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CMS Issues Guidance On Step Therapy for Part B drugs: The Good and Bad News
In this column, Michael C. Schweitz, MD, tackles reader questions on a range of health policy topics illustrating the potential impact of health care reform on daily rheumatology practice.
Health Care in the Headlines
On Aug. 7, CMS issued a memo to Medicare Advantage plans that rescinded a Health Plan Management System memo from Sept. 17, 2012 titled “Prohibition on Imposing Mandatory Step Therapy for Access to Part B Drugs and Services,” and issued new guidance that will allow Medicare Advantage plans to use step therapy for Part B drugs starting Jan. 1, 2019.
According to the letter, the new guidance acknowledges step therapy as a utilization management tool that will “help achieve the goal of lower drug prices while maintaining access to covered services and drugs for beneficiaries.”
In 2017, Medicare Advantage plans spent $11.9 billion on Medicare Part B drugs, according to a press release issued by HHS following the CMS statement. Per the new guidance, plans must pass savings on to patients, which will be realized in the form of lower coinsurance amounts and rewards programs that provide patients with benefits such as gift cards, the press release stated.
“President Trump promised better Medicare negotiation and lower drug prices for the American people. Today, we are taking an important step in delivering on that promise,” HHS Secretary Alex M. Azar said in the release. “By allowing Medicare Advantage plans to negotiate for physician-administered drugs like private-sector insurers already do, we can drive down prices for some of the most expensive drugs seniors use.”
“As soon as next year, drug prices can start coming down for many of the 20 million seniors on Medicare Advantage, with more than half of the savings going to patients,” Azar said. “Consumers will always retain the power to choose the plan that works for them: If they don’t like their plan, they don’t have to keep it. We look forward to seeing the results of this step toward tougher negotiation within Medicare, and will continue efforts to expand negotiation tools throughout our programs.”
Q: What does this decision mean for clinicians?
A: There is good and bad news
On Aug. 7, CMS issued a memo (nonbinding guidance) to Medicare Advantage plans entitled “Prior Authorization and Step Therapy for Part B Drugs in Medicare Advantage.” The memo rescinds a policy in place since 2012, which prohibited Medicare Advantage plans from using step therapy for Part B drugs. In other words: Starting in January 2019, Medicare Advantage plans will be allowed to apply step therapy requirements to Part B drugs.
Let’s start with the good news, which is that the Trump Administration has included several patient protections. For example, CMS states its expectation “that step therapy for Part B drugs, and other utilization management practices, should not result in increased costs to enrollees.” Additionally, the memo provides that step therapy should only be applied to patients with new prescriptions and not to those already in ongoing therapy, also known as ‘grandfathering’. Finally, the memo expects a fast exceptions and appeals process.
On the other hand, this is only guidance that delineates no enforcement mechanism in the event that Medicare Advantage plans fall short of CMS’ expectations. Of further concern is the fact that many implementation questions remain. For example: Now that plans can “cross-manage” the Parts B and D benefits, how will the protected classes in Part D be affected? What recourse do beneficiaries have if their out-of-pocket costs increase as a result of this policy? How does CMS plan to hold insurers accountable for the expected appeals deadlines?
This is just a sample of the many implementation questions that are left unanswered by the memo. Patient and provider groups have raised these substantive concerns, but are also dismayed by the procedural shortcomings, as there is no formal opportunity for input on this major change to the benefits under Medicare Advantage plans that will become effective on Jan. 1, 2019.
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- Michael C. Schweitz, MD, is chief of the division of rheumatology at Good Samaritan Medical Center in West Palm Beach, Florida, and member of the Healio Rheumatology Peer Perspective Board.
Disclosure: Schweitz reports no relevant financial disclosures.