Formulary guidance and transparency from P&T to point of care

Perspectives on New MA Rule That Touches Protected Classes

Posted by Lauren Flynn Kelly on Jan 24, 2019


CMS on Nov. 26, 2018 issued a proposed rule making changes to the Medicare Advantage and Part D programs that would take effect in 2020. Key provisions in CMS’s latest drug pricing rule include a proposal to extend new flexibility to plan sponsors in the area of so-called six "protected" drug classes and the required implementation of a new electronic real-time benefit tool (RTBT), AIS Health reported.

Under CMS's Contract Year 2020 Medicare Advantage and Part D Drug Pricing Proposed Rule, plans would be able to:

  • Implement broader use of prior authorization and step therapy for protected class drugs;
  • Exclude a protected class drug from a formulary if the drug represents only a new formulation of an existing single-source drug or biological product, regardless of whether the older formulation remains on the market; and
  • Exclude a protected class drug from a formulary if the price of the drug increased beyond a certain threshold over a specified look-back period.
Michael Strazzella at Buchanan, Ingersoll & Rooney PC., says, "I think being able to exclude [certain] protected class drugs from the formulary is going to be very significant for plans….And it is going to force the pharmaceutical companies to work more within the formulary managed care communication."

CMS in the proposed rule extended the opportunity given to plans for 2019 to implement appropriate utilization management tools for managing Part B drugs. The new rule included a proposal to modify Part D adjudication time periods for organization determinations and appeals involving Part B drugs to make sure that enrollees maintain access to all medically necessary Part B covered therapies.

According to Heidi Harmon at Gorman Health Group, "This Part B and Part D comingling will be easier for MA-PD [Medicare Advantage prescription drug] plans that already have a Pharmacy & Therapeutics Committee in place. MA-only plans will now need to develop and utilize a P&T Committee."

The recent rule also proposed a new requirement that each plan adopt an RTBT by Jan. 1, 2020. This tool would allow prescribers to have a "complete view of the beneficiary's prescription benefit information." Plans are encouraged to "promote full drug cost transparency by showing each drug’s full negotiated price."

"I think it's going to be very interesting if they decide to try and forward with the tool," says Strazzella. "Information doesn't hurt decisions, but whether it gets utilized or not is unclear to me. And if medical decisions are going to be totally based on pricing, that’s a dangerous way to go." And it would require "constant monitoring" and additional education to providers, which could be challenging, he adds.

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Topics: Industry Trends, Provider, Payer