CMS Finalizes Changes to Medicare Advantage and Part D Prescription Drug Programs

On January 15, 2021, the Centers for Medicare & Medicaid Services (CMS) finalized a rule to help strengthen and streamline the Medicare Advantage and Part D prescription drug programs, with the goal to decrease enrollee cost sharing on expensive prescription drugs. Effective for the 2022 plan year, enrollees will be able to have advance notice and thus compare out-of-pocket costs for various prescription drugs. CMS estimates the final rule will result in $75.4 million in savings to the federal government over ten years.

According to CMS, the rule will provide drug cost transparency regarding out-of-pocket costs, especially for senior citizens, who may be unaware of prescription drug prices, changes in pricing, and on a fixed income. Additionally, Part D plans will have more power to negotiate lower prescription drug prices with drug manufacturers. Under the final rule, Part D plans must offer a real time benefit comparison tool for enrollees to receive information about lower cost alternatives under their plan. Using the tool, which must be offered by Part D plans by January 1, 2023, enrollees can compare cost sharing to find the best priced prescription drugs based on their health requirements. For example, if an enrollee’s provider recommends a certain prescription drug, the enrollee can search and see what the co-pay would be, and see if any similar drugs are more cost effective, allowing the individual to know exactly what he or she will pay before reaching the pharmacy.

Currently, in the Medicare Part D program, enrollees select the plan that best suits their health needs. Plans typically categorize prescription drugs into different tiers. All prescription drugs that fall into a plan’s specialty tier, the tier with the most expensive drugs, have equivalent cost sharing. With the final rule, Part D plans will have the ability to create a “preferred”, specialty tier of more expensive prescription drugs, that have lower cost sharing compared to the other specialty tier. This change will allow Part D plans to negotiate lower prices on the more expensive drugs, resulting in reduced out-of-pocket expenses for enrollees, if the plan categorizes these drugs on the “preferred” specialty tier.

Also included in the rule are various opioid provisions from the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act. These provisions mandate Part D plans to counsel and educate patients regarding opioid risks, other treatments for pain, and the safe disposal of controlled substances. Other included provisions from the SUPPORT Act are requirements for Part D sponsors to report payment holds on pharmacies incurring fraud charges to CMS, and requirements for Part D sponsors to report improper opioid prescriptions to CMS through a secure internet site.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in Medicare and other CMS rules and regulations. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.