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Medicare and Medicaid News

Medicare Officials Back Away From Changes to Prescription Drug Plan

By Mary Agnes Carey, Kaiser Health News,
Capsules: The KHN Blog

March 10, 2014 - Facing heavy bipartisan opposition on Capitol Hill as well as from patient groups, businesses, insurers and others, the Centers for Medicare & Medicaid Services said Monday it did not plan to move ahead “at this time” with several proposed changes to the Medicare prescription drug program.

The draft regulation, which had been released in January, would have wide-ranging impact on the drug program, also known as Part D, including new limits on the number of plans insurers could offer consumers and new rules about what drugs those plans must cover. It also would prohibit exclusion of pharmacies from a plan’s “preferred pharmacy network” as long as the pharmacies agreed to the plan’s terms and conditions.

During the rule’s comment period, which closed March 7, CMS received “numerous concerns about some elements of the proposal” from lawmakers and stakeholders, CMS administrator Marilyn Tavenner said in a letter to Congress.


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“Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time,” Tavenner said, adding that the agency will “engage in further stakeholder input before advancing some or all of these changes in these areas in future years.”

The agency will, however, move forward with other elements of the rule, she said,  including those aimed at ensuring access for beneficiaries during natural disasters, reducing fraud and broadening the release of Part D data that does not identify beneficiaries.

Currently, Medicare has six protected drug categories. CMS proposed to eliminate two of those starting in 2015 with antidepressant drugs and those that help suppress the immune system. The agency also said in the draft rule that it was considering dropping protected status for antipsychotic drugs in 2016. Lawmakers in both parties and representatives of patient groups pushed back loudly, saying that making those changes could stop patients from getting the drugs they need.

CMS maintains that safeguards in current law will ensure that patients receive necessary medications, and point out that 140 other classes of drugs are offered through the prescription drug program, even though they are not covered by protected status.  CMS also says that special status hurts the prescription plans’ ability to negotiate discounts with drug makers.

Another element of the proposed rule would allow insurers to offer no more than two prescription drug plans – one basic plan and one enhanced – in the same service area. The health law’s ongoing closing of  the Part D “doughnut hole,” the gap in coverage where seniors pay the full cost of coverage before the plan’s catastrophic cap kicks in, “has reduced the need for plans offering enhanced benefits,” according to CMS.

The agency says that each region of the country now has on average nearly three dozen plans and reducing that would help give beneficiaries more clarity about the differences among plans. Critics of the proposal said it would limit seniors’ choices for coverage.

CMS’ plan was attacked on several fronts. A coalition of more than 370 groups representing seniors, patients, health care providers and employers wrote a letter to Tavenner in opposition. A bipartisan majority of the Senate Finance Committee told  Tavenner they were “perplexed as to why [CMS] would propose to fundamentally restructure Part D by requiring immediate, large-scale changes to the program that have direct consequences for beneficiaries.” 

Republicans on the House Energy and Commerce panel sounded similar concerns. And, Rep. Renee Ellmers, R-N.C., a member of the House leadership team, introduced legislation that would stop CMS from moving forward with the rule’s prescription drug provisions. The bill is scheduled for a floor vote Tuesday.

Rep. Sander Levin of Michigan, the ranking Democrat on the House Ways and Means Committee, said the administration’s decision to not “finalize the most controversial proposals in the Part D proposed regulation shows they have listened to stakeholder comments.” He suggested that Ellmers’ bill “would be a gross overreach.”

Some congressional Democrats, facing a tough  midterm election battle, were nervous that a battle on changes to the Medicare drug program could make them even more vulnerable.

Republicans have made repeal of President Barack Obama’s health care law central to their campaign to take control of the Senate and keep the House in the fall elections. The idea of eliminating some Part D plans because they are duplicative of current offerings — CMS’s rationale for the proposed change — has helped Republicans revive criticism of the president’s “if you like your plan you can keep it” pledge on the health law.

>> Copy of letter from CMS administrator Marilyn Tavenner

Some of this information is reprinted from with permission from the Henry J. Kaiser Family Foundation. You can view the entire Kaiser Daily Health Policy Report, search the archives and sign up for email delivery. © Henry J. Kaiser Family Foundation. All rights reserved.


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