The Centers for Medicare & Medicaid Services is proposing a number of new tweaks and more stringent requirements for Medicare Part D, hoping to save more than $1 billion over five years.
The proposals, in a 678 page batch of regulations, include changes to the definition of protected classes of drugs and their negotiated prices, required enrollment for physician and nonphysician providers writing prescriptions billed to Part D, and a new "fair market value" broker compensation system.
Covering beneficiaries with both Medicare Advantage and Part D, the proposed rules would take effect for the 2015 federal contract year and would save $1.3 billion over five years if finalized, according to CMS estimates.
For protected drug classes, CMS regulators are proposing to "codify criteria for identifying categories or classes of drugs that are of clinical concern," and to "assess whether it remains appropriate to require this additional level of protection."
The type of system could help reign in a number of problems with the protected classes regulations, CMS regulators said. "We believe the profitability of products not subject to normal price negotiations as the result of protected class status is a strong incentive for the promotion of overutilization, particularly off-label overutilization, of some of these drugs."
Rather than "mandating coverage of all drug products in a particular class," the regulators wrote, "we can save costs by identifying more efficient formulary requirements or other beneficiary protections in most cases."
Drug categories and classes "should be subject to normal formulary and price competition," the regulators wrote -- unless "we cannot ensure clinically appropriate access (and thus non-discriminatory benefit design) to our Medicare beneficiaries in any less anticompetitive way than requiring the inclusion on all Part D formularies of all drugs in that category or class."
As part of the criteria, the agency is proposing including five beneficiary protections covering formulary transparency, reassignment notices, transitional notices, and coverage determination and appeals processes.
The only "clinical concern that would arise," the regulators wrote, is if access within a certain class for a beneficiary starting therapy would need to be obtained in less than 7 days, in which case those beneficiaries would retain protected classes, according to the proposal.
As for the new protected drug criteria, CMS is proposing to remove three classes -- antidepressants, antipsychotics, immunosuppressants -- while keeping protections for anticonvulsants, antineoplastics, and antiretrovirals. Those usually must be administered immediately, in less than 7 days, because of the risk of hospitalizations, and, since they're used in so many applications, alternative formulary requirements "is not feasible," CMS regulators wrote.
On the Part D plan sponsor side, in 2016 CMS is proposing to limit sponsors to selling no more than 2 plans per region. In one part of the rules, CMS criticizes some of the recent entrants into the Part D market. "Our interaction with these novice sponsors leads us to believe that they underestimate the value of clinical expertise in administering Part D benefits, particularly in conducting effective coverage determination and appeals processes."
The enrollment data suggests that "beneficiaries are already making plan choices based on their recognition of the shrinking significance of the coverage gap and with it, the value of PDP sponsors' second enhanced plans," CMS regulators wrote.
As for how the government, through those plans, pays agents, the new "fair market value" could be less than or equal to about $430 in fiscal year 2014 dollars, the regulators suggested.
"In addition to its complexity, we are concerned that the current structure creates an incentive for agents and brokers to move enrollees from a plan of one parent organization to a plan of another parent organization, even for like plan type changes," CMS regulators wrote.
And on the anti-fraud front, CMS is proposing to end what some have called a loophole that lets providers write scripts without enrolling in Medicare, and the agency is also claiming the authority to ban from the program providers found to be practicing "abusive prescribing."
"In our view, if a physician or eligible professional repeatedly and consistently fails to exercise reasonable judgment in his or her prescribing practices, we should have the ability to remove such individuals from the Medicare program to protect beneficiaries' safety and health as well as Medicare Trust Funds," they wrote.