CMS eases Part D restrictions

The Centers for Medicare & Medicaid Services used a series of 2018 and 2019 policy moves to give Medicare drug plans and Medicare Advantage insurers more room to manage prescription spending. On April 2, 2018, CMS finalized changes for contract year 2019 that it said would promote innovation in Medicare Advantage and Part D and produce about $295 million a year in savings over five years. In a separate August 7, 2018 action, the agency said Medicare Advantage plans could begin using step therapy for Part B drugs starting January 1, 2019. On May 16, 2019, CMS said a later final rule would add price transparency in Part D and further support Medicare Advantage drug-price negotiations. ### Which restrictions did CMS actually loosen in Part D? The May 16, 2019 CMS fact sheet said Part D sponsors must include on formularies all drugs in six protected classes: antidepressants, antipsychotics, anticonvulsants, immunosuppressants for transplant rejection, antiretrovirals and antineoplastics. CMS said sponsors were already allowed to use prior authorization and step therapy for beneficiaries starting treatment in five of those six classes, but not for antiretrovirals, and the 2019 rule codified that existing policy. (cms.gov) CMS had proposed going further. The agency said it did not finalize proposals that would have let Part D sponsors exclude a protected-class drug from a formulary if its price rose beyond a threshold or if it was only a new formulation of an existing single-source product. That means the most aggressive proposed changes to protected-class coverage were not adopted in the 2019 final rule. (cms.gov) ### Where did pharmacy rebates fit into the push on drug prices? CMS framed the broader package as a drug-pricing effort. The August 7, 2018 press release said the administration wanted Medicare plans to negotiate better drug deals and required that more than half of savings from certain Medicare Advantage step-therapy programs be passed on to patients. The agency described those savings as part of a larger effort to lower drug costs and expand plan tools. (cms.gov) The April 2, 2018 final-rule fact sheet did not spell out a standalone pharmacy-rebate overhaul in the lines available here, but CMS repeatedly tied the policy package to lower premiums or added benefits from plan savings. In CMS’s description, the rule package was intended to give Medicare Advantage and Part D sponsors more flexibility while reducing program costs. (cms.gov) ### Why was step therapy in Medicare Advantage a separate but related change? On August 7, 2018, CMS issued guidance allowing Medicare Advantage plans to apply step therapy to physician-administered and other Part B drugs beginning January 1, 2019. The agency said that reversed earlier guidance that had discouraged prior authorization for Part B drugs and barred step therapy. (cms.gov) HHS Secretary Alex Azar said that action could start bringing down drug prices for many of the 20 million seniors enrolled in Medicare Advantage, with more than half of savings going to patients. CMS Administrator Seema Verma said the agency was “lifting those barriers” so plans could use “private-sector tools” to lower the cost of expensive drugs while adding care-coordination programs. (cms.gov) ### What did CMS say these changes would do for plans and patients? CMS said the April 2018 final rule would generate about $295 million in annual Medicare savings over 2019 through 2023, which it said could show up as lower premiums or additional benefits. The agency also said Real Time Benefit Tools would have to be adopted by Part D plans by January 1, 2021 so prescribers could see lower-cost alternatives inside e-prescribing or electronic health record systems. (cms.gov) Those technology requirements matter because they connect formulary design, utilization management and prescribing workflows. CMS said Real Time Benefit Tools could help reduce out-of-pocket costs and improve adherence by showing lower-cost options at the point of prescribing. ### What is the practical takeaway from the final rule? The 2019 final rule drew a line between proposals CMS floated and policies it actually adopted. (cms.gov) CMS kept the protected-class framework in place, codified existing utilization-management rules for five of the six classes, and declined to finalize two proposed protected-class exclusions. At the same time, the agency preserved and expanded other levers, including Medicare Advantage step therapy for Part B drugs and electronic benefit tools for Part D. (cms.gov) The key dates are April 2, 2018 for the contract-year 2019 final rule, August 7, 2018 for the Medicare Advantage Part B step-therapy guidance, January 1, 2019 for implementation of that step-therapy option, and January 1, 2021 for the Real Time Benefit Tool requirement in Part D. (cms.gov 1) (cms.gov 2)