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New CMS Rule Takes Aim at Drug Costs for Seniors, Opioid Crisis

Mary Caffrey
Federal regulators are asking for information that will get to the bottom of how drug discounting between pharmaceutical companies and health plans affect what seniors pay at the pharmacy counter.
Polling during the 2016 presidential contest showed that rising prescription drug costs were the one healthcare issue that united voters of every ideological stripe—by lopsided margins, Republicans, Democrats, and independents agreed that out-of-pocket costs were rising too quickly.

In response, CMS last week proposed a sweeping rule with several changes that would lower costs for Part D Medicare enrollees and give them more control over where they can get their prescriptions—with 1 big exception. The rule allows health plans to restrict access to opioids for beneficiaries who meet “at -isk” criteria, while exempting those who have cancer or are in hospice.

This change responds to the nation’s opioid crisis amid data that show a disproportionate share of abusers are enrolled in Medicare and Medicaid. Fraud crackdowns have shown the Medicare program has been targeted for opioid diversion.

Changes proposed for 2019 include:
  • Allowing health plans to send more materials to beneficiaries in electronic formats.
  • Eliminating certain administrative requirements with bids.
  • Revised regulations on maximum out-of-pocket limits.
  • Allowing mid-year changes to add generics to Medicare Advantage plans as they become available.
  • A proposal to treat biosimilars like generics when determining what beneficiaries pay out of pocket under Medicare Part D (see related story).

In addition, CMS will gather information about how the drug discount process, as complaints increase that mystery surrounding this system fails to translate to lower prices at the pharmacy counter. The rule specifically calls for getting to the bottom of what consumers pay out of pocket at the pharmacy counter and going after tiering rules so that generics are treated like generics for purposes of tiering.

The administration seeks to reduce regulatory burdens on health plans by reducing the amount of medical loss ratio data to be reported. The statement from CMS says it wants to allow plans  to take into account their fraud prevention and detection activities and their medication therapy management programs.

“This administration has been committed, from the beginning, to making sure that our seniors have more choices and lower premiums in their Medicare Advantage plans. To that end, we are adding new flexibilities that will allow seniors to choose plans that are tailor-made to their unique needs, with lower out of pocket costs,” CMS Administrator Seema Verma said in the statement. “We have also been committed to reducing unnecessary regulations that have driven up the cost of healthcare without improving care, so we are eliminating burdensome regulations on plans and providers that have stood in the way of providing quality patient care.”

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