June 19, 2019

June 19, 2019

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CMS Amends Regulations to Lower Drug Prices and Reduce Out-Of-Pocket Expenses in Medicare Advantage and Part D Prescription Drug Benefit Program

The Centers for Medicare and Medicaid Services (CMS) announced a final rule, to be published on May 23, 2019, amending the Medicare Advantage program (Part C) and Prescription Drug Benefit program (Part D) regulations. According to CMS, the purpose of the rule is to lower drug prices and reduce out-of-pocket expenses in the Medicare Advantage and Part D drug programs.

The major provisions are:

  1. Protected classes. The final rule contains an exception to the requirement that Part D sponsors include all Part D drugs in these protected classes on their formularies: (1) antidepressants; (2) antipsychotics; (3) anticonvulsants; (4) immunosuppressants for treatment of transplant rejection; (5) antiretrovirals; and (6) antineoplastics. The exception permits the use of prior authorization and step therapy for new starts (i.e., enrollees initiating therapy) — including confirming the use is for a protected-class indication.  This applies to all protected classes except antiretroviral medications. According to CMS, the exception permits indication-based formulary design and utilization management for new starts in the applicable classes, and Part D sponsors can exclude a protected-class drug that is being used for non-protected class indications.

  2. E-Prescribing and the Part D Prescription Drug Program. The final rule updates Part D E-Prescribing standards to require Part D sponsors to implement an electronic real-time benefit tool (RTBT) capable of integrating with at least one prescriber’s electronic prescribing (eRx) system or electronic health record (EHR), in order to provide prescribers complete, accurate, timely and clinically appropriate patient-specific real-time formulary and benefit (F&B) information (including cost, formulary alternatives and utilization management requirements). This must be in place by January 1, 2021, but CMS is encouraging plans to start implementation now.

  3. Medicare Advantage and Step Therapy for Part B Drugs. The final rule provides requirements under which Medicare Advantage plans may apply step therapy as a utilization management tool for Part B drugs.  CMS notes that utilization management tools such as step therapy enhances the ability of Medicare Advantage plans to negotiate drug costs and can also benefit taxpayers and Medicare Advantage enrollees through lower per unit costs or less overall cost for Part B drugs, while maintaining access to medically-necessary covered drugs. The rule adopts new adjudication timeframe requirements for organization determinations and plan reconsiderations related to requests for Part B drugs.

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Melissa Lisa Thompson Health Lawyer Robinson Cole Law Firm
Partner

Lisa Thompson advises companies, senior management, and their boards of directors, with a focus on the health care, life sciences and technology industries. She is a member of the firm’s Health Law Group and Data Privacy + Cybersecurity Team.  She is also an arbitrator on the Commercial panel and the Health Care panel of the American Arbitration Association.  

Health Care, Life Science and Technology Industries

Lisa represents domestic and international clients in the health care, life science and technology industries, including pharmaceutical companies,...

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