Changes to Improve Medicare Drug Plans, Advantage Program Proposed by
Wide range of programs
will be for next year’s programs; seeks public comment
Jan. 8, 2014 – The Centers for Medicare and
Medicaid Services is proposing a new way to identify protected classes
of drugs and other changes it says will strengthen protections, improve
health care quality and reduce costs for Medicare beneficiaries with
private Medicare Advantage (MA) and Part D prescription drug plans in
Contract Year (CY) 2015.
Among the other technical and program changes this
rule proposes are revisions that promote competition in Part D plans,
changes to the regulatory definition of negotiated prices, and changes
to ensure that plan choices are meaningful for beneficiaries.
This fact sheet discusses the major provisions of
the proposed rule. The proposed rule would save $1.3 billion over the
five years 2015 – 2019 if finalized.
New criteria for drug
categories or classes of clinical concern: In the first
year of the Medicare prescription drug benefit, CMS implemented a policy
that required all Part D plans to include on their formularies “all or
substantially all” Part D drugs within six drug classes—antineoplastics,
anticonvulsants, antiretrovirals, antipsychotics, antidepressants, and
The Affordable Care Act later codified this policy,
and allowed CMS to specify criteria for identifying protected classes
through notice and comment rulemaking. CMS proposes to change the
categories or classes of Part D drugs of clinical concern using criteria
established through this notice and comment rulemaking.
Under the proposed criteria, CMS would require
formulary inclusion of all drugs within the antineoplastic,
anticonvulsant, and antiretroviral drug classes (subject to proposed
exceptions), but would no longer require all drugs from the
antidepressant and immunosuppressant drug classes to be on all Part D
Although antipsychotics do not meet the criteria,
they will remain protected at least through 2015 while CMS evaluates
additional considerations and the need for any other formulary
In response to anti-competitive tactics that have contributed to
inconsistencies in bidding, payments, and market price signals for
Medicare Part D plans, the rule proposes to revise the regulatory
definition of negotiated prices to require all price concessions from
pharmacies to be reflected in negotiated prices.
The proposed rule would require greater cost
savings for beneficiaries in return for offering preferred cost sharing
so that sponsors cannot incentivize use of selected pharmacies,
including the sponsors’ own related-party pharmacies that charge higher
rates than their competitors.
More meaningful plan
choices: In order to ensure that beneficiaries have
better access to health plan services with meaningfully different
benefits and transparent costs, and because the Affordable Care Act’s
closing of the “donut hole” has reduced the need for plans offering
enhanced benefits, CMS proposes that Prescription Drug Plans Sponsors
offer no more than two Part D plans in the same service area.
CMS seeks comments on ways to ensure that a plan
sponsor’s basic Part D bid represents its lowest-premium plan offering.
This provision would not be effective until 2016. The proposed rule
would also prohibit MA plans from offering new plans that simply replace
plans CMS has required to be terminated or consolidated due to low
Improving payment accuracy:
The proposed regulation also would implement the Affordable Care Act
requirement that MA plans and Part D sponsors report and return
identified Medicare overpayments.
risk-adjustment data validation (RADV) audit process:
The proposed rule would strengthen RADV by streamlining the RADV audit
process by combining error rate calculation appeals and medical record
review-determination appeals into one combined process.
Expanded Part D data
sharing: CMS proposes to expand the release of
unencrypted prescriber, plan and pharmacy identifiers contained in
prescription drug event (PDE) records to give researchers broader access
to health care data. This would support CMS’s growing role as a
value-based purchaser of health care. The release of this data would
still be subject to CMS’s “minimum necessary,” “legitimate researcher”
and “non-release for commercial purposes” policies as required by law.
Expanded prevention and
health improvement incentives: The rule proposes to
expand rewards and incentive programs that do not discriminate against
any MA beneficiaries that focus on encouraging participation in
activities that promote improved health, efficient use of health care
resources and prevent injuries and illness.
Fraud and abuse:
Section 6405 of the Affordable Care Act requires that physicians and
non-physician practitioners who order durable medical equipment,
prosthetics, orthotics and supplies (DMEPOS) or certify home health care
must be enrolled in Medicare. The statute also permits the Secretary to
extend these Medicare enrollment requirements to physicians and
non-physician practitioners who order or certify all other categories of
items or services in Medicare, including covered Part D drugs.
CMS is proposing to require that physicians or
non-physician practitioners who write prescriptions for covered Part D
drugs must be enrolled in Medicare for their prescriptions to be covered
under Part D.
CMS welcomes public comments to these proposed
program changes; they will be accepted from all stakeholders through the
close of business 60 days after the date of display of the proposed rule
in the Federal Register. CMS will consider these comments in developing
the final rule, which will generally be effective for Contract Year 2015
The proposed rule will be published in the Federal
Register on January 10, 2014. CMS will accept comments on the proposed
rule until March 7, 2014.
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