ACR cheers ‘positive first step’ in reforming prior authorization for Medicare
Prior authorization reforms, increased biosimilar access and the future of the Medicare drug price negotiation program are among the American College of Rheumatology’s top concerns in a letter recently submitted to CMS.
The advocacy letter was submitted on Jan. 27 in response to proposed rule changes to Medicare Advantage and Part D for 2026.
“We believe many of the provisions in the proposed rule are well in line with our advocacy efforts,” the letter stated.
A ‘first step’ in prior authorization reform
Among the prior authorization rule changes, CMS has proposed that, once approved, prior authorizations cannot be reopened during an inpatient stay. The rules would also require plans to provide detailed explanations of their coverage denials and notify of the right to appeal.
The term “internal coverage criteria” was also specifically defined and clarified to help ensure coverage decisions are transparent and evidence-based in cases when Medicare coverage policies are insufficient, according to the letter.
The new rules should result in improved access to care that benefits patients and providers alike, Christopher Phillips, MD, chair of the ACR’s Committee on Rheumatologic Care, told Healio.
“Streamlining and simplifying access to care is a win for patients and providers, especially small providers,” he said. “Reforming the prior authorization process for Medicare Advantage plans is a positive first step, as it helps to minimize delays in patient care and alleviate administrative burden. Ultimately, the ACR supports policies that empower care decisions made between doctors and their patients, not insurers.”
Still, the ACR suggested prior authorization delays could be further mitigated with mandated real-time decision-making for emergencies, strong enforcement of the new requirements, and regular publication of data on appeals and overturns.
‘Underwater’ biosimilars
The proposed rules also include an emphasis on the importance of lower-cost drugs, such as generics and biosimilars, being accessible on insurance plan formularies to ensure a “cost-effective drug utilization management program.” CMS acknowledged that pharmacy benefit managers sometimes favor more expensive drugs over more affordable but equally effective options, resulting in higher out-of-pocket costs for patients.
“We know that list prices rise to allow for higher rebates, which create profits for pharmacy benefit managers and help determine which drugs make it on their formulary, but these high list prices also make medications prohibitively expensive for patients,” Phillips said. “It’s unfair that patients are caught in the middle of these competing incentives, and it’s our hope that a review of the Part D formulary and utilization management practices will help improve access to equally effective but more affordable biosimilar treatment options.”
In its letter, ACR also called for CMS and Congress to address the problem of “underwater biosimilars” in Medicare Part B. Practices can become “underwater” on a biosimilar when they are reimbursed for less than its acquisition cost due to rebates between manufacturers and pharmacy benefit managers driving down the average sales price, according to ACR.
The organization suggested an amendment to the Social Security Act that would allow the use of “wholesale acquisition cost + 3% to reimburse providers until [the average sales price] reaches sustainable levels.”
Another option favored by some, and first suggested by MedPAC, would be to “consolidate billing codes so that reference products and their biosimilars are reimbursed at the same rate, based on the volume-weighted average sales price,” Amelia Bond, PhD, associate professor at Weill Cornell Medical College, told Healio.
“Interestingly, this could exacerbate ‘underwater biosimilars,’” she said. “In some of my work, and work by my colleague at Dartmouth, Emma Dean, PhD, hospitals and practices prefer to stock a limited number of molecule types — eg, a single biosimilar/reference product rather than all possible products — and commercial formularies have strong influence on which biosimilars/reference products are stocked. This could push practices toward more white bagging or sending patients to more expensive facility settings.”
Uncertain future for drug price negotiation?
The ACR also put in a word of support for the Inflation Reduction Act passed under former President Joe Biden, calling for an overall “strengthening” of the law’s health care provisions, particularly the Medicare Drug Price Negotiation Program.
“The ACR also strongly encourages CMS to continue strengthening the IRA, particularly the Medicare Drug Price Negotiation Program,” the letter stated, adding, “We care concerned about the future of the Medicare Drug Price Negotiation Program, particularly due to the benefits it has had for patients’ access to rheumatologic treatments.”
Medicare payment cuts
Meanwhile, in a separate press release, the ACR praised a proposed bipartisan bill that would offset the 2.8% cut to the Medicare physician fee schedule for 2025.
The Medicare Patient Access and Practice Stabilization Act, introduced by Rep. Gregory Murphy (R-NC) and co-sponsored by 65 other Democrats and Republicans, would add 2% to physician payments for services rendered after April 1. The legislation was introduced on Jan. 31 and has been referred to the Energy and Commerce and Ways and Means committees in the House of Representatives.
“Increased inflation coupled with chronically low Medicare reimbursement rates threatens patient access to care — especially for rural and underserved populations,” ACR President Carol Langford, MD, MHS, said in the release. “If not addressed, the current cuts will destabilize the health care system and make it more difficult for rheumatologists to deliver essential care for patients nationwide.
“After years of successive cuts, it is clear the Medicare payment system cannot function effectively in its current state and physicians — like rheumatologists — and patients are the ones suffering the most,” she added. “We hope congressional leadership will work to swiftly pass this important legislation to safeguard our health care system as soon as possible.”
References:
American College of Rheumatology commends legislation to address harmful Medicare payment cuts to physicians. https://rheumatology.org/press-releases/american-college-of-rheumatology-commends-legislation-to-address-harmful-medicare-payment-cuts-to-physicians. Published Jan. 31, 2025. Accessed Feb. 14, 2025.
Contract year 2026 policy and technical changes to the Medicare Advantage program, Medicare prescription drug benefit program, Medicare cost plan program, and programs of all-inclusive care for the elderly (CMS-4208-P). https://www.cms.gov/newsroom/fact-sheets/contract-year-2026-policy-and-technical-changes-medicare-advantage-program-medicare-prescription. Published Nov. 26, 2024. Accessed Feb. 14, 2025.