On January 6, 2014, the Centers for Medicare & Medicaid Services (“CMS”) released a proposed rule: “Contract Year 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs” (the “Proposed Rule”). The Proposed Rule is expected to be published in the Federal Register on January 10, 2014. Public comments are due to CMS by 5 p.m. EST March 7, 2014. Among other things, the Proposed Rule would “limit ‘protected’ drug classes to those for which access to all drugs in a category or class for a typical individual with a disease or condition treated by the drugs in the class is required within 7 days and more specific formulary requirements would not suffice to meet multitude of specific applications of the drugs within the category or class.” CMS proposes that the antidepressant class and the immunosuppressant class would no longer be “protected” and that continued protection of the antipsychotic class beyond 2015 would not be certain.
Since the inception of the Medicare Part D program, CMS has “protected” six classes of drugs in connection with Medicare’s outpatient drug benefit. Specifically, CMS has required Medicare Part D plans to include “all or substantially all” drugs in the following designated classes “of clinical concern” on their formularies: anticonvulsants, antidepressants, antineoplastics, antipsychotics, antiretrovirals, and immunosuppressants. While plans have continued to have some discretion in formulary design and tiering within these classes, they have been prevented from completely blocking drugs in these classes from coverage, subject to very limited exceptions.
The Affordable Care Act (or “ACA”) codified the need to protect certain categories and classes of drug coverage under Medicare Part D, but stopped short of specifically designating any particular categories or classes as protected. Under 42 U.S.C. 1395w-104(b)(3)(G) (as amended by the ACA), CMS is directed to require Part D drug coverage where: “(I) Restricted access to drugs in the category or class would have major or life threatening clinical consequences for individuals who have a disease or disorder treated by the drugs in such category or class[; and] (II) There is significant clinical need for such individuals to have access to multiple drugs within a category or class due to unique chemical actions and pharmacological effects of the drugs within the category or class, such as drugs used in the treatment of cancer.”
Accordingly, in the Proposed Rule, CMS proposes the criteria it would use to identify drug categories or classes of clinical concern, as well as certain exceptions that may permit Part D sponsors to exclude certain Part D drugs from within an identified drug category or class from their formularies (or otherwise limit access to such drugs, including through utilization management or prior authorization restrictions). Significantly, CMS also proposes that, for coverage year 2015, the “drug categories and classes of clinical concern that meet the proposed criteria … are anticonvulsants, antiretrovirals, and antineoplastics.” CMS further states that “the antipsychotic drug class will continue to be treated as a class of clinical concern in 2015 and until CMS determines that it is appropriate to apply the criteria with respect to the antipsychotics.” The Proposed Rule includes a discussion as to CMS’s determination to discontinue protection of the antidepressants and immunosuppressant classes. If implemented, this proposal may have longer-term implications for drug rebate contracting strategies and health plan formulary designs within these classes, with potential spillover into commercial plan designs.
CMS also proposes a number of other significant “policy” and “technical” changes to the Medicare Parts C and D programs, including, without limitation, proposals intended to:
- establish U.S. citizenship and lawful presence as an eligibility requirement for enrollment in MA and Part D plans;
- revise agent and broker compensation to: “simplify the administration of these payments and reduce incentives for agents and brokers to encourage beneficiaries to enroll in plans without regard to ensuring plan benefits would meet the beneficiaries’ health care needs” and also to “amend the training and testing requirements as well as setting limits on referral fees for agents and brokers”;
- implement the ACA requirement that MA organizations and Part D sponsors report and return identified Medicare overpayment; and
- strengthen existing regulations at 42 C.F.R. §422.310 on MA plan sponsors’ accountability for valid risk adjustment data prior to submission.
We encourage all entities interested in Medicare Parts C and D, including manufacturers, health plans, and providers, to carefully review the Proposed Rule and offer comments to CMS as appropriate.