CMS recently published a proposed rule covering a number of policy changes to the Medicare Advantage (Part C or MA) and the Medicare Prescription Drug Benefit (Part D) Programs.  The proposed rule, which generally would affect plans beginning in 2015, is estimated to save $1.3 billion between 2015 and 2019, according to CMS. Comments on the proposed rule must be received no later than 5 p.m. on March 7, 2014. 

Among the major changes, CMS proposes to:

• Establish U.S. citizenship and lawful presence as eligibility requirements for enrollment in MA and Part D plans;

• Implement new criteria for covered drug categories or classes of clinical concern;

• Implement the Affordable Care Act requirement that MA organizations and Part D sponsors report and return identified Medicare overpayments;

• Restrict prescription drug plan sponsors to offering no more than two Part D plans in the same service area;

• Require that physicians or non-physician practitioners who write prescriptions for covered Part D drugs be enrolled in Medicare for their prescriptions to be covered under Part D; and

• Revise the definition of “negotiated prices” such that all price concessions from pharmacies are reported by Part D sponsors in a more uniform manner, which will benefit competition.

Currently, Part D sponsors are required to include on their formularies all or substantially all drugs in the following six classes or categories: antidepressants; antipsychotics; anticonvulsants; immunosuppressants for transplant rejection; antiretrovirals; and antineoplastics.  The Affordable Care Act required that those classes or categories remain in place until the Secretary established new criteria to identify drug categories or classes of clinical concern.  In the proposed rule, CMS noted concerns that this type of open coverage of certain drug categories and classes is (i) financially disadvantageous, limiting the ability of Part D sponsors to negotiate price concessions in exchange for formulary placement of drugs in these categories or classes and (ii) potentially facilitating of overutilization of drugs within the protected categories or classes, both of which can lead to increased Part D costs. 

CMS now proposes generally to limit protected classes or categories 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 such class is required within 7 days and more specific formulary requirements would not be sufficient to meet the host of specific applications of the drugs within the category or class.”  With guidance from a panel convened by CMS, CMS has proposed to (i) require formulary inclusion of all drugs within the antineoplastic, anticonvulsant, and antiretroviral drug classes (subject to proposed exceptions), (ii) no longer require all drugs from the antidepressant and immunosuppressant drug classes to be on all Part D formularies, and (iii) although they do not meet CMS’s criteria for clinical concern, retain antipsychotics in a protected class through 2015 while CMS continues its evaluation of these drugs to determine, among other things, whether additional transition is needed for individuals taking these medications.

Comments on the proposed rule must be received no later than 5 p.m. on March 7, 2014.  A CMS Fact Sheet on the proposed rule is available here, and a summary of CMS’s proposals in the rule to combat Part D fraud and abuse is available here. 

Reporter, Christina A. Gonzalez, Houston, +1 713 276 7340, cagonzalez@kslaw.com