CMS Issues Medicare Advantage and Part D Pricing Final Rule (CMS-4180-F)

On May 16, 2019, CMS issued the Medicare Advantage and Part D Pricing Final Rule (CMS-4180-F) which is aimed at providing greater transparency in prescription drug costs and enabling Medicare Advantage (MA) plans to negotiate better pricing for physician-administered medicines. The significant provisions of the final rule include the following:

  • The final rule codifies existing policy regarding Part D prior authorizations and step therapy requirements.  Step therapy is a process that requires beneficiaries to use certain medications which are usually lower cost or generic medications prior to a “step up” to another costlier medication.  Part D sponsors are not permitted to impose prior authorization or step therapy requirements for the class of drugs identified as antiretrovirals which are commonly used to treat HIV.
  • CMS is requiring that each Part D plan adopt one or more Real Time Benefit Tools (RTBT) capable of integrating with at least one prescriber’s ePrescribing system or electronic health record (EHR), no later than January 1, 2021. RTBTs are capable of informing prescribers when lower-cost alternative therapies are available under the beneficiary’s prescription drug benefit.
  • CMS is finalizing regulations under which MA plans could implement step therapy for Part B drugs as a utilization management tool. CMS believes that this will result in Medicare beneficiaries paying less overall or per unit for Part B drugs.
  • Effective January 1, 2021, CMS will require Part D Explanation of Benefits to include drug price increases and lower cost therapeutic alternatives to enable beneficiaries to better understand their choices for lower cost prescription medications.
  • The final rule also prohibits “gag clauses” in pharmacy contracts.  Specifically, Part D sponsors are restricted from prohibiting or penalizing a pharmacy from disclosing a lower cash prescription price to an enrollee.

CMS is also codifying a policy whereby beneficiaries can select an MA plan that negotiates medication pricing when the beneficiary is starting on the medication. For a fact sheet on the final rule, visit: https://www.cms.gov/newsroom/fact-sheets/medicare-advantage-and-part-d-drug-pricing-final-rule-cms-4180-f.  The final rule (CMS-4180-F) can also be downloaded from the Federal Register at: https://www.federalregister.gov/documents/2019/05/23/2019-10521/modernizing-part-d-and-medicare-advantage-to-lower-drug-prices-and-reduce-out-of-pocket-expenses.

For further information about this posting or for any of your Medicare compliance needs, please contact NuQuest.