CMS re­treats on Part D rule in­tended to re­duce drug costs and im­prove ac­cess

Modern Healthcare - - NEWS - By Vir­gil Dick­son

Need­ing to fo­cus on mak­ing health­care re­form work, the Obama ad­min­is­tra­tion backed away last week from ma­jor changes pro­posed for the Medi­care Part D pre­scrip­tion drug pro­gram, in the face of fierce po­lit­i­cal op­po­si­tion from the health­care in­dus­try and some pa­tient ad­vo­cacy groups.

The re­treat of­fered po­lit­i­cal pro­tec­tion to Democrats run­ning for elec­tion but dis­ap­pointed ex­perts who be­lieve the pro­pos­als could have re­duced costs and en­hanced ben­e­fi­ciary choice and ac­cess with­out hurt­ing cov­er­age un­der the pop­u­lar pro­gram. When the CMS re­leased the pro­posed rule in Jan­uary, it pro­jected it would save the govern­ment $1.3 bil­lion over five years. The agency’s re­treat showed once again that while ev­ery­one says they sup­port con­trol­ling Medi­care costs, ac­tual mea­sures to do so en­counter in­tense po­lit­i­cal op­po­si­tion.

The draft pol­icy that the CMS in­tro­duced in Jan­uary was in­tended to in­crease price com­pe­ti­tion, de­crease fraud, and im­prove se­niors’ abil­ity to make cost-ef­fec­tive choices among the par­tic­i­pat­ing pri­vate drug plans.

But many of the pro­pos­als were panned by var­i­ous in­ter­est groups, par­tic­u­larly phar­macy ben­e­fit man­agers, and cre­ated po­lit­i­cal headaches for Demo­cratic can­di­dates asked to ex­plain the poli­cies. They in­cluded strip­ping a re­quire­ment that health plans pro­vide cov­er­age for most drugs in cer­tain pro­tected classes of med­ica-

“You have a pro­gram that has high ap­proval, with 90% of Medi­care ben­e­fi­cia­ries rank­ing it pos­i­tively, and you want to change it?”

—Mary Gre­aly, Pres­i­dent, Health­care Lead­er­ship Coun­cil

tions. One in­dus­try-funded study said the pro­posed rule would have in­creased Medi­care costs by up to $1.6 bil­lion in 2015.

“You have a pro­gram that has high ap­proval, with 90% of Medi­care ben­e­fi­cia­ries rank­ing it pos­i­tively, and you want to change it?” said Mary Gre­aly, pres­i­dent of the Health­care Lead­er­ship Coun­cil, a coali­tion of health­care-com­pany CEOs, in­clud­ing in­sur­ers, drug­mak­ers, hos­pi­tals and uni­ver­si­ties. “That makes no sense, es­pe­cially for those run­ning for of­fice this year.”

The Health­care Lead­er­ship Coun­cil ini­ti­ated a let­ter—signed by 371 drug man­u­fac­tur­ers, health plans, provider or­ga­ni­za­tions and pa­tient groups, some of which re­ceive in­dus­try fund­ing—ask­ing CMS Ad­min­is­tra­tor Mar­i­lyn Taven­ner not to move for­ward with the changes.

The pro­posed rule also pro­voked bi­par­ti­san crit­i­cism in Congress, with nearly 50 House mem­bers writ­ing to urge Taven­ner to change course.

Gone for now is the pro­posal re­mov­ing the re­quire­ment that plans pay for “all or sub­stan­tially all” drug of­fer­ings in six cat­e­gories—an­ti­neo-plas­tics, an­ti­con­vul­sants, an­tiretro­vi­rals, an­tipsy­chotics, an­tide­pres­sants and im­muno­sup­pres­sants.

The pro­posal would have re­moved spe­cial pro­tec­tions for an­tide­pres­sants, im­muno­sup­pres­sants and even­tu­ally an­tipsy­chotics. CMS said their spe­cial sta­tus ham­pered plans in ne­go­ti­at­ing dis­counts with drug mak­ers. Also gone is a pro­posal that each payer of­fer no more than two Part D plans within the same ser­vice area— one ba­sic plan and one en­hanced plan.

The agency ar­gued that the on­go­ing clos­ing of the Part D dough­nut hole has re­duced the need for en­hanced ben­e­fits, and that re­duc­ing the num­ber of plans would help ben­e­fi­cia­ries make bet­ter choices. Re­searchers have found that few se­niors switch plans even when switch­ing would save them money.

The CMS also aban­doned a pro- posal to bar Medi­care Ad­van­tage plans from of­fer­ing cov­er­age op­tions that re­place plans that it pre­vi­ously re­quired the in­surer to ter­mi­nate or con­sol­i­date be­cause of low en­roll­ment.

And fi­nally, the CMS rolled back its in­ten­tion to give all phar­ma­cies the chance to be in a plan’s pre­ferred net­work if they ac­cept the plan’s con­tract terms on pric­ing and other fac­tors.

That pro­vi­sion had bi­par­ti­san sup­port from mem­bers of Congress rep­re­sent­ing ru­ral ar­eas be­cause it was seen as in­creas­ing ben­e­fi­ciary ac­cess and con­ve­nience.

“Given the com­plex­i­ties of these is­sues and stake­holder in­put, we do not plan to fi­nal­ize these pro­pos­als at this time,” Taven­ner said in the let­ter. “We will en­gage in fur­ther stake­holder in­put be­fore ad­vanc­ing some or all of the changes in these ar­eas in fu­ture years.”

Taven­ner said the CMS still will go ahead with pro­pos­als to in­crease con­sumer pro­tec­tions and an­tifraud pro­vi­sions, both of which have bi­par­ti­san sup­port. It also will fi­nal­ize a pro­posal to en­sure ac­cess to care in cases of nat­u­ral dis­as­ter.

Stu­art Guter­man, vice pres­i­dent for Medi­care and cost con­trol at the Com­mon­wealth Fund, said the Obama ad­min­is­tra­tion’s change of course “shows they are will­ing to lis­ten to the feed­back.”

But drop­ping the “any will­ing phar­macy” pro­vi­sion was a blow to com­mu­nity phar­ma­cists, who say the CMS was swayed by large re­tail­ers such as Wal-Mart and phar­macy ben­e­fit man­agers that own mailorder ser­vices, which have ben­e­fited from the re­stricted net­works that are now em­ployed in about 70% of Part D plans.

“That’s what drove a knife through my heart to­day,” said Ja­son Wal­lace, pres­i­dent of the Phar­ma­cists United for Truth and Trans­parency, a coali­tion of in­de­pen­dent phar­ma­cists and phar­macy own­ers. “CMS rec­og­nized that there was a prob­lem and ba­si­cally some­one way more pow­er­ful than you and I has con­vinced the CMS other­wise.”

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