From January 1, 2028, Medicare will pay for negotiated Part B drugs at 106% of the Maximum Fair Price (MFP) instead of 106% of the Average Sales Price (ASP). That shrinks the add-on that funds community infusion operations, and it does so on top of a decade of flat professional fees. The goal of lower drug prices is right; the problem is that the cost lands on the lowest-cost site of care.

• Size of the hit: Avalere projects a 39% to 64% cut in the oncology/hematology add-on and at least $25 billion in lost add-on payments across all payers, 2028-2032
• Timing: The 2028 Part B selections (Orencia, Entyvio, Xolair, Botox, Cimzia) are non-oncology. The H.R. 1 orphan-drug exclusion removed daratumumab and delayed nivolumab and pembrolizumab, so the oncology hit arrives around 2029 and beyond
• The window: That delay is a reprieve, not a solution. It gives the field a short window to fix Part B design before it reaches cancer care

How MFP Rewrites the Part B Formula

The add-on is a percentage of price, so a negotiated discount cuts it in proportion. The add-on is not drug profit; it pays for storage, cold chain, compounding, carrying costs, spoilage, and pharmacy staff. The Centers for Medicare & Medicaid Services (CMS) confirmed in the 2026 Physician Fee Schedule (PFS) final rule that negotiated claims will be paid at 106% of MFP.

Abbreviations: ASP, Average Sales Price; MFP, Maximum Fair Price.

The same infusion carries a 60% smaller add-on. Three second-order effects compound it:

1. ASP erosion. MFP refunds count in ASP; Avalere projects 19% average ASP erosion by 2032, spreading the cut to non-Medicare business.
2. Commercial and Medicare Advantage (MA) spillover. Contracts that reference ASP fall with it, or payers re-anchor to MFP.
3. Cumulative selection. Each cycle adds drugs, so the share of infusion volume paid at MFP grows yearly.

The Domino Effect on Practices and Patients

Drug add-ons have quietly subsidized underpaid services. From 2014 to 2023, the PFS conversion factor fell 5% while inflation rose 28%; physician chemo administration pay stayed flat ($133 vs $132) while the hospital rate rose 11%. Remove that subsidy, and the sequence is predictable:

1. Net cost recovery turns negative on selected drugs (Avalere: $12-$19 billion in add-on cuts over 5 years for just 3 oncology drugs).
2. Practices stop administering some therapies, refer out, or shift to white bagging.
3. Consolidation accelerates through hospital, Private Equity, or Managed Service Organization deals.
4. Closures follow, especially rural; a clinical outcome assessment counted 1653 clinics closed, acquired, merged, or distressed from 2008 to 2018.
5. Care moves to the higher-cost hospital setting, eroding the savings negotiation was meant to capture.

Patients may see little out-of-pocket benefit, since many already hit MA maximums or have Medigap. What they will feel is access longer drives and waits. In rural Carolinas, the nearest hospital infusion center can be an hour or more away, a real barrier on a q3-week regimen. ASTRO reports counties home to 50.8 million Americans had no radiation oncology site in 2025, a warning for medical oncology.

340B tilt: 340B hospitals buy at deep discounts yet have been paid ASP + 6%, while independents will be paid on MFP. The proposed CY 2027 Outpatient Prospective Payment System rule (ASP − 33.4% for 340B drugs) would help level the field but does not touch the MFP add-on problem.

The Operational Vortex

Under the proposed effectuation model, practices buy at or near ASP and wait for manufacturers to refund the gap to MFP through the Medicare Transaction Facilitator (MTF). On a $10,000 dose, that float sits on the practice balance sheet.

• Float time: up to 30 days for reporting plus 14 for refunds, roughly 2 months longer than today
• Part D warning: in a survey conducted by the National Community Pharmacists Association, 60% of pharmacy owners used savings to cover delayed refunds, 78% struggled to reconcile claims, and 28% lacked data to match payments
• New overhead: a different refund pathway per manufacturer, dual refrigerated inventory for MFP and non-MFP stock, and financing costs on extended distributor terms

Policy Solutions: Keep the Savings, Protect the Site of Care

Each fix preserves Medicare’s negotiated savings while taking physicians out of the middle of manufacturer-government negotiation.

Abbreviations: ASP, Average Sales Price; CAP, Competitive Acquisition Program; CMS, Centers for Medicare & Medicaid Services; IRA, Inflation Reduction Act; MA. Medicare Advantage; MAC, Medicare Administrative Contractor; MFP, Maximum Fair Price; MTF, Medicare Transaction Facilitator.

H.R. 4299 was introduced in July 2025 with bipartisan sponsors but has not advanced out of committee. Longer term, administration fees should cover actual costs, and CMS should study and publish site-of-care effects of every Part B selection.

What Practices Should Do Now

Policy may change; preparation should not wait for it.

1. Model exposure. Rank Part B drugs by Medicare volume and spend, flag likely IPAY 2029-2030 selections and run add-on scenarios at MFP = 40% to 70% of ASP.
2. Stress-test cash flow. Size the working capital a 30- to 60-day refund lag ties up; talk to your distributor and lender now.
3. Prepare systems. Plan for separate MFP unit tracking, MTF enrollment and refund-to-claim reconciliation.
4. Renegotiate commercial contracts. Peg drug payment to a benchmark not contaminated by MFP, or to an acquisition-cost floor.
5. Engage manufacturers. They share an interest in keeping buy-and-bill access intact.
6. Advocate locally. Bring members of Congress into the infusion suite; rural patient stories move legislation.

Conclusion

As designed for Part B, negotiation turns a pricing policy into a site-of-care policy by accident. Excluding MFP from ASP, passing H.R. 4299, and building prospective effectuation would keep every dollar of Medicare’s savings while keeping cancer care close to home. Without action, paper savings will be offset by closures, consolidation, and migration to the most expensive setting.