OIG: CMS should seek authority for least costly alternative policies

HHS's Office of the Inspector General said CMS should consider seeking legislative authority to implement least costly alternative (LCA) policies for clinically comparable Medicare Part B drugs under "appropriate circumstances." The recommendation came in a report on the impact of eliminating LCA policies for a group of prostate cancer drugs after courts found the policies were not authorized under Medicare law. LCA policies limit reimbursement for a group of clinically comparable products to the least costly product.

According to the report, Medicare expenditures would have been $33.3 million less over a one-year period if the LCA policy for luteinizing hormone-releasing hormone (LHRH) agonists had not been withdrawn. The report also found the use of prostate cancer drugs "shifted dramatically in favor of certain costlier products." ...