CMS has issued a proposed rule affecting Medicare Advantages and Medicare Part D prescription drug plans.
The agency aims to increase transparency, bring down drug costs for seniors through cost sharing changes, and bring other benefit flexibilities to MA plans. It also issued Part II of the 2021 Advance Notice for MA rates and Part D payment policies on Feb. 5. The agency expects $4.4 billion in savings to the government over a decade through the proposed changes.
According to CMS, the changes aim to lower beneficiary cost sharing and will let some beneficiaries know their out-of-pocket costs in advance for comparisons for different prescription drugs. Medicare Advantage plans will see a 0.93% plan revenue increase in 2021 under the Advance Notice, compared to the 2.53% increase this year.
Specifically, Medicare Part D plans would be required to provide real-time drug price comparison tools beginning Jan. 1, 2022. Ideally, beneficiaries will be able to comparison shop drug prices at doctor’s offices and find the best choice for them. They could also look up their copay responsibilities when they are prescribed a specific drug in the office and look for similar, effective drugs at a lower cost.
“In addition to giving those with kidney disease more choices, today’s proposals shed desperately needed light on previously obscured out of pocket costs for prescription drugs,” CMS Administrator Seema Verma said in a statement. “At the same time, it strengthens plans’ negotiating power with prescription drug manufacturers so American patients can get a better deal.”
Cost sharing and transparency
Also mixed into the proposed rule is a plan to split certain drugs in Medicare Part D drug plans into another tier. Current plans divide drugs into different tiers based on the plan formularies, with high-cost drugs all placed together on a specialty tier with the same cost sharing level. The proposal allows for a preferred specialty tier with lower cost sharing, potentially giving plans “more tools to lower out-of-pocket costs for enrollees.”
CMS believes that if beneficiaries have more information about their cost sharing responsibilities upfront and are able to view lower-cost options, such as generic drug alternatives, the plans will save money. Having these options and pricing information accessible in advance will help incentivize beneficiaries to choose lower-cost drug options, CMS surmised in the proposals. The agency has issued other policies in the past pushing drug price transparency, including requiring hospitals to post their negotiated rates online for patients to view and comparison shop ahead of procedures. The industry has pushed back with lawsuits.
The proposed rule also requires Part D plans to disclose to CMS how they evaluate pharmacy performance in their network agreements. These evaluation measures have been criticized as being unattainable or unfair by pharmacies. CMS will also report these measures publicly in transparency efforts and to promote an industry standard. The agency is also looking for feedback on these Part D performance measures as well as recommendations for future Part D Star Ratings metrics.
Kidney disease changes and rural options
The Trump administration has made an effort to overhaul kidney disease care, or end-stage renal disease, in the U.S., and the new proposal also touches on offering more options to these patients. The proposed rule would give all beneficiaries with ESRD the option to enroll in Medicare Advantage starting in 2021. Currently, these patients are only allowed to enroll in MA plans under limited circumstances.
“Whether you’re a senior dealing with kidney disease, living in a rural area, facing high costs because you need a specialty drug, or just want a better sense of what you’ll owe for prescription drugs, these new CMS proposals will improve your Medicare experience,” said HHS Secretary Alex Azar.
Kidney care in MA has been an issue of contention for some industry groups, including the Better Medicare Alliance, an organization that supports MA and has more than 143 ally organizations. The group commented it was “unclear” if the proposed rule would address the issue of funding for ESRD patients, as MA has been criticized for inadequate funding for this disease.
In addition, MA beneficiaries will be offered more telehealth benefits not offered through Medicare fee-for-service, meaning they can receive more care at home. CMS wants to allow more telehealth benefits in MA plans and proposes advancing these in psychiatry, neurology or cardiology. This will also benefit seniors in rural areas.
BMA was supportive of advanced telehealth benefits.
“While Better Medicare Alliance continues to review the proposed regulation, we note that CMS has offered reforms that improve network adequacy by allowing greater use of telehealth – a solution long championed by BMA,” Allyson Schwartz, president and CEO of BMA, said in a statement.
Find the proposed rule here.
See the Advance Notice here.