Medicare Advantage Changes Relating to Part D and Drug Costs

CMS NEWS

FOR IMMEDIATE RELEASE

February 5, 2020

Contact: CMS Media Relations

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Proposed Changes to Medicare Advantage and Part D Will Provide Better Coverage, More Access and Improved Transparency for Medicare Beneficiaries

Proposed rule and Advance Notice continue to strengthen the popular private Medicare health and drug plans

Today the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule and the Advance Notice Part II to further advance the agency’s efforts to strengthen and modernize the Medicare Advantage and Part D prescription drug programs. The changes proposed today would lower beneficiary cost sharing on some of the most expensive prescription drugs, promote the use of generic drugs, and allow beneficiaries to know in advance and compare their out-of- pocket payments for different prescription drugs.

Together, these proposed changes advance President Trump’s Executive Orders on Protecting and Improving Medicare for Our Nation’s Seniors and Advancing American Kidney Health as well as several of the CMS strategic initiatives. The proposed changes described in the Advance Notice are expected to increase plan revenue by 0.93%.

“Whether you’re a senior dealing with kidney disease, living in a rural area, facing high costs because you need a specialty drug, or just want a better sense of what you’ll owe for prescription drugs, these new CMS proposals will improve your Medicare experience,” said HHS Secretary Alex Azar. “President Trump has been laser-focused on strengthening and protecting Medicare for our seniors, and these proposed improvements are the latest measures taken under the President’s Medicare executive order.”

As part of President Trump’s commitments to promoting price transparency and lowering prescription drug prices, the proposed rule would require Part D plans to offer real-time drug price comparison tools to beneficiaries starting January 1, 2022, so consumers could shop for lower-cost alternative therapies under their prescription drug benefit plan. For example, beneficiaries would be able to compare drug prices at the doctor’s office to find the most cost- effective prescription drugs for their health needs. In addition, if a doctor recommends a specific cholesterol-lowering drug, the patient could easily look up what the copay would be and see if a different, similarly effective option might save the patient money. With this tool, patients would be better able to know what they’ll need to pay before they’re standing at the pharmacy cash register, and pharmaceutical companies and plans would have to compete on the basis of the costs that patients face for their prescription drugs.

“In addition to giving those with kidney disease more choices, today’s proposals shed desperately needed light on previously obscured out of pocket costs for prescription drugs, “said CMS Administrator Seema Verma. “At the same time, it strengthens plans’ negotiating power with prescription drug manufacturers so American patients can get a better deal. The Trump Administration will stop at nothing to protect America’s seniors.”

In the Medicare Part D program, beneficiaries choose the prescription drug plan that best meets their needs. Many plans offering prescription drug coverage place drugs into different “tiers” on their formularies. Today, all drugs on a plan’s specialty tier – the tier that has the highest-cost drugs – have the same level of cost sharing. The proposed rule would allow a second, “preferred” specialty tier in Part D with a lower cost sharing amount. This proposal is designed to give Part D plans more tools to lower out of pocket costs for enrollees. Plans would be able to demand a better deal from manufacturers of the highest-cost drugs in exchange for placing their products on the “preferred” specialty tier.

Under the Part D program, plans currently do not have to disclose to CMS the measures they use to evaluate pharmacy performance in their network agreements. CMS has heard concerns from pharmacies that the measures plans use to assess their performance are unattainable or otherwise unfair. The measures used by plans potentially impact pharmacy reimbursements. Therefore, the proposed rule would require Part D plans to disclose such information to enable CMS to track how plans are measuring and applying pharmacy performance measures. CMS will also be able to report this information publicly to increase transparency on the process and to inform the industry in its new efforts to develop a standard set of pharmacy performance measures. CMS is also seeking comment on Part D pharmacy performance measures more broadly, including stakeholders’ recommendations for potential Part D Star Ratings metrics that could incentivize the uptake of a standard set of measures once the industry establishes one.

One way to help lower drug prices for beneficiaries is to encourage greater use of lower price generics and biosimilars. In general, plans are already achieving high utilization rates, but there is room to do better. In the Advance Notice, CMS is seeking comment on potentially developing measures of generic and biosimilar utilization in Medicare Part D as part of a plan’s star rating. This would reward plans based on the rate at which they encourage market adoption of these competitor products and lower costs for patients.

Currently, beneficiaries with End-Stage Renal Disease (ESRD) are only allowed to enroll in Medicare Advantage plans in limited circumstances. Today’s proposed rule implements the 21st Century Cures Act requirements to give all beneficiaries with ESRD the option to enroll in a Medicare Advantage plan starting in 2021. This will give patients with ESRD access to more affordable Medicare coverage choices and extra benefits such as transportation or home- delivered meals.

Starting this year, Medicare Advantage beneficiaries are able to access additional telehealth benefits not offered under Medicare Fee-for-Service, giving patients the option to receive health care services from more convenient locations, like their homes, rather than requiring them to go to a health care facility. CMS is proposing to build on the current benefits and give Medicare Advantage plans more flexibility to count telehealth providers in certain specialty areas like psychiatry, neurology, or cardiology towards network adequacy standards, which would encourage greater use of telehealth services as well as increase plan choices for beneficiaries.

These proposed changes aim to give seniors more plan choices in rural areas, increase competition between plans, and allow providers to take advantage of the latest healthcare technologies and innovations.

CMS is also proposing to enhance the Medicare Advantage and Part D Star Ratings to further increase the impact that patient experience and access measures have on a plan’s Star Rating. The Star Ratings system helps people with Medicare, their families, and their caregivers compare the quality of health and drug plans being offered. One of the best indicators of a plan’s quality is how its enrollees feel about their coverage experience. This proposal reflects CMS’s commitment to put patients first and improves incentives for plans to focus on what patients value and feel is important.

Continuing the fight against the opioid epidemic, the proposed rule implements several provisions of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act that require Part D plans to educate beneficiaries on opioid risks, alternate pain treatments, and safe disposal of opioids. The proposed rule also expands drug management programs and medication therapy management programs, through which Part D plans review with providers opioid utilization trends that may put beneficiaries at-risk and provide beneficiary-centric interventions. These provisions will help prevent and treat opioid overuse.

And finally, as part of our Patients Over Paperwork initiative to reduce unnecessary burden, increase efficiencies, and improve the beneficiary experience, in the proposed rule, CMS is seeking comment on many longstanding policies on the Medicare Advantage and Part D programs that have been adopted through sub-regulatory guidance such as the annual Call Letter and other guidance documents. CMS looks forward to feedback on the proposed rule. Comments may be submitted electronically through our e-Regulation website at: https://www.cms.gov/Regulations-and-Guidance/Regulations-and- Policies/eRulemaking/index.html?redirect=/eRulemaking.

CMS will accept comments on all proposals in the Advance Notice through Friday, March 6, 2020, before publishing the final Rate Announcement by April 6, 2020. To submit comments or questions electronically, go to www.regulations.gov, enter the docket number “CMS-2020-0003” in the “search” field, and follow the instructions for ‘‘submitting a comment.’’

For a fact sheet on the CY 2021/2022 Medicare Advantage and Part D Proposed Rule (CMS- 4190-P), please visit: https://www.cms.gov/newsroom/fact-sheets/contract-year-2021-and-2022-medicare-advantage-and-part-d-proposed-rule-cms-4190-p-1

The proposed rule can be downloaded from the Federal Register at: https://www.federalregister.gov/documents/2020/02/18/2020-02085/medicare-and-medicaid- programs-contract-year-2021-and-2022-policy-and-technical-changes-to-the

The 2021 Medicare Advantage and Part D Advance Notice Part II Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/2021-medicare-advantage-and-part-d-advance-notice-part-ii-fact-sheet-0

Medicare Advantage and Part D Advance Notice Part II, please visit:

https://www.cms.gov/files/document/2021-advance-notice-part-ii.pdf

A blog about Increasing Access to Generics and Biosimilars in Medicare will be available at  https://www.cms.gov/blog/increasing-access-generics-and-biosimilars-medicare