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CMS Finalizes Policy and Technical Changes to the Medicare Advantage and Part D Programs for CY 2019

The Centers for Medicare and Medicaid Services (“CMS”) issued on April 2, 2018, an advanced copy of the final rule title “Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program” (“Final Rule”). This Final Rule will be published in the April 16, 2018 issue of the Federal Register.

This Final Rule implements provisions of the proposed rule that CMS released titled “Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program” (“Proposed Rule”), which was published in the Federal Register on November 28, 2017.

Upon review of over 1,600 comments, CMS finalized many of the provisions as proposed or with minor revisions, deferred addressing some proposals until a later date, or opted not to finalize some provisions as proposed in the Proposed Rule.

We have summarized major provisions of the Proposed Rule in a three part Client Alert which EBG published earlier this year. For the provisions summarized in our Client Alert, the following chart reflects CMS’s actions in the Final Rule:

Provision CMS Action
Part 1 Client Alert: Negotiated Prices

Request for Information Regarding the Application of Manufacturer Rebates and Pharmacy Price Concessions to Drug Prices at the Point of Sale

 

 

Not Finalized

 

 

CMS is not finalizing any proposal at this time. Any new requirements would be addressed through future rulemaking.

Part 2 Client Alert: Beneficiary Cost, Access, and Protection
Part D Tiering Exceptions Finalized as proposed
Expedited Substitutions of Certain Generics and Other Midyear Formulary Changes Finalized with minor revisions
Treatment of Follow-On Biological Products as Generics for Non-Low Income Subsidy (“LIS”) Catastrophic and LIS Cost Sharing

Not Finalized

 

 

CMS is not finalizing its proposed revision to the definition of generic drug. Instead, CMS is finalizing a different approach by modifying language at 42 § 423.782(a)(2)(iii)(A) and § 423.782(b)(2), to achieve the same desired goal of setting the copay amounts for biosimilars and interchangeable products to those of generics.

“Any Willing Pharmacy” Standard Terms and Conditions and Better Definitions of Pharmacy Types Finalized with minor revisions
Elimination of Meaningful Difference Requirement Finalized as proposed
Medicare Medical Loss Ratio Finalized with minor revisions
Part 3 Client Alert: Implementation of Comprehensive Addiction and Recovery Act of 2016 (“CARA”)
Drug Management Program for At-Risk Beneficiaries-
1. Identification of “At-Risk Beneficiaries” Finalized with minor revisions
2. Requirements of Drug Management Programs:  
  • Written policies and procedures
Finalized with minor revisions
  • Case management/clinical contact/prescriber verification
Finalized with minor revisions
  • Limitations on Access to Coverage for Frequently Abused Drugs
Finalized with minor revisions
  • Requirements for Limiting Access to Coverage for Frequently Abused Drugs
Finalized with minor revisions
  • Beneficiary Notices
Finalized with minor revisions
  • Provisions Specific to Limitations on Access to Coverage of Frequently Abused Drugs to Selected Pharmacies and Prescribers
Finalized  with minor revisions
  • Drug Management Program Appeals
Finalized with minor revisions
  • Termination of a Beneficiary’s Potential At-Risk or At-Risk Status
Finalized with minor revisions
  • Data Disclosure and Sharing of Information for Subsequent Sponsor Enrollments
Finalized with minor revisions
Special Enrollment Period Limitations for At-Risk Dually-Eligible or Low-Income Subsidy-Eligible Beneficiaries Finalized with minor revisions
Part D Opioid Drug Utilization Review Policy and Overutilization Monitoring System Finalized as proposed[1]

The Final Rule will be effective for Medicare Advantage and Part D plans for the 2019 contract year.


[1] Additional policies for plan year 2019 related to opioid drug utilization review controls were included in the Final Call Letter issued on April 2, 2018, available athttps://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Dow....

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Constance A. Wilkinson, Epstein Becker, Life Sciences Litigation Lawyer, Health Audits Attorney, Due Diligence
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CONSTANCE A. WILKINSON is a Member of the Firm in the Litigation and Health Care and Life Sciences Practices in the firm's Washington, DC office, with a primary focus on federal health care contracting.

Ms. Wilkinson:

  • Conducts due diligence and internal investigations and audits and responding to criminal fraud and abuse investigations

  • Analyzes cost allowability and pricing issues for proposals or audits

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Alan J. Arville, Epstein Becker Green, Health Care Lawyer, Life Science Attorney
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ALAN J. ARVILLE is a Member of the Firm in the Health Care and Life Sciences practice, in the Washington, DC, office.

Mr. Arville provides strategic, transactional, and regulatory guidance to the health care industry. Mr. Arville’s legal practice primarily focuses on matters relating to the distribution, dispensing, and reimbursement of pharmaceuticals, including the Medicare Part D program, the Medicare Advantage program, the 340B Drug Discount Program, federal anti-kickback and anti-inducement laws, HIPAA privacy and security, health care licensing, drug purchase agreements, payor contracting, and affiliations and other collaborative arrangements.

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Lesley R. Yeung, Epstein Becker Young, Healthcare Lawyer,
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LESLEY R. YEUNG is an Associate in the Health Care and Life Sciences practice in the firm's Washington, DC, office. In 2014 and 2015, Ms. Yeung was selected to the Washington DC Rising Stars list in the area of Health Care. Ms. Yeung recently served as a law clerk at a large nonprofit membership organization, where she supported litigation efforts related to the provision of long-term care services under the Americans with Disabilities Act. Prior to attending law school, Ms. Yeung was a health insurance specialist at the Centers for Medicare...

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James Tam, Epstein Becker Law Firm, Healthcare Law Attorney
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James Tam is an Associate in the Health Care and Life Sciences practice, in the Washington, DC, office of Epstein Becker Green.

Mr. Tam:

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  • Advises pharmaceutical manufacturers regarding federal pricing issues under 340B, the Federal Supply Schedule, Medicare, and Medicaid

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