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CMS decides against allowing Medicare plans to limit coverage of “protected class” drugs. This past month brought some welcome news from the U.S. Centers for Medicare and Medicaid Services. On May 16, CMS released a final rule on drug pricing in the Medicare Advantage and Medicare Part D programs. In that final rule, CMS chose not to implement a harmful change it had initially put forward – a change strongly opposed by HFA and numerous other patient groups.
Longstanding federal policy requires Medicare Part D plan sponsors to cover all available drugs in six “protected classes.” Two of those classes are of particular interest to the bleeding disorders community: antiretrovirals and immunosuppressants for treatment of transplant rejection.
CMS in late 2018 had proposed to abandon that longstanding policy, and to allow Medicare plan sponsors to limit coverage of drugs in the protected classes. The proposed rule would have permitted Part D plans to impose prior authorization and step therapy requirements; to exclude new formulations of drugs; and to exclude drugs with price increases above a specified rate.
HFA and many other patient advocacy groups strongly opposed this proposed rule. HFA and NHF filed joint comments with CMS, pointing out that restricting patient access to antiretrovirals and/or immunosuppressants would:

• reduce treatment options for especially vulnerable Medicare beneficiaries,
• disrupt care and worsen health outcomes, for example:

  • increasing the risk of developing resistance to available antiretroviral drugs,
  • endangering individuals at risk for organ transplant rejection, and

• give health plans a potent new way to discriminate against people with costly health needs via formulary design.

Fortunately, CMS ultimately chose not to finalize these damaging Part D changes. Instead, CMS decided to maintain its previous policy requiring plans to include on their formularies all drugs in the six protected classes.
CMS’ final rule also codified a separate year-old policy allowing Medicare Advantage plans to implement step therapy for Part B drugs (a category that includes clotting factor and other hemophilia treatments). HFA and NHF opposed this portion of the proposed rule, too, voicing our shared concern that step therapy is always inappropriate in the context of treatments for bleeding disorders. While the final rule continues to permit the use of step therapy for Part B drugs, it does include some safeguards to protect Medicare beneficiaries. Medicare Advantage plans:

• will be permitted to apply step therapy requirements only to new starts of medication (i.e., patients on an existing drug therapy must be allowed to continue using that medication),
• will have to ensure that any step therapy protocols are reviewed and approved by the plan’s pharmacy and therapeutics committee, and
• will have to adjudicate patient requests for exceptions and appeals from denials within strict timeframes.

Quick Hits:

• The U.S. House of Representatives passed HR 987 on May 16. Drawing from a number of previously-introduced bills, HR 987 combines measures to bolster the ACA with provisions that aim to facilitate the development and marketing of generic drugs. On the ACA front, HR 987 would roll back the Administration’s short-term plan rule (incorporating provisions from HR 1010) and would provide new funding for outreach and navigation efforts in the ACA Exchanges. The Administration has expressed strong opposition to HR 987, however, and a Senate bill to limit short-term plans failed to win passage on May 22.
• The past month saw a welcome increase in bipartisan attention to the problem of “surprise billing.” The White House, and various bipartisan groups of lawmakers in the Senate and the House, released competing proposals in May. All sides generally agree on the need to protect patients against unexpected bills for out-of-network medical services, but they disagree over how to resolve disputes between insurers and providers (hospitals, doctors, etc.) with respect to the underlying charges. Two possibilities under consideration: have regulators set payment rates for out-of-network providers – or have the government establish an arbitration process.
• On May 23^rd, Senators Alexander and Murray introduced bipartisan “discussion draft” legislation to reduce health care costs. The Alexander-Murray bill, too, attempts to solve the surprise billing problem. In addition, this bill includes provisions to: prevent patent law abuses and promote the availability of biosimilar drugs; improve price transparency in the health care market; support disease prevention efforts; and improve patient access to their personal medical records.
• The House Energy & Commerce and Ways & Means committees released draft bipartisan legislation to cap seniors’ out-of-pocket costs for prescription drugs under Medicare Part D. The draft bill would increase insurers’ share of drug costs once enrollees enter the catastrophic coverage stage of their plans. The Senate Finance Committee is considering a similar approach.
• On May 1, the Congressional Budget Office (CBO) issued a report outlining key design components and considerations that would be involved if the U.S. sought to move to a single-payer health care system. The report comes to no conclusions, other than that such a move would be a major undertaking and involve a myriad of policy choices. CBO describes some of the health systems that are in place in other developed countries, and enumerates some of the choices that U.S. policymakers would have to make with respect to scope of benefits, how to pay for the system, who would be eligible for coverage, what role (if any) private insurers might play, etc., if the U.S. were to adopt some form of single-payer system. CBO subsequently testified on these issues at a House hearing on May 22^nd.
• On May 24, Tennessee Governor Bill Lee signed legislation that requires the state to seek federal (CMS) approval to radically restructure TennCare, the state Medicaid program. The legislation aims to transform TennCare into a block grant program with capped federal funding. Doctors, hospitals, and patient advocates warn that this change would reduce Tennessee’s ability to respond to economic downturns, demographic changes, disease outbreaks, etc. – and could require the state to cut or cap TennCare enrollment, benefits, and/or payment rates. It is also far from clear that CMS has legal authority under the Medicaid statute to change the federal funding formula in this way, absent enabling legislation from Congress. In early May, HFA joined with 11 other national patient organizations asking Governor Lee to reject the block grant proposal.