CMS proposed rule seeks to lower Medicare Part D prescription drug costs

Photo: Shana Novak/Getty Images

In a move intended to lower out-of-pocket prescription drug costs for beneficiaries, the Centers for Medicare and Medicaid Services issued a proposed rule Thursday updating the Medicare Advantage and Medicare Part D programs, tasking the former with being more transparent in how it spends money on supplemental benefits, and the latter with applying price concessions from drugmakers to the point of sale.

Along with placing a stronger emphasis on those who are dually eligible for Medicare and Medicaid, CMS expects the regulatory changes to improve beneficiaries' experiences with MA and Part D, calling it a "higher standard" in terms of offering benefits and improving health equity.

CMS Administrator Chiquita Brooks-LaSure said in a statement that the proposed actions "follow our guiding principles by improving health equity and enhancing access to prescription medications."

The changes would be set to take effect in 2023.

WHAT'S THE IMPACT

In recent years, more Part D plans and pharmacies have entered into arrangements – called price concessions – in which plans pay less money to pharmacies for dispensed drugs if the pharmacies do not meet certain metrics. But there's no public visibility on these pharmacy price concessions, and these lower prices are not passed along to the beneficiary at the point of sale. 

In late 2018, CMS sought comment on a policy that would require Part D plans to apply all price concessions they receive from network pharmacies at the point of sale, which it said would reduce beneficiary cost-sharing. Having considered the comments, CMS is now proposing this policy, which would take effect January 1, 2023, to reduce beneficiaries' Medicare Part D out-of-pocket costs and improve price transparency and market competition.

The proposed rule also targets dually eligible beneficiaries who are enrolled in Dual Eligible Special Needs Plans (D-SNPs). D-SNPs are plans offered by MA organizations that enroll individuals who are eligible for both Medicare and Medicaid. 

The proposed rule would require that MA organizations with a D-SNP establish, maintain and consult with one or more enrollee advisory committees to ensure the experiences of people with both Medicare and Medicaid are considered in plan decision making. The rule would also simplify materials that describe how to access Medicare and Medicaid services and streamline the grievance and appeals processes in certain D-SNPs. 

The rule also proposes a change to MA cost-sharing rules expected to result in more equitable payments to providers who serve dually eligible individuals. CMS said it may improve dually eligible individuals' access to providers.

And in a bid to reduce health disparities, CMS is proposing that all MA special needs plans solicit information about an individual's barriers to accessing care, through standardized questions in required health risk assessments on housing instability, food insecurity and transportation. The rule also seeks to protect people with Medicare by ensuring they receive accurate and accessible information about Medicare coverage. For example, CMS is proposing to strengthen oversight of third-party marketing organizations that act, directly or indirectly, on behalf of MA organizations and Part D sponsors. These changes include requiring that MA and Part D plans provide information in all required beneficiary communications about the availability of free translation services.

CMS is also proposed requiring that plan applicants demonstrate a sufficient network of contracted providers to care for beneficiaries. The agency also wants to limit MA plans' ability to expand or enter into new contracts if their previous performance is poor.

Additionally, CMS seeks to provide greater transparency regarding the amounts used to provide supplemental benefits – e.g., dental, vision, hearing, transportation and meals – by requiring MA and Part D plans to expand reporting of information on the percent of plan revenue spent on patient care and quality improvement activities, known as the medical loss ratio.

THE LARGER TREND

A year ago, in January 2021, CMS issued a final rule requiring Part D plans to offer a real-time benefit-comparison tool starting January 1, 2023. CMS said at the time the rule was meant to strengthen and modernize the Medicare Advantage and Part D prescription drug programs so enrollees can obtain information about lower-cost alternative therapies under their prescription drug benefit plan.

The agency said it expected the changes will result in an estimated $75.4 million in savings to the federal government over 10 years.
 

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Email the writer: jeff.lagasse@himssmedia.com