CMS Will Not Move Forward With Four Controversial Provisions in Recent Part D Proposed Rule

by King & Spalding
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On March 10, 2014, CMS Administrator, Marilyn Tavenner, sent a letter to Rep. Sander Levin (D-Mich), the Ranking Member of the House Ways and Means Committee, stating that CMS has decided not to finalize four controversial proposals in the proposed rule published on January 10, 2014, on the Medicare Advantage (Part C) and Part D Prescription (PDP) Drug Programs. The four controversial proposals involved:  (i) determining that three drug classes (anti-depressants, immunosuppressants used for organ rejection and anti-psychotics) should lose their protected class status that requires Part D plans to cover all or substantially all drugs in these classes; (ii) clarifying that the non-interference provision does not apply to negotiations between PDP sponsors and pharmacies; (iii) reducing to two the number of Part D plans that a Part D sponsor may offer; and (iv) revising requirements for pharmacy participation in Part D plan preferred pharmacy networks.   

These four controversial proposals have created significant industry concern and political backlash.  After CMS published its proposed rule on January 10, 2014, Rep. Renee Ellmers (R-NC) introduced legislation in the House on March 6, 2014, aimed at preventing CMS from making the proposed controversial changes.  The next day, Republicans from the House Energy and Commerce Committee sent Administrator Tavenner a letter expressing concern that millions of seniors would lose their Part D plans and could be forced to pay more for prescription drugs, and stating that if CMS failed to rescind the proposed rule immediately, the signatories would move the legislation through the House to block the proposed rule. 

Although CMS rescinded the four controversial proposals, Administrator Tavenner’s letter makes clear that CMS nonetheless intends to finalize other proposals contained in the January 10, 2014 proposed rule, including provisions related to “consumer protections (e.g., ensuring access to care during natural disasters), anti-fraud provisions that have bipartisan support (e.g., strengthening standards for prescribers of prescription drugs), and transparency (e.g., broadening the release of privacy-protected Part D data)” after taking into consideration comments received.

Click here to view the March 10, 2014 letter from Administrator Tavenner, and here to view the March 7, 2014 letter from House Republicans.  For a copy of the January 10, 2014 proposed rule, click here, and to view a copy of H.R. 4160, click here

Reporter, Kate Stern, Atlanta, +1 404 572 4661, kstern@kslaw.com.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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