a drug. For community oncology practices managing millions of dollars in cancer drug inventory, the organization said this could create significant cash-flow exposure, reconciliation challenges, and administrative burden, particularly for smaller practices that must track separate MFP-eligible and non-MFP-eligible inventories.^1,2

COA’s comment letter points to Medicare Part D’s early experience with a similar retrospective refund model as a warning sign for Part B implementation. In a survey cited in the letter, the National Community Pharmacists Association found that 60% of surveyed pharmacy owners reported drawing on personal or business savings to sustain operations amid delayed manufacturer refund payments.⁵ Further, 78% reported problems reconciling claims and 28% reported lacking the information necessary to reconcile Medicare Transaction Facilitator payments with underlying prescription claims.⁵

What solution is COA proposing?

COA’s preferred solution is for CMS to use its existing statutory authority under Section 1847A(b)(2)(B) of the Social Security Act to exclude MFP units from ASP calculations entirely. They argued that this step is consistent with CMS’s 2005 precedent of excluding Competitive Acquisition Program prices from ASP under that same authority.² Short of that regulatory fix, COA is supporting the bipartisan Protecting Patient Access to Cancer and Complex Therapies Act (HR 4299), which would require drug manufacturers to rebate the ASP-to-MFP difference directly to Medicare so that providers continue to be reimbursed on a pre-IRA ASP basis while CMS still captures the savings generated through negotiation.²

Among its additional recommendations, COA is urging CMS to guarantee that providers can purchase negotiated drugs at MFP; to minimize the time between patient administration and cost recoupment; to leverage existing Medicare Administrative Contractor systems to issue refund payments rather than introducing a new payment mechanism; to require Medicare Advantage organizations to submit encounter data for selected Part B drugs within 2 weeks; and to ensure dispensing entities and Part B providers are never charged fees to use the Medicare Transaction Facilitator.²

“Community oncology strongly supports making cancer drugs more affordable for patients, but physicians and patients should not be stuck in the middle of negotiations between Medicare and drug manufacturers,” stated Debra Patt, MD, PhD, MBA, FASCO, president of COA, in the press release.¹ “The current approach risks undermining the practices responsible for delivering these lifesaving treatments. We have time to fix this before negotiated Part B prices take effect, and we need to get it right.”

References

1. Community Oncology Alliance warns Medicare drug negotiation could threaten community cancer care. News release. Community Oncology Alliance. September 17, 2026. Accessed September 18, 2026. https://tinyurl.com/4mwa2sb4
2. Patt D. COA Comments on Proposed CY2028 IPAY Effectuation. Community Oncology Alliance. September 16, 2026. Accessed September 18, 2026. https://tinyurl.com/r4x2dtr6
3. IRA Medicare Part B negotiation shifts financial risk to physicians. Avalere Health. November 29, 2022. Accessed September 18, 2026. https://tinyurl.com/58n8ccms
4. Physician payment for some services lags behind inflation. Avalere Health Advisory. September 11, 2023. Accessed September 21, 2026. https://tinyurl.com/ycyd7dtm
5. Commercial spillover impact of Part B negotiations on physicians. Avalere Health. September 16, 2024. Accessed September 18, 2026. https://tinyurl.com/yken2jua
6. National Community Pharmacists Association. MTF survey letter. February 26, 2026. Accessed September 21, 2026. https://tinyurl.com/y48ehrfv