FAIC Act

Key Points

• The FAIC Act changes how Medicare pays for expensive cancer drugs given in hospital outpatient settings. Currently, Medicare bundles drug costs into one payment for the hospital visit. This bill would require Medicare to make a separate payment for qualifying cancer treatments so hospitals get fully reimbursed for the actual cost of the medicine.
• To qualify, a cancer drug must cost at least $350 per day and must have been approved by the FDA on or after January 1, 2008. The drug also cannot already be receiving temporary pass-through payments. This targets newer, more expensive treatments that are most likely to create financial pressure on hospitals.
• The $350 per-day cost threshold would increase each year to keep up with rising healthcare costs, using the same adjustment factor already used for hospital outpatient payments.
• The separate payment amount would be based on the drug's average sales price, or if that data is not available, the wholesale acquisition cost or mean unit cost from hospital claims data. This mirrors how other outpatient drugs are already paid under Medicare.
• The bill is designed to be budget neutral, meaning total Medicare outpatient spending stays the same. While payments go up for qualifying cancer drugs, other outpatient payments would be adjusted downward to offset the cost.