CMS Takes Action to Lower Drug Prices, Permits Step Therapy

I have been known to utter “holy cow” in my day, and the recent Centers for Medicare & Medicaid Services (CMS) Health Plan Management System (HPMS) memo allowing step therapy for Part B drugs was the reason for my most recent exclamation. Who saw this coming?

The first sentence of the memo reads, “CMS is hereby rescinding our September 17, 2012, HPMS memo, “Prohibition on Imposing Mandatory Step Therapy for Access to Part B Drugs and Services.” Holy cow. For some time, the Part B versus Part D issue has been the bane of Medicare Advantage (MA) plans. CMS has tried over the years to ease that pain by issuing guidance on when a drug can be billed as Part B and when it should be billed as Part D. As late as the 2017 Call Letter, CMS reminded us of the new 2016 requirements at 42 CFR §422.112(b)(7), which require all plans to establish and maintain “a process to ensure timely and accurate POS transactions, and to issue a decision and authorize or provide the benefit as appropriate under Part B or Part D when a party requests a coverage determination.” So why the about-face on requiring expediency in dispensing Part B drugs? It all comes down to cost containment.

Step therapy has been a mainstay in Part D drug utilization management to help contain the cost of medications. The idea is for the beneficiary to use an effective and less expensive drug before moving onto more costly therapies. This makes good sense. Why pull out a flame-thrower when a match will work? Historically, Part B drugs have not been subject to step therapy – providers either pulled their preferred drug from the shelf or wrote a prescription the pharmacy filled under Part B. Now Part B drugs will be subject to the same coverage determinations and appeals processes for step therapies Part D drugs have enjoyed. How might this affect what providers stock in their offices? And how about Home I.V. and Long-Term Care pharmacies? These pharmacies have had the luxury of dictating what products would be used in the past, and Part B step therapy will be a game changer as plan sponsors take back control over what is dispensed. Holy cow.

While cost containment is desired, there are also unintended consequences. Beneficiaries may experience a delay in obtaining their drugs due to determinations and appeals processes. Part D drugs are subject to coverage determinations that have a 72-hour time frame for standard determinations and 24 hours for expedited determinations. Part B drugs are subject to organization determinations. These Part B pre-service determinations have a 14-day time frame for standard requests and a 72-hour time frame for expedited requests. In last night’s memo, CMS “strongly encourages that MA plans expedite requests for exceptions in Part B to align with the 72-hour adjudication timeframe for requests in Part D.” Holy cow. Plan sponsors will need to implement a procedure for their organization determinations, appeals, and grievances staff so drugs can be given priority over other requests.

Plan sponsors will also have new Part B issues to deal with. The memo calls out the need for “interactive medication review to discuss all current medications,” which may be code for Medication Therapy Management (MTM). How will these new requirements affect MTM programs and targeting of eligible beneficiaries? Chapter 7, Section 30.2 (2) and (3), of the Medicare Prescription Drug Benefit Manual speaks to targeting Part D drugs only for both numbers of drugs being taken and dollar amount thresholds. Is the expectation that Part B drugs be added to these targeting thresholds?

And last but not least is the job of actually developing Part B step therapy criteria. Local Coverage Determinations (LCDs) and National Coverage Determinations (NCDs) will still apply, and we know beneficiaries already using a Part B drug will be grandfathered in. CMS is allowing “cross-contamination” of steps. Plan sponsors may require a beneficiary to use a Part D drug before getting a Part B drug and vice versa, requiring a Part B drug before receiving a Part D drug. Can step therapies incorporate both Part B and Part D drugs within a specific step? And who will review exception requests – the organization determination team or the coverage determination team – when both Part B and Part D drugs are incorporated into step therapies? Thinking about the possibilities is absolutely mind-numbing.

And, of course, the window for uploading these new step therapies is fast upon us – August 17 through August 21. Holy cow. So get those Pharmacy & Therapeutics Committees cracking! And while you’re at it, you may want to check with your Marketing Department to see how far along you are in the development of your Annual Notice of Change and Evidence of Coverage. If you can’t hold the presses to add these new step therapies, you will need extra time to develop addendums to be sent to your beneficiaries.

I am looking forward to seeing how this new twist to an already complex benefit will play out in 2019. As always, if you need help navigating the rules, regulations, and best practices, Gorman Health Group has the experts to help you.




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