Health Law Daily Better drug management, spending to result in Part C and D savings
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Tuesday, January 19, 2021

Better drug management, spending to result in Part C and D savings

By Anthony H. Nguyen, J.D.

CMS expects an estimated $75.4 million savings to the federal government over 10 years.

Effective March 22, 2021, and applicable to coverage beginning January 1, 2022, CMS codified a number of Medicare Advantage (MA) and Part D policies, found in previously issued subregulatory guidances, under a newly published final rule. According to CMS, the final rule will allow MA organizations and Part D plan sponsors to develop more innovative plan designs. Pharmacy performance measures, used to evaluate pharmacies within a network, will be made publicly available to increase transparency, not only to the public, but to pharmacies. Additionally, Part D changes include establishing real-time comparison tools by January 1, 2023, and specialty tiers of prescription drug plans (Final rule, 86 FR 5864, January 19, 2021).

Background. In June of 2020, CMS issued a final rule, titled Contract Year 2021 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, and Medicare Cost Plan Program, implementing a subset of the proposals from a February 2020 proposed rule (see Access, transparency part of Medicare Part C, D changes, February 18, 2020, and Ahead of bid deadlines, CMS implements subset of Part C, D proposals, June 2, 2020). The June 2020 final rule implemented changes to Medicare Part C and D prior to a contract year 2021 bid deadline as required under the Bipartisan Budget Act of 2018 (BBA of 2018) and the 21st Century Cures Act (Cures Act). Notably, the June 2020 final rule implemented only a subset of the proposals from an earlier proposed rule, as CMS intended to address all of the remaining proposals in subsequent rulemaking.

In the second final rule (January 2021 final rule), CMS addresses the remaining proposals, with a few exceptions, from the February 2020 proposed rule. Under the January 2021 final rule, most provisions will be applicable to coverage that begins January 1, 2022.

As part of an initiative to increase efficiencies and the beneficiary experience, CMS will codify policies in the MA and Part D programs that were previously included in subregulatory guidance. According to CMS, codification of the policies will provide additional transparency and program stability, and allows MA organizations and Part D plan sponsors to develop more innovative plan designs.

Pharmacy performance. Currently under Part D, plans do not have to disclose to CMS measures used to evaluate pharmacy performance in their network agreements. Addressing concerns from pharmacies that certain Part D plan sponsor performance measures may be unattainable or unfair, resulting in impact on pharmacy reimbursements, CMS will require Part D plan sponsors, starting January 1, 2022, to disclose the performance measures used to evaluate pharmacies. CMS intends to report these pharmacy performance measures 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.

SUPPORT Act. The Final rule implements several provisions of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act requiring Part D plans to educate beneficiaries on opioid risks, alternate pain treatments, and safe disposal of prescription drugs that are controlled substances, including opioids. Drug management programs and medication therapy management programs under Part D are also expanded.

Beneficiary Real Time Benefit Tool. Part D plan sponsors must offer real-time comparison tools to enrollees starting January 1, 2023, so enrollees have access to real-time formulary and benefit information, including cost-sharing, to shop for lower-cost alternative therapies under their prescription drug benefit plan. The tool must allow enrollees the ability to compare cost sharing in order to find the most cost-effective prescription drugs. CMS noted, for example, that if a doctor recommends a specific cholesterol-lowering drug, the enrollee could look up what the copay would be and see if a different, similarly effective option might save the enrollee money.

Specialty tier. Under the January 2021 final rule, beginning January 1, 2022, CMS will allow Part D plans to have a second, "preferred" specialty tier with a lower cost sharing amount than their other specialty tier. The change is intended to permit Part D plans more tools to negotiate better deals with manufacturers and lower out-of-pocket costs for enrollees in exchange for placing those products on the "preferred" specialty tier.

PACE expansion. The January 2021 Final rule will also reduce the administrative requirements for Programs of All-Inclusive Care for the Elderly (PACE) organizations related to the service determination request process, improve participants’ care and experience, including the participant appeals process and participant rights, and strengthen requirements related to the provision of services and record keeping.

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