CMS seeks to tame 'outliers' in preferred Medicare drug plans
An increasingly popular strategy in drug plan affordability is again coming under scrutiny from Medicare regulators concerned that some urban seniors are being left out.
In its 2016 Medicare Advantage proposal, the Centers for Medicare & Medicaid Services is promising to keep probing the use of preferred networks in Medicare drug plans with the goal of sculpting away outliers--and the possibility of revising access standards in the future.
Since the late 2000s, a number of independent pharmacies have complained about Part D plans "not providing their enrollees with reasonable access to network pharmacies that offered preferred cost sharing," as CMS described.
In 2011, less than 10 percent of Part D stand-alone drug plans had preferred pharmacies, according to the Kaiser Family Foundation. By 2015, "preferred cost sharing pharmacies," as CMS calls them, were offered in more than 85 percent of stand-alone Part D plans and more than 27 percent of Medicare Advantage Prescription Drug plans.
It's prompted the National Community Pharmacists Association to seek an "any willing pharmacy" requirement for drug plans to accept pharmacies in-network if they agree to the same rates inked with preferred retailers, like Walmart or CVS.
For regulators, the rise of preferred pharmacy networks has brought concerns "that beneficiaries might be misled into selecting plans based on advertised low preferred cost sharing only to find later that no preferred cost sharing pharmacies were located within a reasonable distance from their residence," the reasonable standard being that 90 percent of beneficiaries have preferred access within two miles of home.
Last year, CMS proposed an idea to set new requirements for preferred pharmacy networks, including an "any willing" provider provision. But then it withdrew the proposal, along with changes to the protected statuses of three drug classes and a limit on the number of Part D plans.
The agency did broaden its audit authority, expand drug pricing standards to maximum allowable cost drug lists, and add requirements for mail order pharmacy benefits. Regulators also commissioned a study of preferred cost-sharing pharmacies, to the probe extent of access problems for beneficiaries around the country.
The study found that the "great majority" of seniors in suburban and rural America can easily buy a plan with a preferred cost-sharing pharmacy. 87 percent of plans met the suburban requirement, to ensure that 90 percent of enrollees could access a preferred retail store within five miles of home; 75 percent of plans met the rural standard to ensure access for at least 70 percent of enrollees.
But in cities and urban areas, the study found, "some plans do not provide convenient access" based on the 90 percent standard. "Of the 54 percent of plans not meeting the 90 percent standard, some plans provide extremely low convenient access to a pharmacy with preferred cost-sharing," CMS said in a presentation. Of the plans, only 103 were offering access to a preferred cost sharing pharmacy within 2 miles to less, and to less than 30 percent of beneficiaries.
"While we appreciate the importance of providing lower costs to beneficiaries, these findings reinforce CMS' concern that plans are offering access to pharmacies with lower cost-sharing in a way that may be misleading to beneficiaries, in violation of CMS requirements. In addition to providing meaningful levels of access, plan sponsors must also provide a uniform set of benefits throughout the plan service area."
In the 2016 Medicare Advantage proposal, regulators said they are taking a "two-pronged approach to ensuring that beneficiaries are clearly informed of their options," by way of some information disclosures and collaboration with individual sponsors.
For starters, CMS is going to publish information on preferred pharmacy network access levels for each plan offering preferred cost-sharing benefits. It is also going to use the bid review process to "work with plans whose PCSP networks are outliers," those in the bottom 10th percentile compared to all Part D plans in given geographic type. The goal will either be to increase access to preferred cost sharing pharmacies in those areas or "prevent plans from marketing themselves as offering preferred cost sharing in areas where the benefit is not meaningfully available."
"CMS will continue to monitor access levels to PCSPs subsequent to the bidding process, and we may consider broadening our outlier review to include additional plans in the future," the agency wrote.
Among recent Medicare drug plan controversies, Aetna found itself in a skirmish with with independent pharmacists, after making preferred pharmacy network changes that affected about 400,000 of 1.5 million Part D members. "It was all approved, but it got pushback in the marketplace," as CEO Mark Bertolini said.
After both pharmacy and consumer complaints about temporary information mix-ups in the plan directories, CMS worked with Aetna to require a corrective action plan; the insurer ended up giving its Part D members in-network access to its broadest network through the end of February and the option to switch plans or find a new pharmacy.
